EXHIBIT 10.31
[FORM OF WARRANT CERTIFICATE]
PPN: [ ]
WARRANT CERTIFICATE
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES 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 SECURITIES ACT AS WELL AS ANY
APPLICABLE STATE SECURITIES LAWS
DATED DECEMBER 30, 2004
TERREMARK WORLDWIDE, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
WARRANT CERTIFICATE
To Purchase Shares of Common Stock of
[ ]
No. [ ] [ ] Warrants
THIS CERTIFIES THAT, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, [INSERT NAME AND ADDRESS OF WARRANT
HOLDER] or its registered assigns (the "Holder"), is the registered owner of the
number of warrants specified above (collectively, the "Warrants"), each of which
warrants entitles the holder, subject to the adjustment provisions and the
conditions and limitations hereinafter set forth, to purchase from TERREMARK
WORLDWIDE, INC. (together with its successor and assignee, the "Company"), a
corporation organized and existing under the laws of the State of Delaware, one
(1) share, as adjusted pursuant to Section 4 hereof, of the Company's Common
Stock at a
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purchase price of $[ ] per share, as adjusted pursuant to Section 4 hereof, (the
"Exercise Price"). The Warrants shall not be terminable by the Company prior to
the Expiration Date (as defined in Section 10 hereof). The shares of Common
Stock issuable upon exercise of the Warrants (and any other or additional
shares, securities or property that may hereafter be issuable upon exercise of
the Warrants) are sometimes referred to herein as the "Warrant Shares," and the
maximum number of shares so issuable under this Warrant Certificate is sometimes
referred to as the "Aggregate Number" (as such number may be increased or
decreased, as more fully set forth herein).
The Warrants shall be void and all rights represented hereby
shall cease after 5:00 p.m. Eastern Time on the Expiration Date.
The Warrants are part of an authorized issue of warrants (the
"Authorized Warrants") initially exercisable for an aggregate of 15,000,000
shares of Common Stock issued on the date hereof pursuant to the terms of the
Purchase Agreement.
Certain terms used in this Warrant Certificate are defined in
Section 10 hereof.
The Warrants are subject to the following provisions, terms
and conditions:
1. EXERCISE; ISSUE OF CERTIFICATES; PAYMENT FOR SHARES. (a)
The Warrants represented by this Warrant Certificate may be exercised by the
Holder, in whole or in part (but not as to fractional shares of Common Stock),
to purchase the Aggregate Number of shares (initially equal to [ ] shares) of
Common Stock at all times on or prior to 5:00 p.m. Eastern Time on the
Expiration Date hereof.
(b) The Warrants shall be exercisable in whole at any time or
in part from time to time by surrendering this Warrant Certificate on any
Business Day (with the Exercise Form annexed hereto as SCHEDULE 1 properly
completed and executed) to the Company at its principal office specified in
Section 15, or its then current address, and upon payment to the Company of the
Exercise Price for the Warrant Shares being purchased.
(c) Payment of the aggregate Exercise Price with respect to an
exercise in whole or in part of any Warrants may be made, in the sole discretion
of the Holder, in the form of any of the following: (a) by cash or a check or
bank draft in New York Clearing House funds, (b) by the surrender of the
applicable Warrant or Warrants, and without the payment of the Exercise Price in
cash, for such number of Warrant Shares equal to the product of (1) the number
of Warrant Shares for which such Warrant or Warrants are exercisable with
payment in cash of the Exercise Price as of the date of exercise and (2) the
Cashless Exercise Ratio, (c) by tendering Notes having an aggregate principal
amount, plus accrued and unpaid interest, if any, thereon to the date of
exercise, equal to the Exercise Price or (d) by any combination of (a), (b) and
(c) above. Such certificate or certificates shall be deemed to have been issued
and any Person so designated to be named therein shall be deemed for all
purposes to have become a holder of
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record of such Warrant Shares as of the close of business on the Business Day of
the surrender of this Warrant Certificate and payment of the Exercise Price as
aforesaid.
(d) Certificates for the shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding five (5)
Business Days, after this Warrant Certificate shall have been so exercised, and
unless the Warrants represented by this Warrant Certificate have expired or been
fully exercised, a new Warrant Certificate representing the number of shares
with respect to which this Warrant Certificate shall not then have been
exercised shall also be delivered to the Holder within such time.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES; LISTING.
The Company covenants and agrees that: (a) all Warrant Shares will, upon
issuance, be original-issue shares (and not treasury stock) fully paid and
nonassessable and free from all taxes, claims, liens, charges and other
encumbrances with respect to the issue thereof; (b) without limiting the
generality of the foregoing, it will from time to time take all such action as
may be required to assure that the par value per share of Common Stock shall at
all times be less than or equal to the Exercise Price; (c) during the period
within which the Warrants represented by this Warrant Certificate may be
exercised, the Company will at all times have authorized and reserved for the
purpose of issue or transfer upon exercise of the Warrants represented by this
Warrant Certificate a sufficient number of original-issue shares of its Common
Stock to provide for the exercise of all the Warrants represented by this
Warrant Certificate; and (d) upon the exercise of the Warrants represented by
this Warrant Certificate, it will, at its expense, promptly notify each
securities exchange on which any Common Stock is at the time listed of such
issuance, and use its best efforts to maintain a listing of all shares of Common
Stock from time to time issuable upon the exercise of the Warrants represented
by this Warrant Certificate to the extent such shares can be listed.
3. REGISTRATION RIGHTS AGREEMENT. The Holder shall be entitled
to all of the benefits, and subject to all of the obligations, of the
Registration Rights Agreement, in connection with the Warrants and the Warrant
Shares, if issued.
4. ADJUSTMENTS TO EXERCISE PRICE AND AGGREGATE NUMBER. The
Exercise Price and the Aggregate Number of shares of Common Stock issuable upon
the exercise of each Warrant (the "Exercise Rate") is subject to adjustment from
time to time upon the occurrence of the events enumerated in this Section 4.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(1) pays a dividend or makes any other distribution on its
Common Stock in shares of its Common Stock or in other capital stock of
the Company; or
(2) subdivides, combines or reclassifies its outstanding
shares of Common Stock,
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then, in each case, the Exercise Rate and the Exercise Price in effect
immediately prior to such action shall be proportionately adjusted so that the
Holder may upon payment of the same aggregate Exercise Price payable immediately
prior to such action receive the Aggregate Number and kind of shares of capital
stock of the Company which the Holder would have owned immediately following
such action if such Warrants had been exercised immediately prior to such
action.
Any such adjustment shall become effective immediately after
the record date of such dividend or distribution or the effective date of such
subdivision, combination or reclassification.
If after an adjustment the Holder upon exercise of any
Warrants may receive shares of two or more classes of capital stock of the
Company, the board of directors of the Company shall determine the allocation of
the adjusted Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall thereafter be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section 4.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) ADJUSTMENT FOR CERTAIN ISSUANCES OF COMMON STOCK. If the
Company issues or sells to any Person shares of its Common Stock or distributes
any rights, options or warrants entitling any Person to purchase shares of
Common Stock, or any rights, warrants or options or other securities convertible
into or exchangeable for Common Stock, in each case, at a price per share less
than the Current Market Value on the record date for determining entitlements to
participate in such issuance, sale or distribution (the "Time of
Determination"), the Exercise Rate shall be adjusted in accordance with the
formula:
E' = E x O + N
----------
O + N x P
-----
M
and the Exercise Price shall be adjusted in accordance with the following
formula:
EP' = EP x E
--
E'
where:
E' = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of
Determination for any such issuance, sale or
distribution.
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EP' = the Adjusted Exercise Price.
EP = the Exercise Price immediately prior to the Time
of Determination for any such issuance, sale or
distribution.
O = the number of Fully Diluted Shares (as defined
below) outstanding immediately prior to the Time of
Determination for any such issuance, sale or
distribution.
N = the number of additional shares of Common Stock
issued, sold or issuable upon exercise of such
rights, options or warrants or other convertible or
exchangeable securities.
P = the per share price received and receivable by the
Company in the case of any issuance or sale of
Common Stock or rights, options or warrants or other
convertible or exchangeable securities inclusive of
the exercise price per share of Common Stock payable
upon exercise of such rights, options or warrants or
other convertible or exchangeable securities.
M = the Current Market Value per share of Common Stock
on the Time of Determination for any such issuance,
sale or distribution.
For purposes of this Section 4 the term "Fully Diluted Shares"
shall mean (i) the shares of Common Stock outstanding as of a specified date,
and (ii) the shares of Common Stock into or for which rights, options, warrants
or other convertible or exchangeable securities outstanding as of such date are
exercisable, convertible or exchangeable (other than the Warrants or any of the
other Authorized Warrants).
The adjustments shall be made successively whenever any such
rights, options or warrants or other convertible or exchangeable securities are
issued and shall become effective immediately after the relevant Time of
Determination. Notwithstanding the foregoing, the Exercise Rate and the Exercise
Price shall not be subject to adjustment in connection with (i) the issuance of
any shares of Common Stock upon exercise of any such rights, options or warrants
or other convertible or exchangeable securities which have previously been the
subject of an adjustment under this Agreement for which the required adjustment
has been made; (ii) Common Stock Equivalents or Shares of Common Stock issued
upon exercise of any Common Stock Equivalents issued to employees, officers or
directors of, or consultants or advisors to the Company or any of its
subsidiaries, pursuant to stock purchase or stock option plans or other
arrangements that are approved by the board of directors of the Company for the
purpose of compensation or similar payment in connection with employment or
services rendered to the Company or its Subsidiaries; (iii) Shares of Common
Stock issued upon exercise of any Common Stock Equivalents outstanding on the
date hereof; and (iv) any exercise of the Warrants or any of the other
Authorized Warrants. If at the end of the period during which any such rights,
options or warrants or other convertible or exchangeable securities are
exercisable, not all
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rights, options or warrants or other convertible or exchangeable securities
shall have been exercised, the Warrants shall be immediately readjusted to what
it would have been if "N" in each of the above formulas had been the number of
shares actually issued.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS. If the Company
distributes to holders of its Common Stock (i) any evidences of indebtedness of
the Company or any of its subsidiaries, (ii) any assets of the Company or any of
its subsidiaries (whether in cash, property or otherwise), or (iii) any rights,
options or warrants to acquire any of the foregoing or to acquire any other
securities of the Company, the Exercise Rate shall be adjusted in accordance
with the formula:
E' = E x M
-----
M - F
and the Exercise Price shall be decreased (but not increased) in accordance with
the following formula:
EP' = EP x E
-
E'
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate on the record date referred
to in this paragraph (c) below.
EP' = the Adjusted Exercise Price.
EP = the current Exercise Price on the record date
referred to in this paragraph (c) below.
M = the Current Market Value per share of Common Stock
on the record date referred to in this paragraph (c)
below.
F = the fair market value (as determined in good faith
by the Company's board of directors) on the record
date referred to in this paragraph (c) below of the
indebtedness, assets, rights, options or warrants
distributable in respect of one share of Common
Stock.
The adjustments shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If any adjustment is made pursuant to clause (iii) above of this subsection (c)
as a result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable,
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not all such rights, options or warrants shall have been exercised, the Warrants
shall be immediately readjusted as if "F" in the above formula was the fair
market value on the record date of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by the
number of shares of Common Stock outstanding on the record date. Notwithstanding
anything to the contrary contained in this subsection (c), if "M-F" in the above
formula is less than $1.00 (or is a negative number) then in lieu of the
adjustment otherwise required by this subsection (c), the Company may elect to
distribute to the Holder, upon exercise of any Warrants, the evidences of
indebtedness, assets, rights, options or warrants which would have been
distributed to such Holder had such Warrants been exercised immediately prior to
the record date for such distribution.
This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 4.
(d) The following provisions shall be applicable to the making
of adjustments of the Exercise Price and Exercise Rate herein before provided
for in this Section 4:
(i) The sale or other disposition of any issued shares of
Common Stock owned or held by or for the account of the Company shall
be deemed an issuance thereof for the purposes of this Section 4.
(ii) The adjustments required by the preceding paragraphs of
this Section 4 shall be made whenever and as often as any specified
event requiring an adjustment shall occur, except as expressly provided
herein. For the purpose of any adjustment, any specified event shall be
deemed to have occurred at the close of business on the date of its
occurrence.
(iii) In computing adjustments under this Section 4 fractional
interests in Common Stock shall be taken into account to the nearest
one-thousandth (.001) of a share and shall be aggregated until they
equal one whole share.
(iv) If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive any item
described in Sections 4(a) through 4(c) hereof, but abandon its plan to
pay or deliver such item, then no adjustment shall be required by
reason of the taking of such record and any such adjustment previously
made in respect thereof shall be rescinded and annulled.
(v) The consideration for any additional shares of Common
Stock issuable pursuant to any options, warrants or other rights to
subscribe for or purchase the same shall be the consideration received
or receivable by the Company for issuing such options, warrants or
other rights, plus the additional consideration payable to the Company
upon the exercise of such options, warrants or other rights. The
consideration for any additional shares of Common Stock issuable
pursuant to the terms of any convertible or exchangeable securities
shall be the consideration received or receivable by the Company for
issuing any options, warrants or other rights to subscribe for or
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purchase such convertible or exchangeable securities, plus the
consideration paid or payable to the Company in respect of the
subscription for or purchase of such convertible or exchangeable
securities, plus the additional consideration, if any, payable to the
Company upon the exercise of the right of conversion, exercise or
exchange of such convertible or exchangeable securities. In case of the
issuance at any time of any additional shares of Common Stock or
convertible or exchangeable securities in payment or satisfaction of
any dividend upon any class of stock other than Common Stock, the
Company shall be deemed to have received for such additional shares of
Common Stock or convertible or exchangeable securities a consideration
equal to the amount of such dividend so paid or satisfied.
(e) (i) If any event occurs as to which the other provisions
of this Section 4 are not strictly applicable but the lack of any provision for
the exercise of the rights of the Holder would not fairly protect the purchase
rights of such Holder in accordance with the essential intent and principles of
such provisions, or, if strictly applicable, would not fairly protect the
conversion rights of such Holder in accordance with the essential intent and
principles of such provisions, then the Company shall appoint a firm of
independent certified public accountants in the United States (which may be the
regular auditors of the Company) of recognized national standing in the United
States reasonably satisfactory to the Required Holders, which shall give their
opinion as to the adjustments, if any, necessary to preserve, without dilution,
on a basis consistent with the essential intent and principles established in
the other provisions of this Section 4, the exercise rights of such Holder. Upon
receipt of such opinion, the Company shall forthwith make the adjustments
described therein.
(ii) In case of any capital reorganization, other than in the
cases referred to in Section 4(a), (b) or (c) hereof and other than any capital
reorganization that does not result in any reclassification of the outstanding
shares of Common Stock into shares of other stock or other securities or
property, or the consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock into shares of other stock or other
securities or property), or the sale of all or substantially all of the assets
of the Company (collectively such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of any
Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock that would otherwise have
been deliverable upon the exercise of such Warrant would have been entitled upon
such Reorganization if such Warrant had been exercised in full immediately prior
to such Reorganization. In case of any Reorganization, appropriate adjustment,
as determined in good faith by the board of directors of the Company, whose
determination shall be described in a duly adopted resolution certified by the
Company's Secretary or Assistant Secretary, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of the
Holder so that the provisions set forth herein shall
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thereafter be applicable, as nearly as possible, in relation to any such shares
or other securities or property thereafter deliverable upon exercise of
Warrants.
The Company shall not effect any such Reorganization unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such Reorganization or
the corporation or other entity purchasing such assets shall (i) expressly
assume, by a supplemental warrant or other acknowledgment executed and delivered
to the Holder the obligation to deliver to the Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase, and the due and punctual performance and
observance of each and every covenant, condition, obligation and liability under
this Warrant Certificate to be performed and observed by the Company in the
manner prescribed herein and (ii) if such Reorganization takes place prior to
consummation by the Company of all of its registration obligations under the
Stockholders Agreement, enter into an agreement providing to the Holder rights
and benefits substantially similar to those enjoyed by the Holder hereof under
the Stockholders Agreement.
The foregoing provisions of this Section 4(e)(ii) shall apply
to successive Reorganization transactions.
(f) (i) In case:
(A) the Company shall authorize the issuance to holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(B) the Company shall authorize the distribution to holders of
shares of Common Stock of evidences of its indebtedness or assets or of
rights, options or warrants to subscribe for or purchase any of the
foregoing; or
(C) of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the sale of all or substantially all of the assets of
the Company, or of any reclassification or change of Common Stock
issuable upon exercise of the Warrants, or a tender offer or exchange
offer for shares of Common Stock; or
(D) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(E) the Company proposes to take any action that would require
an adjustment to the Exercise Rate or Exercise Price pursuant to this
Section 4;
then the Company shall give prompt written notice to the Holder at least fifteen
(15) days prior to the applicable record date hereinafter specified, or the date
of the event in the case of events for which there is no record date, by
first-class mail, postage prepaid, a written notice stating (i)
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the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such shares, rights, options, warrants or distribution
are to be determined, or (ii) the initial expiration date set forth in any
tender offer or exchange offer for shares of Common Stock, or (iii) the date on
which any such consolidation, merger, sale, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up. The failure by the Company to give such notice or any
defect therein shall not affect the legality or validity of any distribution,
right, option, warrant, consolidation, merger, conveyance, dissolution,
liquidation or winding up, or the vote upon any action.
(ii) Within five (5) days after the occurrence of an event
resulting in an adjustment pursuant to this Section 4, the Company shall cause
to be promptly mailed to the Holder (and upon the exercise hereof, to the
exercising Holder) by first-class mail, postage prepaid, notice of each
adjustment or adjustments to the Exercise Price and Exercise Rate effected since
the date of the last such notice and a certificate of the Company's Chief
Financial Officer or Chief Accounting Officer, setting forth the Exercise Price
and Exercise Rate after such adjustment(s), a brief statement of the facts
requiring such adjustment(s) and the computation by which such adjustment(s) was
made.
(g) The occurrence of a single event shall not trigger an
adjustment of the Exercise Price and Exercise Rate under more than one paragraph
of this Section 4.
5. TAXES ON CONVERSION. The issuance of certificates for
Warrant Shares upon the exercise of the Warrants shall be made without charge to
the Holder exercising the Warrants for any issue or stamp tax in respect of the
issuance of such certificates, and such certificates shall be issued in the
respective names of, or in such names as may be directed by, the Holder;
PROVIDED, HOWEVER, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate 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 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 reasonable satisfaction
of the Company that such tax has been paid.
6. LIMITATION OF LIABILITY. No provision hereof in the absence
of the exercise of the Warrants by the Holder and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability on the part
of the Holder for the Exercise Price of the Warrant Shares or as a stockholder
of the Company, whether such liability is asserted by the Company or by any
creditor of the Company. Upon exercise of Warrants the Holder will have the
right to vote the Common Stock received upon such exercise. No Holder shall be
entitled to vote or be deemed the holder of Common Stock (or any other
securities as may be issuable upon the exercise of the Warrants) nor shall
anything contained herein be construed to confer upon the Holder the rights of a
stockholder of
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the Company or the right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or give or withhold
consent to any corporate action or to receive notice of meetings or other
actions affecting stockholders or to receive dividends, distributions or
subscription rights or otherwise (except as provided herein), until the Warrants
shall have been exercised in accordance with the terms and conditions of the
Warrants.
7. CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of the Warrants or any Warrant Shares that
have been issued or are issuable upon the exercise of the Warrants in any manner
that interferes with the timely exercise hereof. The Company shall deem and
treat the Holder as the absolute owner thereof for all purposes, including
without limitation for the purpose of exercise thereof. The Company agrees that,
upon exercise of the Warrants in accordance with the terms hereof (including
receipt by the Company of payment of the aggregate Exercise Price), the shares
so purchased shall be deemed to be issued to such holder as the record owner of
such shares as of the close of business on the date on which the Warrants shall
have been exercised and the Holder shall be deemed for all purposes a
stockholder of the Company with respect to such shares as though the certificate
for such shares had been issued on the date of such exercise.
8. RESTRICTIONS ON TRANSFER.
A. RESTRICTIVE LEGENDS. Each certificate for any Warrant
Shares issued upon the exercise of the Warrants, and each stock certificate
issued upon the transfer of any such Warrant Shares (except as otherwise
permitted by this Section 8) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS
BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR
(ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES 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 SECURITIES ACT AS WELL AS ANY
APPLICABLE STATE SECURITIES LAWS.
Each Warrant Certificate issued in substitution for any
Warrant Certificate pursuant to Section 11, 12 or 13 hereof and each Warrant
Certificate issued upon the transfer of any Warrant (except as otherwise
permitted by this Section 8) shall be stamped or otherwise imprinted with a
legend in substantially the following form:
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS
BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR
(ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES 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 SECURITIES ACT AS WELL AS ANY
APPLICABLE STATE SECURITIES LAWS.
B. TERMINATION OF RESTRICTIONS. The restrictions imposed by
this Section 8 upon the transferability of Warrants and Warrant Shares shall
apply as to the Warrants and any Warrant Shares until (a) such securities shall
have been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering such securities, or (b) such
time as, in the reasonable opinion of counsel for the Company, or upon the
written opinion of counsel for the Holder thereof reasonably acceptable to the
Company, such restrictions are not required in order to comply with the
Securities Act. Whenever such restrictions shall terminate as to any Warrants or
Warrant Shares, the Holder shall be entitled to receive from the Company,
without expense, new certificates of like tenor not bearing the restrictive
legends set forth in Section 8.A.
9. PREEMPTIVE RIGHTS. In the event that the Company seeks to
sell newly issued Common Stock Equivalents ("New Issuance Securities"), each
holder of Warrants shall be entitled to acquire, at the proposed offering price
of such New Issuance Securities, that number of New Issuance Securities equal to
the aggregate number of New Issuance Securities proposed to be so offered
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock into which the Warrants held by such holder shall yield upon
exercise if such Warrants were exercised on the issue date of such New Issuance
Securities and the denominator of which shall be the aggregate number of Fully
Diluted Shares of Common Stock issued and outstanding of the Company on the
issue date of such New Issuance Securities. In connection with any proposed
issuance of such New Issuance Securities, the Company shall give to each holder
of Warrants the same information about the Company, its business and such
issuance and the same notice of its intention to effect such issuance (but in no
event less than 10 Business Days notice) as given to the other prospective
purchasers in such transaction specifying in such notice the number of New
Issuance Securities to be sold, and the proposed offering price per New Issuance
Securities. Each holder shall have the right, exercisable concurrently with
purchases by other purchasers, to elect to purchase up to the maximum number of
New Issuance Securities to which such holder is entitled to acquire hereunder
with such purchase being effected by such holder's payment to the Company by
wire transfer of immediately available
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funds, an amount equal to the number of New Issuance Securities to be purchased
by such holder, multiplied by the offering price per New Issuance Security
against delivery of certificates evidencing the number of New Issuance
Securities so acquired, which will be issued in the name of such holder. To the
extent any New Issuance Securities proposed to be sold shall not have been
subscribed to by an existing holder, the Company shall be free thereafter to
sell such New Issuance Securities by way of a private placement, or similar
offering, at an offering price per New Issuance Security not less than that set
forth in the notice to the holders. The preemptive rights established by this
Section 9 shall have no application to any of the following New Issuance
Securities: (i) Common Stock Equivalents or Shares of Common Stock issued upon
exercise of any Common Stock Equivalents issued to employees, officers or
directors of, or consultants or advisors to the Company or any of its
subsidiaries, pursuant to stock purchase or stock option plans or other
arrangements that are approved by the board of directors of the Company for the
purpose of compensation or similar payment in connection with employment or
services rendered to the Company or its Subsidiaries; (ii) Shares of Common
Stock issued upon exercise of any Common Stock Equivalents outstanding on the
date hereof; (iii) any New Issuance Securities issued for consideration other
than cash pursuant to a merger, consolidation, acquisition or similar business
combination approved by the board of directors of the Company; (iv) Common Stock
or Common Stock Equivalents issued in connection with any stock split, stock
dividend or recapitalization by the Company; (v) any New Issuance Securities
that are issued by the Company pursuant to an underwritten public offering and
(vi) any New Issuance Securities sold to any Person who is a vendor of the
Company other than for money or for any purpose other than raising capital for
the Company or its Subsidiaries.
10. DEFINITIONS. As used in this Warrant Certificate, unless
the context otherwise requires, the following terms have the following
respective meanings:
AFFILIATE: shall mean with respect to any specified Person:
(i) any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified
Person; (ii) any other Person that owns, directly or indirectly, 5% or
more of such specified Person's capital stock or any officer or
director of any such specified Person or other Person or, with respect
to any natural Person, any person having a relationship with such
Person by blood, marriage or adoption no more remote than first cousin;
or (iii) any other Person 5% or more of the voting stock of which is
beneficially owned or held directly or indirectly by such specified
Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to
the foregoing.
AGGREGATE NUMBER: shall have the meaning as set forth in the
first paragraph of this Warrant Certificate.
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AUTHORIZED WARRANT SHARES: shall mean the Warrant Shares and
all shares of Common Stock (and any other or additional shares,
securities or property issued upon exercise of any other Authorized
Warrants) issued upon exercise of any other Authorized Warrants.
AUTHORIZED WARRANTS: shall have the meaning as set forth in
the second paragraph of this Warrant Certificate.
BUSINESS DAY: shall mean any day other than a Legal Holiday.
CAPITAL STOCK: shall mean, (i) with respect to any Person that
is a corporation, any and all shares, interests, participations or
other equivalents (however designated and whether or not voting) of
corporate stock, including each class of common stock and preferred
stock of such Person; (ii) with respect to any Person that is not a
corporation, any and all partnership, membership or other equity
interests of such Person; and (iii) any rights, warrants or options
exchangeable for or convertible into any of the foregoing.
CASHLESS EXERCISE RATIO: shall mean an amount equal a
fraction, the numerator of which is the excess of the Current Market
Value of one share of Common Stock on the date of exercise over the
Exercise Price per share as of the date of exercise and the denominator
of which is the Current Market Value of one share of Common Stock on
the date of exercise.
CLOSING BID PRICE: shall mean for any Security on each trading
day (A) if such Security is listed or admitted to trading on any
securities exchange, the closing price, regular way, on such day on the
principal exchange on which such Security is traded, or if no sale
takes place on such day, the average of the closing bid and asked
prices on such day, (B) if such Security is not then listed or admitted
to trading on any securities exchange, the last reported sale price on
such day, or if there is no such last reported sale price on such day,
the average of the closing bid and the asked prices on such day, as
reported by a reputable quotation source designated by the Company or
(C) if neither clause (A) nor (B) is applicable, the average of the
reported high bid and low asked prices on such day, as reported by a
reputable quotation service, or a newspaper of general circulation in
the Borough of Manhattan, City of New York, customarily published on
each trading day designated by the Company. If there are no such prices
on a trading day, then the market price shall not be determinable for
such trading day.
COMMISSION: shall mean the United States Securities and
Exchange Commission and any other similar or successor agency of the
United States federal government administering the Securities Act or
the Exchange Act.
COMMON STOCK: shall mean the shares of Common Stock, par value
$.001 per share, of the Company, currently provided for in the
Certificate of Incorporation of the Company, and including, for all
purposes hereunder, any other capital stock of the
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Company into which such shares of 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 like events.
COMMON STOCK EQUIVALENTS: shall mean (a) an outstanding share
of Common Stock, which shall be deemed to equal one Common Stock
Equivalent, (b) an outstanding security that is, at the time in
question, convertible by its terms into Common Stock, with such
security to be deemed to equal to number of Common Stock Equivalents
that equal the amount of shares of Common Stock into which it is then
so convertible, (c) an outstanding option, warrant or right to acquire
Common Stock that is, at the time in question, exercisable by its terms
for Common Stock, with such option, warrant or right to be deemed to be
equal to the number of Common Stock Equivalents that equals the number
of shares of common stock for which it is then so exercisable and (d)
an outstanding option, warrant or right that is, at the time in
question, exercisable by its terms for a security that, at the time in
question, is convertible by its terms in to Common Stock, with such
option, warrant or right to be deemed to be equal to the number of
Common Stock Equivalents that equals the number of shares of Common
Stock for which the convertible securities for which they are then
exercisable would then be convertible.
COMPANY: shall have the meaning as set forth in the first
paragraph of this Warrant Certificate.
CURRENT MARKET VALUE: per share of Common Stock or of any
other security (herein collectively referred to as a "Security") at any
date shall be:
(1) if the Security is not registered under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the value of the Security determined by an Independent
Financial Expert, or
(2) if the Security is registered under the Exchange
Act, the average of the daily closing bid prices of such
Security for the 20 consecutive trading days preceding such
date, but only if such Security shall have been listed on a
national securities exchange or the Nasdaq National Market or
traded through an automated quotation system during such
entire 20 trading day period. If such Security shall have not
been so listed or traded for such entire 20 trading day
period, the Current Market Value of such Security shall be
determined as if the Security was not registered under the
Exchange Act.
EXERCISE PRICE: shall have the meaning as set forth in the
first paragraph of this Warrant Certificate.
EXERCISE RATE: shall have the meaning as set forth in Section
4(a).
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EXCHANGE ACT: shall mean the Securities Exchange Act of 1934,
as amended.
EXPIRATION DATE: shall mean December 30, 2011.
FULLY DILUTED SHARES: shall have the meaning as set forth in
Section 4(b).
HOLDER: shall have the meaning as set forth in the first
paragraph of this Warrant Certificate.
INDEPENDENT: shall mean any Person who (i) is in fact
independent, (ii) does not have any direct financial interest or any
material indirect financial interest in the Company or any of its
subsidiaries, or in any Affiliate of the Company or any of its
subsidiaries (other than as a result of holding securities of the
Company in trading accounts) and (iii) is not an officer, employee,
promoter, trustee, partner, director or Person performing similar
functions for the Company or any of its subsidiaries or any Affiliate
of the Company or any of its subsidiaries.
INDEPENDENT FINANCIAL EXPERT: shall mean a reputable
accounting, appraisal or investment banking firm that is, in the
reasonable judgment of the board of directors of the Company, qualified
to perform the task for which such firm has been engaged hereunder, is
nationally recognized and disinterested and Independent with respect to
the Company and its Affiliates and is reasonably acceptable to the
Required Holders.
NEW ISSUANCE SECURITIES: shall have the meaning as set forth
in Section 9.
NOTES: shall mean the Senior Secured Notes of the Company
issued pursuant to the Purchase Agreement.
PERSON: shall mean any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency
or political subdivision thereof.
PURCHASE AGREEMENT: shall mean the Purchase Agreement dated
December 30, 2004 among the Company and purchasers named therein
pursuant to which the Notes and Authorized Warrants were issued.
REGISTRATION RIGHTS AGREEMENT: shall mean the Registration
Rights Agreement dated as of December 30, 2004 among the Company and
purchasers named therein.
REORGANIZATION: shall have the meaning as set forth in Section
4(e).
REQUIRED HOLDERS: shall mean any registered holder or holders
holding more than 50% of the outstanding Authorized Warrants (including
the Warrants) and Authorized Warrant Shares.
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SECURITIES ACT: shall mean the Securities Act of 1933, as
amended.
TIME OF DETERMINATION: shall have the meaning as set forth in
Section 4(b).
WARRANTS: shall have the meaning as set forth in the first
paragraph of this Warrant Certificate.
WARRANT SHARES: shall have the meaning as set forth in the
first paragraph of this Warrant Certificate.
11. WARRANTS TRANSFERABLE. This Warrant Certificate is issued
as a Warrant Certificate for which there is a register maintained by the
Company. Subject to the provisions of Section 8, the transfer of the Warrants
represented by this Warrant Certificate and all rights hereunder, in whole or in
part, is registerable at the office or agency of the Company referred to in
Section 1 hereof by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant Certificate with a properly completed Form of
Assignment in the form annexed hereto as SCHEDULE 2. The Holder, by taking or
holding the same, consents and agrees that this Warrant Certificate, when
endorsed in blank, shall be deemed negotiable, and that the holder hereof, when
this Warrant Certificate shall have been so endorsed, may be treated by the
Company and all other persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights of a "Holder" represented by this Warrant Certificate, or to the
registration of transfer hereof on the books of the Company; and until due
presentment for registration of transfer on such books, the Company may treat
the Holder thereof as the owner for all purposes, and the Company shall not be
affected by notice to the contrary. Any transfer tax relating to a transfer of
this Warrant Certificate shall be paid by the Holder who transfers such Warrant
Certificate.
12. WARRANT CERTIFICATES EXCHANGEABLE FOR DIFFERENT
DENOMINATIONS. Subject to the provisions of Section 8, this Warrant Certificate
is exchangeable, upon the surrender hereof by the Holder hereof at such office
or agency of the Company, for new Warrant Certificates of like tenor
representing in the aggregate the number of Warrants represented hereby, each of
such new Warrant Certificates to represent the number of Warrants as shall be
designated by said Holder at the time of such surrender.
13. REPLACEMENT OF WARRANT CERTIFICATES. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant Certificate and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity bond (or, in the case of the
original Holder hereof or any substantial financial institution to which any
Warrants represented by this Warrant Certificate may be transferred, an
unsecured indemnity agreement) reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant Certificate, the Company will execute and deliver, subject to
the provisions of Section 8, in lieu thereof, a new Warrant Certificate of like
tenor to the Holder of such Warrant, at such Holder's expense.
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14. CERTIFICATE RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF
WARRANTS. The rights and obligations of the Company contained in this Warrant
Certificate shall survive the exercise or repurchase of the Warrants represented
by this Warrant Certificate to the extent that such survival is necessary to
give effect to a provision hereof.
15. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered to the Holder of this Warrant
Certificate shall be in writing, and shall be delivered, or shall be sent by
first-class mail, postage prepaid and addressed, to such Holder at the address
shown on this Warrant Certificate, or at such other address as shall have been
furnished to the Company by notice from such Holder. All notices, requests and
other communications required or permitted to be given or delivered to the
Company shall be in writing, and shall be delivered, or shall be sent by
certified or registered mail, postage prepaid and addressed to the office of the
Company (return receipt requested) at 2601 S. Bayshore Drive, Miami, FL 33133,
Attention: Chief Financial Officer, with a copy to: Greenberg Traurig at 1221
Brickell Avenue, 21st Floor, Miami, FL 33133, Attention: Paul Berkowitz. Any
such notice, request or other communication may be sent by telegram or telex,
but shall in such case be subsequently confirmed by a writing delivered or sent
by certified or registered mail as provided above. All notices shall be deemed
to have been given either at the time of the delivery thereof to (or the receipt
by, in the case of a telegram or telex) any officer or employee of the person
entitled to receive such notice at the address of such person for purposes of
this Section 15, or, if mailed, at the completion of the third full day
following the time of such mailing thereof to such address, as the case may be.
16. AMENDMENTS. Neither this Warrant Certificate nor any term
or provision hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the Company and the Holder.
17. REMEDIES. The Holder may seek to enforce the terms of this
Warrant Certificate by seeking a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of the
terms hereof or otherwise. If any default under the terms of this Warrant
Certificate shall occur and be continuing, the Holder may proceed to protect and
enforce its rights under this Warrant Certificate by exercising such remedies as
are available to such Holder in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Warrant Certificate or in aid
of the exercise of any power granted in this Warrant Certificate. No remedy
conferred in this Warrant Certificate or the Purchase Agreement upon the Holder
is intended to be exclusive of any other remedy available to such Holder, and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law or in equity
or by statute or otherwise.
18. GOVERNING LAW. THIS WARRANT CERTIFICATE HAS BEEN EXECUTED
AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NEW YORK.
THIS WARRANT CERTIFICATE AND THE RIGHTS GRANTED HEREIN SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED UNDER THE
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LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW
RULES OR PRINCIPLES). ANY JUDICIAL PROCEEDING BROUGHT BY OR AGAINST THE COMPANY
WITH RESPECT TO THIS WARRANT CERTIFICATE OR ANY RELATED AGREEMENT SHALL BE
BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
WARRANT CERTIFICATE, THE COMPANY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS WARRANT. IF ANY ACTION IS COMMENCED IN ANY OTHER
JURISDICTION THE PARTIES HERETO HEREBY CONSENT TO THE REMOVAL OF SUCH ACTION TO
THE SOUTHERN DISTRICT OF NEW YORK. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE HOLDERS OF THIS WARRANT OR THE WARRANT SHARES TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS IN OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
19. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER OF THIS
WARRANT CERTIFICATE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS WARRANT CERTIFICATE
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS WARRANT
CERTIFICATE AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THE RELATIONSHIP THAT
IS BEING ESTABLISHED HEREUNDER. THE COMPANY AND THE HOLDER OF THIS WARRANT
CERTIFICATE ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTIES. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS WARRANT
CERTIFICATE, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND
THE HOLDER OF THIS WARRANT CERTIFICATE ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS WARRANT CERTIFICATE AND THAT EACH
WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
COMPANY AND THE HOLDER OF THIS WARRANT CERTIFICATE FURTHER WARRANT AND REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
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CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS WARRANT
CERTIFICATE OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS
CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS
A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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IN WITNESS HEREOF, the Company has caused this Warrant to be
signed on its behalf, in its corporate name, by its duly authorized officer, all
as of the day and year first above written.
TERREMARK WORLDWIDE, INC.
By:
-------------------------------------
Name:
Title:
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SCHEDULE 1
EXERCISE FORM
[TO BE EXECUTED ONLY UPON EXERCISE OF WARRANTS]
To: [ ]
The undersigned irrevocably exercises _______________ of the
Warrants for the purchase of one share (subject to adjustment) of Common Stock,
par value $.001 per share, of [ ] (the "Company") for each Warrant represented
by the within Warrant Certificate and herewith makes payment of $____ (such
payment being (a) in cash or by check or bank draft in New York Clearing House
funds payable to the order of the Company, (b) by the surrender of the
applicable Warrant or Warrants, and without the payment of the Exercise Price in
cash, for such number of Warrant Shares equal to the product of (1) the number
of Warrants Shares for which such Warrant or Warrants are exercisable with
payment in cash of the Exercise Price as of the date of exercise and (2) the
Cashless Exercise Ratio, (c) by tendering Notes having an aggregate principal
amount, plus accrued and unpaid interest, if any, thereon to the date of
exercise, equal to the Exercise Price or (d) by any combination of (a), (b) and
(c) above, all at the exercise price and on the terms and conditions specified
in the within Warrant Certificate, surrenders the within Warrant Certificate and
all right, title and interest therein (except as to any unexercised Warrants) to
the Company and directs that the Warrant Shares deliverable upon the exercise of
such Warrants be registered or placed in the name and at the address specified
below and delivered thereto.
Date: ____________________ ____________________________
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SCHEDULE 2
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the
within 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 the within Warrant Certificate
not being assigned hereby) all of the rights of the undersigned under the within
Warrant Certificate with respect to the number of Warrants set forth below:
Social Security or Other
Names of Identifying Number of Number of
Assignees Address Assignee(s) Warrants
--------- ------- ------------------------ --------
and does hereby irrevocably constitute and appoint ___________ the undersigned's
attorney to make such transfer on the books of [ ] maintained for that purpose,
with full power of substitution in the premises.
Dated: ___________________
________________________________1
(Signature of Owner)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (Zip Code)
- -----------------
1 The signature must correspond with the name as written upon the face of
the within Warrant Certificate in every particular, without alteration
or enlargement or any change whatever.