THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO THE SECURITIES OR "BLUE
SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED IN THE UNITED STATES, EXCEPT
PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH
IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT, OR (iii)
ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT, PROVIDED THAT, IF
REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM
AND SUBSTANCE IS FURNISHED TO THE COMPANY THAT AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.
Series C
Warrant No. 2 For the Purchase of 500,000
Shares of Common Stock
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
CONVERGENCE COMMUNICATIONS, INC.
(A Nevada corporation)
Convergence Communications, Inc., a Nevada corporation ("Company"),
hereby certifies that TCW/CCI Holding LLC ("Investor"), or its registered
assigns of this Warrant ("Registered Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company Five Hundred Thousand (500,000)
fully paid and nonassessable shares of common stock (subject to adjustment as
set forth in Section 5 below), $.001 par value ("Common Stock"), of the Company
at an exercise price determined as set out in Section 2 below, subject to
adjustment as set forth in Section 5 below. The shares of Common Stock issuable
upon exercise of this Warrant ("Warrant"), and the exercise price hereunder for
each of such shares, each as adjusted from time to time pursuant to the
provisions of this Warrant, are hereinafter referred to as the "Warrant Shares"
and the "Per Share Exercise Price", respectively.
The issue of this Warrant is one of a series of transactions
contemplated to occur under a certain Participation Agreement among the Company,
Investor, and certain other parties thereto and dated October 15, 1999
("Participation Agreement"). Capitalized terms used in this Warrant and not
otherwise defined herein shall have the meaning given them in the Participation
Agreement.
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in
whole or in part, at any time and from time to time during the
period from the date hereof through 5:00 p.m. New York time on
October 18, 2003 (the "Exercise Period"), provided that events
have occurred that permit the Per Share Exercise Price to be
determined as set out in Section 2, by surrendering this
Warrant, with the purchase form appended hereto as Exhibit A
duly executed by the Registered Holder, at the principal
office of the Company, or at such other office or agency as
the Company may designate, together with the purchase price
for such shares, which may be paid in cash, or in the manner
provided for in Section 3, provided, however, that if the Per
Share Exercise Price is determined as set out in Section 2(c),
then the Warrant shall be deemed to be exercised in its
entirety on the last day of the Exercise Period, and within 10
Business Days thereafter or, if later, within five Business
Days after the Company's demand therefor, the Registered
Holder shall surrender this Warrant, with the purchase form
appended hereto as Exhibit A duly executed by the Registered
Holder, at the principal office of the Company, or at such
other office or agency as the Company may designate, together
with the purchase price for such shares, which may be paid in
cash, or in the manner provided for in Section 3.
(b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day
on which the Warrant shall have been exercised as provided in
subsection 1(a) above. At such time, the Person or Persons in
whose name or names any certificates for Warrant Shares shall
be issuable upon such exercise as provided in subsection 1(c)
below, shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.
(c) As soon as practicable after the exercise of this Warrant in
whole or in part, and in any event within 20 calendar days
after the Per Share Exercise Price shall have been paid, the
Company at its expense will cause to be issued in the name of,
and delivered to, the Registered Holder, or, subject to the
terms and conditions hereof, as such Registered Holder (upon
payment by such Registered Holder of any applicable transfer
taxes) may direct:
(i) a certificate or certificates for the number of full
Warrant Shares to which such Registered Holder shall
be entitled upon such exercise plus, in lieu of any
fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount
determined pursuant to Section 6 hereof; and
(ii) in case such exercise is in part only, a new warrant
(dated the date hereof) of like tenor, calling in the
aggregate on the face thereof for a number of Warrant
Shares equal to the number of such shares called for
on the face of this Warrant, minus the number of such
shares previously issued pursuant to any exercise of
the Warrant.
Determination of Exercise Price. The Per Share Exercise Price shall be
determined as follows, in each case, subject to adjustment as set out
in Section 5:
(a) If a Realized Valuation Event occurs prior to the last day of
the Exercise Period then, if the value per share of the Common
Stock as evidenced by the Realized Valuation Event (without
taking into consideration the number of shares of Common Stock
issuable under this or the other Series C Warrants, but taking
into consideration the number of such shares issuable under
all other warrants, convertible securities and options then
outstanding) (the "Realized Value Before") is an amount that,
when discounted to the Going-In Value from the date of the
Realized Valuation Event to the Closing Date (based on a 365
day year), yields a return equal to the daily equivalent of
45% per annum or greater, then the Per Share Exercise Price
shall be equal to the Realized Value Before. Otherwise, the
Per Share Exercise Price shall be determined as provided in
Section 2(b).
(b) If the Realized Value Before is not sufficient to provide the
yield as set out in Section 2(a), then the Per Share Exercise
Price shall be a price less than the Realized Value Before,
which price (the "Lower Price") shall be determined such that:
(i) the sum of (A) the number of shares of Common Stock
into which all of the Series C Preferred Stock
acquired by the Investor at the Closing is
convertible multiplied by the value of the Common
Stock as evidenced by the Realized Valuation Event
(taking into consideration the number of shares of
Common Stock issuable under this and all other
warrants, convertible securities and options then
outstanding) (the "Realized Value After"), plus (B)
the number of Warrant Shares multiplied by the
difference between the Realized Value After and the
Lower Price,
(ii) when discounted from the date of the Realized
Valuation Event to the Closing Date (based on a 365
day year for the number of days elapsed) to an amount
equal to the aggregate purchase price of all the
Series C Preferred Stock acquired by the Investor at
the Closing,
yields a return equal to the daily equivalent of 45% per
annum, provided that the Lower Price shall not be greater than
the Realized Value After nor less than U.S. $0.01. An example
of such a calculation is set out as Schedule 1 to this
Warrant.
(c) If a Realized Valuation Event fails to occur prior to the last
day of the Exercise Period, then the Per Share Exercise Price
shall be U.S.$0.01.
Cashless Exercise.The Registered Holder may elect to pay the Per Share Exercise
Price (a) by surrender to the Company of shares of Common Stock which
have been held by the Registered Holder for at least six months, and
which have a fair value, on the date of exercise, equal to the Per
Share Exercise Price for the number of Warrants exercised, (b) by
surrender to the Company of shares of Series C Convertible Preferred
Stock with a Realized Value After, determined on an as converted basis,
equal to the Per Share Exercise Price for the number of Warrant Shares
exercised, (c) by surrender to the Company of this Warrant (as provided
in Section 4 below) or (d) by a combination of cash and/or any of the
securities described in clauses (b), (c) or (d) of this Section 3.
Conversion Rights. The Registered Holder shall have the right to convert Warrant
or any portion thereof (the "Conversion Right") into Warrant Shares as
provided in this Section, but only if this Warrant shall otherwise be
exercisable hereunder.
Upon exercise of the Conversion Right with respect to a particular
number of Warrant Shares (the "Converted Warrant Shares"), the Company
shall deliver to the Registered Holder (without payment by the
Registered Holder of any cash or other consideration) a number of
Warrant Shares determined as follows:
(a) a quotient is obtained by dividing
(i) the difference between (A) the Realized Value After
(but, if the Conversion Right is exercised after the
date on which the Realized Valuation Event occurs,
the higher of the Realized Value After and the fair
value of the Common Stock as of the date of exercise)
and (B) the Per Share Exercise Price, by
(ii) the Realized Value After (or, if the Conversion Right
is exercised after the date on which the Realized
Valuation Event occurs, the higher of the Realized
Value After and the fair value of the Common Stock),
and
(b) then the quotient is multiplied by the number of Converted Warrant
Shares.
Adjustments. The number and kind of securities issuable upon the exercise of
this Warrant and the Per Share Exercise Price shall be subject to
adjustment from time to time in accordance with the following
provisions.
(a) Certain Definitions. For purposes of this Warrant:
(i) The term "Additional Shares of Common Stock" shall
mean all shares of Common Stock issued, or deemed to
be issued by the Company pursuant to subsection (e)
of this Section 5, after the Subsequent Closing Date,
as that term is defined in the Participation
Agreement or, if no Subsequent Closing, as defined in
the Participation Agreement, takes place, the first
date of issuance of this Warrant (the "Original Issue
Date") except:
(A) issuances of Common Stock, convertible
Securities and/or Options to officers,
employees, consultants or directors;
provided that such issuances pursuant to
this clause (A) in the aggregate do not
exceed more than 10% of the shares of Common
Stock outstanding, as determined on a
fully-diluted basis (the "Management
Securities"); and
(B) issuances of Common Stock, Convertible
Securities, warrants and/or Options granted
or approved to be granted by the Board on or
prior to the Original Issue Date.
(ii) The term "Common Stock" shall mean (A) the Common
Stock and (B) the stock of the Company of any class,
or series within a class, whether now or hereafter
authorized, which has the right to participate in the
distribution of either earnings or assets of the
Company without limit as to the amount or percentage.
(iii) The term "Convertible Securities" shall mean any
evidence of indebtedness, shares or other securities
(other than the Series C Warrants, the
FundElec/Internexus Warrants and the Series C Shares)
convertible into or exercisable or exchangeable for
Common Stock.
(iv) The term "Options" shall mean any and all rights,
options or warrants (other than the Management
Securities, the Series C Warrants, the
FondElec/Internexus Warrants and the Series C Shares)
to subscribe for, purchase or otherwise in any manner
acquire Common Stock or Convertible Securities.
(b) Merger or Subdivision or Combination of Shares. In the event
of a merger or consolidation to which the Company is a party
prior to a given exercise of this Warrant, the securities
issuable upon the exercise of this Warrant shall, after such
merger or consolidation, be exercisable into such kind and
number of shares of stock and/or other securities, cash or
other property which the Registered Holder would have been
entitled to receive if the Registered Holder had exercised
this Warrant prior to such consolidation or merger. If
outstanding shares of Common Stock are subdivided, or a record
is taken of the holders of Common Stock for the purpose of so
subdividing, prior to a given exercise of this Warrant, the
Per Share Exercise Price applicable to the shares issuable
upon such exercise shall be reduced proportionately and the
number of shares issuable pursuant to this Warrant shall be
proportionately increased. If outstanding shares of Common
Stock are combined, or a record is taken of the holders of
Common Stock for the purpose of so combining, prior to a given
exercise of this Warrant, the Per Share Exercise Price
applicable to the shares issuable upon such exercise shall be
increased proportionately and the number of shares issuable
pursuant to this Warrant shall be proportionately decreased.
(c) Stock Dividends. If shares of Common Stock are issued as a
dividend or other distribution on the Common Stock (or such
dividend or distribution is declared or a record is taken of
the holders of Common Stock for the purpose of receiving such
dividend or distribution), prior to a given exercise of this
Warrant, the Per Share Exercise Price applicable to the
Warrant Shares issuable upon such exercise shall be adjusted
to an amount determined by multiplying the Per Share Exercise
Price otherwise applicable by a fraction (i) the numerator of
which shall be the number of shares of Common Stock
outstanding immediately prior to the declaration or payment of
such dividend or other distribution, and (ii) the denominator
of which shall be the total number of shares of Common Stock
outstanding immediately after the declaration or payment of
such dividend or other distribution and the number of Warrant
Shares issuable pursuant to this Warrant shall be adjusted to
a number determined by multiplying the number of Warrant
Shares by the inverse of that fraction. In the event that the
Company shall declare or pay any dividend on the Common Stock
payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a
dividend payable in Common Stock in an amount of shares equal
to the maximum number of shares issuable upon exercise of such
rights to acquire Common Stock.
(d) Issuance of Additional Shares of Common Stock. If the Company
issues any Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant
to subsection (e) below) prior to a given exercise of this
Warrant (other than as provided in the foregoing subsections
(b) and (c)), for no consideration or for a consideration per
share less than the Per Share Exercise Price otherwise
applicable to the shares issuable upon such exercise, the Per
Share Exercise Price shall be reduced to a price equal to the
price at which the Additional Shares of Common Stock were
issued.
(e) Deemed Issue of Additional Shares of Common Stock. If the
Company at any time or from time to time after the date hereof
issues any Convertible Securities or Options or fixes a record
date for the determination of holders of any class of
securities then entitled to receive any such Options or
Convertible Securities, then the maximum number of shares (as
set forth in the instrument relating thereto without regard to
any provisions contained therein designed to protect against
dilution) of Common Stock issuable upon the exercise of such
Options, or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common
Stock issued as of the time of such issue of Options or
Convertible Securities or, in case such a record date shall
have been fixed, as of the close of business on such record
date, provided that in any such case in which Additional
Shares of Common Stock are deemed to be issued:
(i) no further adjustments in the Per Share Exercise
Price shall be made by reason of the subsequent issue
of Convertible Securities or shares of Common Stock
upon the exercise of such Options or the issue of
Common Stock upon the conversion or exchange of such
Convertible Securities; and
(ii) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise,
for any increase or decrease in the consideration
payable to the Company, or increase or decrease in
the number of shares of Common Stock issuable, upon
the exercise, conversion or exchange thereof, the Per
Share Exercise Price computed taking into account the
original issuance of such Options or Convertible
Securities (or upon the occurrence of a record date
with respect thereto), and any subsequent adjustments
based thereon, by reason of any such increase or
decrease becoming effective, shall be recomputed to
reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or
exchange under such Convertible Securities (provided,
however, that no such adjustment of the Per Share
Exercise Price shall affect Common Stock previously
issued upon exercise of this Warrant).
(f) Determination of Consideration. For purposes of this Section
5, the consideration received by the Company for the issue of
any Additional Shares of Common Stock shall be computed as
follows:
(i) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be the
aggregate amount of cash received by the
Company; and
(B) insofar as it consists of property other
than cash, be computed at the fair value
thereof at the time of the issue, as
determined in good faith by the vote of a
majority of the Board, or if the Board
cannot reach such agreement, by a qualified
independent public accounting firm, other
than the accounting firm then engaged as the
Company's independent auditors.
(ii) Options and Convertible Securities. The consideration
per share received by the Company for Additional
Shares of Common Stock deemed to have been issued
pursuant to subsection (e) above, relating to Options
and Convertible Securities, shall be determined by
dividing:
(A) the total amount, if any, received or
receivable by the Company as consideration
for the issue of such Options or Convertible
Securities, plus the minimum aggregate
amount of additional consideration (as set
forth in the instruments relating thereto,
without regard to any provision contained
therein designed to protect against
dilution) payable to the Company upon the
exercise of such Options or the conversion
or exchange of such Convertible Securities,
or in the case of Options for Convertible
Securities, the exercise of such Options for
Convertible Securities and the conversion or
exchange of such Convertible Securities, by
(B) the maximum number of shares of Common Stock
(as set forth in the instruments relating
thereto, without regard to any provision
contained therein designed to protect
against dilution) issuable upon the exercise
of such Options or conversion or exchange of
such Convertible Securities.
(g) Other Provisions Applicable to Adjustment Under this Section.
The following provisions shall be applicable to the
adjustments in Per Share Exercise Price as provided in this
Section 5:
(i) Treasury Shares. The number of shares of Common Stock
at any time outstanding shall not include any shares
thereof then directly or indirectly owned or held by
or for the account of the Company.
(ii) Other Action Affecting Common Stock. If the Company
shall take any action affecting the outstanding
number of shares of Common Stock other than an action
described in any of the foregoing subsections 5(b)
through 5(e) hereof, inclusive, which would have an
inequitable effect on the holders of this Warrant,
then the Per Share Exercise Price shall be adjusted
in such manner and at such time as the Board on the
advice of the Company's independent public
accountants may in good faith determine to be
equitable in the circumstances.
(iii) Minimum Adjustment. No adjustment of the Per Share
Exercise Price shall be made if the amount of any
such adjustment would be an amount less than one
percent (1%) of the Per Share Exercise Price then in
effect, but any such amount shall be carried forward
and an adjustment in respect thereof shall be made at
the time of and together with any subsequent
adjustment which, together with such amount and any
other amount or amounts so carried forward, shall
aggregate an increase or decrease of one percent (1%)
or more.
(iv) Certain Adjustments. The Per Share Exercise Price
shall not be adjusted upward except in the event of a
combination of the outstanding shares of Common Stock
into a smaller number of shares of Common Stock or in
the event of a readjustment of the Per Share Exercise
Price.
(h) Adjustment to Lowest Price. The Company acknowledges and
agrees that the foregoing provisions of this Section 5 may
require adjustments to be made in response to various
circumstances, which adjustments may result in varying
calculations of the Per Share Exercise Price, and that,
notwithstanding any of such foregoing provisions, the Per
Share Exercise Price applicable upon a given exercise of this
Warrant shall, in any case, be the lowest of the amounts so
calculable up to the date of exercise.
(i) Notices of Adjustments. Whenever the Per Share Exercise Price
is adjusted as herein provided, an officer of the Company
shall compute the adjusted Per Share Exercise Price in
accordance with the foregoing provisions and shall prepare a
written certificate setting forth such adjusted Per Share
Exercise Price and showing in detail the facts upon which such
adjustment is based, and such written instrument shall
promptly be delivered to the recordholders of this Warrant.
Fractional Shares. The Company shall not be required upon the exercise of this
Warrant to issue any fractional shares, but shall make an adjustment
therefor in cash on the basis of the mean between the low bid and high
asked prices for the Warrant Shares on the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. or the
closing market price of the Warrant Shares on a national securities
exchange on the trading day immediately prior to the date of exercise,
whichever is applicable, or if neither is applicable, then on the basis
of the then fair market value of a Warrant Share as shall be reasonably
determined by the Board.
Limitation on Sales, etc. The Registered Holder acknowledges that this Warrant
and the Warrant Shares have not been registered under the Securities
Act of 1933, as amended (the "Act"), and agrees, except as specified in
the proviso hereto, not to sell, pledge, distribute, offer for sale,
transfer or otherwise dispose of this Warrant or any Warrant Shares
issued upon its exercise in the absence of (a) an effective
registration statement under the Act as to this Warrant or the Warrant
Shares issued upon its exercise or both, as the case may be, and
registration or qualification of this Warrant or such Warrant Shares
under any applicable Blue Sky or state securities law then in effect,
or (b) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required; provided that the
Registered Holder may transfer this Warrant at any time to any of its
affiliates.
Without limiting the generality of the foregoing, unless the offering
and sale of the Warrant Shares to be issued upon the exercise of the
Warrant shall have been effectively registered under the Act and unless
the sale is to an affiliate of the Registered Holder, the Company shall
be under no obligation to issue the shares covered by such exercise
unless and until the Registered Holder shall have executed an
investment letter in form and substance reasonably satisfactory to the
Company, including a warranty at the time of such exercise that it is
acquiring such shares for its own account, for investment and not with
a view to, or for sale in connection with, the distribution of any such
shares, in which event a legend in substantially the following form
shall be endorsed upon the certificate(s) representing the Warrant
Shares issued pursuant to such exercise:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
pursuant to the securities or "Blue Sky" laws of any state.
Such securities may not be offered, sold, transferred,
pledged, hypothecated or otherwise assigned, except pursuant
to (i) a registration statement with respect to such
securities which is effective under such Act, (ii) Rule 144 or
Rule 144A under such Act, or (iii) any other exemption from
registration under such Act, provided that, if requested by
the Company, an opinion of counsel reasonably satisfactory in
form and substance is furnished to the Company that an
exemption from the registration requirements of such Act is
available.
Valid Issuance; Reservation of Stock. All shares of Common Stock issuable
upon the exercise of this Warrant shall, upon issuance by the Company,
be validly issued, fully paid and nonassessable, free from preemptive
rights and free from all taxes, liens or charges with respect thereto
created or imposed by the Company. The Company will at all times
reserve and keep available, solely for issuance and delivery upon the
exercise of this Warrant, such Warrant Shares and other stock,
securities and property, as from time to time shall be issuable upon
the exercise of this Warrant and shall, if required to effect the
purposes of this Warrant, use its best efforts to cause the
authorization of additional capital stock of the Company through the
amendment of the Company's articles of incorporation or otherwise.
Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant
and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation
of this Warrant, the Company will issue, in lieu thereof, a new Warrant
of like tenor.
Transfers, etc. The Registered Holder acknowledges and agrees that this Warrant
and its underlying securities are subject to certain restrictions on
transfer set forth in the CCI Shareholders' Agreement, as that term is
defined in the Participation Agreement, and that any transfer of this
Warrant shall be subject to the Registered Holder's compliance with
such transfer restrictions. The Company will maintain a register
containing the names and addresses of the Registered Holders of this
Warrant. Any Registered Holder may change its, his or her address as
shown on the warrant register by written notice to the Company
requesting such change. Until any transfer of this Warrant is made in
the warrant register, the Company may treat the Registered Holder of
this Warrant as the absolute owner hereof for all purposes and shall
not be bound to recognize any equitable or other claim to or interest
in this Warrant on the part of any other person; provided, however,
that if and when this Warrant is properly assigned in blank, the
Company may (but shall not be obligated to) treat the bearer hereof as
the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
Registration Rights. This Warrant shall entitle the Registered Holder of this
Warrant to the registration, holdback, piggyback and other rights set
forth in the Amended and Restated Registration Rights Agreement dated
as of the date hereof by and among the Holder, certain other Persons,
and the Company, by which the Registered Holder agrees to be bound.
Mailing of Notices, etc. All notices and other communications from the Company
to the Registered Holder of this Warrant shall be mailed by first-class
certified or registered mail, postage prepaid, sent by reputable
overnight delivery or by facsimile to the address furnished to the
Company in writing by the last Registered Holder of this Warrant who
shall have furnished an address to the Company in writing. All notices
and other communications from the Registered Holder of this Warrant or
in connection herewith to the Company shall be mailed by first-class
certified or registered mail, postage prepaid, sent by reputable
overnight delivery or by facsimile (801-532-6060) to the Company at its
offices at 102 West 500 South, Suite 320, Salt Lake City, Utah 84101,
to the attention of President, or such other address, or to the
attention of such other officer, as the Company shall so notify the
Registered Holder.
No Rights as Stockholders. Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights
by virtue hereof as a stockholder of the Company.
Change or Waiver. Any term of this Warrant may be changed or waived only by an
instrument in writing signed by the party against whom enforcement of
the change or waiver is sought.
Headings.The headings of this Warrant are for purposes of reference only and
shall not limit or otherwise affect the meaning of any provision of
this Warrant.
Governing Law. This Warrant will be governed by and construed in accordance with
the law of the State of New York including Section 5-1401 of the New York
General Obligations Law. All disputes arising under or relation to this Warrant
shall first be subject to conciliation in accordance with the Rules of
Conciliation of the International Chamber of Commerce and, failing conciliation,
be finally settled under the Rules of Arbitration of the International Chamber
of Commerce by three arbitrators appointed in accordance with said Rules. The
place of arbitration shall be New York, New York. The language of the
arbitration shall be English. In the event any dispute under the Participation
Agreement relates in any way to the validity, performance or interpretation of
this Warrant and an arbitral tribunal is constituted pursuant to Section 11(n)
of the Participation Agreement, all parties to any dispute hereunder agree (i)
to be joined to the procedures initiated pursuant to Section 11(n) of the
Participation Agreement; (ii) to have any proceedings initiated hereunder
consolidated with proceedings initiated pursuant to Section 11(n) of the
Participation Agreement and (iii) to be bound by any ruling of the arbitral
tribunal constituted pursuant to Section 11(n) of the Participation Agreement or
any interim or final award thereof. Submission of disputes to arbitration
pursuant to the Rules of Arbitration of the International Chamber of Commerce,
in consolidation with any disputes submitted to arbitration pursuant to Section
11(n) of the Participation Agreement as provided above, shall be the sole method
of resolving disputes between the Parties hereto. Judgment upon an arbitration
award may be entered in any court having jurisdiction.
Dated: October 18, 1999 CONVERGENCE COMMUNICATIONS, INC.
By: /s/ Troy D'Ambrosio
--------------------------------
Name:
Title:
EXHIBIT A
PURCHASE FORM
To: Convergence Communications, Inc.
102 West 500 South
Suite 320
Salt Lake City, Utah 84101
Dated:
In accordance with the provisions set forth in the attached Warrant,
the undersigned hereby irrevocably elects to purchase _________ shares of the
Common Stock covered by such Warrant and herewith makes payment therefor in full
at the price per share provided for in such Warrant.
The undersigned has had the opportunity to ask questions of and receive
answers from the officers of the Company regarding the affairs of the Company
and related matters, and has had the opportunity to obtain additional
information necessary to verify the accuracy of all information so obtained.
The undersigned understands that the shares have not been registered
under the Securities Act of 1933, as amended, or the securities laws of any
other jurisdiction, and hereby represents to the Company that the undersigned is
acquiring the shares for its own account, for investment, and not with a view
to, or for sale in connection with, the distribution of any such shares.
Signature
Address