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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 17, 1996
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Polish Telephones and Microwave Corporation
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(Exact name of registrant as specified in its Charter)
Texas 0-24622 75-2433637
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
433 East Las Colinas Boulevard, Suite 815, Irving, Texas 75039
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 831-8722
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
On May 17, 1996, the Company acquired all of the issued and
outstanding shares of Telereunion, Inc., a Delaware corporation
("Telereunion"). The acquisition was completed by means of a
merger between Telereunion and a newly formed subsidiary of the
Company. Upon consummation of the merger, the subsidiary changed
its name to Telereunion, Inc. Telereunion distributes Northern
Telcom telecommunications products, as well as Octel voice mail
systems and provides conference calling services in Mexico.
Telereunion's operations are conducted through Vextro de Mexico,
S.A de C.V. ("Vextro"), its 97% owned subsidiary organized under
the laws of the Republic of Mexico.
Under the terms of the acquisition, the Company issued to the
stockholders of Telereunion, in exchange for the issued and
outstanding shares of common stock of Telereunion,: (i) an
aggregate of 1,605,000 shares of the common stock, $.001 par
value per share, of the Company (the "Common Stock"), (ii)
warrants for the purchase of an aggregate of 2,500,000 shares of
Common Stock at an exercise price of $2.19 per share and having a
term of seven years (the "Series A Common Stock Warrants"), (iii)
warrants for the purchase of an aggregate of 95,000 shares of
Common Stock at an exercise price of $2.19 per share and having a
term of seven years (the "Series B Common Stock Warrants"), and
(iv) an aggregate of 380,000 shares of a new series of non-
voting, non-participating preferred stock, $.001 par value per
share, of the Company (the "Series B Preferred Stock"). In
addition, the Company converted and amended certain non-qualified
options outstanding under the Telereunion 1995 Stock Option and
Appreciation Rights Plan to provide for the right to acquire an
aggregate of 216,618 shares of Common Stock for an exercise price
of $1.35 per share. The options are fully vested and immediately
exercisable. The consideration paid by the Company for the
issued and outstanding common stock of Telereunion has been
determined by negotiation between the parties.
The exercise price for the Series A Common Stock Warrants and the
Series B Common Stock Warrants was calculated based upon the
average of the closing price for a share of Common Stock quoted
on the Nasdaq Small Cap market for the twenty (20) trading days
immediately preceding December 22, 1995, the date of execution of
the letter of intent with respect to this acquisition. The
Series A Common Stock Warrants will vest and become exercisable,
if at all, upon the Company meeting certain fiscal year earnings
per share targets, computed in accordance with the terms of the
Series A Common Stock Warrants, as follows: (i) 1,000,000 shares
if earnings per share equals at least $.315 per share; (ii) an
additional 1,000,000 shares if earnings per share (computed to
include the effect of the vesting of 2,000,000 shares under the
Series A Common Stock Warrants) equals at least $.458 per share;
and (iii) an additional 500,000 shares if earnings per share
(computed to include the effect of the vesting of all of the
Series A Common Stock Warrants) equals at least $.75 per share.
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The Series B Common Stock Warrants will vest and become
exercisable, if at all, upon the Company achieving a $5,000,000
increase in net shareholder's equity, computed in accordance with
the terms of the Series B Common Stock Warrants. Both the Series
A Common Stock Warrants and the Series B Common Stock Warrants
are subject to accelerated vesting if the closing price for the
Company's Common Stock as quoted on The Nasdaq Stock Market or
any other reliable public market is at least $12.00 per share for
a period of 90 consecutive trading days during the warrants'
terms.
The Series B Preferred Stock is redeemable by the Company for a
price of $1.00 per share upon the Company achieving a $5,000,000
increase in net stockholder's equity or upon the attainment by
Telereunion of at least $380,000 of net cash flow (as defined) in
any period of 12 consecutive months during the 18 months
following issuance. If a redemption event does not occur within
eighteen months of its issuance, the Series B Preferred Stock is
automatically terminated.
In addition to the foregoing terms, three stockholders of
Telereunion who are the principal executive officers of
Telereunion and its operating subsidiaries received three year
employment agreements. The Company also increased the size of
its Board of Directors by one member, from its pre-acquisition
size of six members to seven. The three "management"
stockholders of Telereunion joined the Board as new directors and
four of the six pre-acquisition directors of the Company comprise
the remaining members of the Board. As a result, the Board of
Directors is comprised of Messrs. Gary Panno, Roy A. Varghese,
Darrel O. Kirkland and Christopher H. Efird and Messrs. Manuel
Landa, Oscar Garcia Mora and Ricardo Orea Gudino.
Mr. Christopher Efird, who is a director of the Company, was also
a director of Telereunion. In addition, Mr. Efird is an employee
of Benchmark Equity Group ("Benchmark"), a stockholder of
Telereunion prior to the acquisition. Mr. Efird received, as
compensation for his services as an employee of Benchmark, 65,625
shares of Common Stock, 37,500 Series A Common Stock Warrants and
11,875 Series B Common Stock Warrants, which shares and warrants
constitute a portion of the Common Stock and warrants issued to
Benchmark at the closing of the acquisition. Mr. Efird
originally joined the Board of the Company on November 17, 1995.
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Item 7. Financial Statements and Exhibits
At this time, it is impracticable to provide the financial
statements of Telereunion and the pro forma financial information
required by this report. The Company will file such statements
and information as an amendment to this report as soon as it is
available, but no later than sixty days after the date this
report is filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Polish Telephones and Microwave Corporation
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(Registrant)
June 3, 1996 /s/ Gary Panno
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Gary Panno
Chief Executive Officer
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Index of Exhibits
Exhibit No. Description
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4.1 - Statement of the Establishment of the Series B Non-
Voting, Non-Participating Preferred Stock
(incorporated herein by reference to Exhibit 4.1 to
the Company's quarterly report on Form 10-QSB for
the quarter ended March 31, 1996)
*10.1 - Form of Series A Common Stock Warrant dated May 17,
1996 between the Company and Manuel Landa, Ricardo
Orea Gudino, Oscar Garcia Mora and Christopher
Efird.
10.2 - Agreement and Plan of Merger dated April 29, 1996
(incorporated herein by reference to Exhibit 10.3
to the Company's quarterly report on Form 10-QSB
for the quarter ended March 31, 1996)
10.3 - Form of Series B Common Stock Warrant dated May 17,
1996 between the Company and Christopher Efird
(incorporated herein by reference to Exhibit 10.5
to the Company's quarterly report on Form 10-QSB
for the quarter ended March 31, 1996)
10.4 - Form of Employment Agreement dated May 14, 1996
between Telereunion and Manuel Landa, Ricardo Orea
Gudino and Oscar Garcia Mora (incorporated herein
by reference to Exhibit 10.6 to the Company's
quarterly report on Form 10-QSB for the quarter
ended March 31 , 1996)
10.5 - Form of Non-Qualified Stock Option Certificate and
Agreement dated May 17, 1996, as amended, between
the Company and Manuel Landa, Ricardo Orea Gudino
and Oscar Garcia Mora (incorporated herein by
reference to Exhibit 10.7 to the Company's
quarterly report on Form 10-QSB for the quarter
ended March 31, 1996)
10.6 - Form of Warrant for Robert Chamberlain dated May
17, 1996 (incorporated herein by reference to
Exhibit 10.8 to the Company's quarterly report on
Form 10-QSB for the quarter ended March 31, 1996)
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* Filed herewith
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FORM OF SERIES A COMMON STOCK WARRANT
The individuals listed below received warrants to purchase
the indicated number of shares of Common Stock pursuant to Series
A Common Stock Warrants dated as of May , 1996 in the form
attached, which were issued pursuant to the Agreement and Plan of
Merger dated April 29, 1996 by and among the Company, PTMC
Acquisition Sub, Inc., Telereunion, Inc. and the stockholders
of Telereunion referenced therein.
Number of Shares
Recipient Subject to Warrants
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Manuel Landa 689,166*
Ricardo Orea 689,167**
Oscar Garcia 689,167***
Christopher Efird 37,500
* Includes warrants to purchase 447,958 shares issued to
Willowtree Developments Ltd., an affiliate of Mr. Landa.
** Includes warrants to purchase 447,959 shares issued to
Bollington Developments Ltd., an affiliate of Mr. Orea.
*** Includes warrants to purchase 447,959 shares issued to
Trafford Park Holdings Ltd., an affiliate of Mr. Garcia.
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SERIES A COMMON STOCK WARRANT
THESE SECURITIES (A) HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933 AND (B) ARE SUBJECT TO THE TERMS OF
AND PROVISIONS OF AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF APRIL 29, 1996 BETWEEN POLISH TELEPHONES AND
MICROWAVE CORPORATION, PTMC ACQUISITION SUB, INC.,
TELEREUNION, INC. AND CERTAIN OF STOCKHOLDERS OF
TELEREUNION, INC. (AS SUCH AGREEMENT MAY BE SUPPLEMENTED,
MODIFIED, AMENDED, OR RESTATED FROM TIME TO TIME, THE
"AGREEMENT"). COPIES OF THE AGREEMENT IS AVAILABLE AT THE
OFFICES OF POLISH TELEPHONES AND MICROWAVE CORPORATION.
WARRANT TO PURCHASE SHARES OF COMMON STOCK, $0.001 PAR VALUE
PER SHARE, OF POLISH TELEPHONES AND MICROWAVE CORPORATION
THIS CERTIFIES that, for value received, _____________________________
(the "Warrantholder"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, to purchase from Polish Telephones and Microwave
Corporation, a Texas corporation (the "Company"), that number of fully paid and
nonassessable shares of the Company's common stock, $0.001 par value per share
(the "Common Stock"), at the purchase price per share (the "Exercise Price") as
set forth in Section 1 below. The number of shares and Exercise Price are
subject to adjustment as provided in Section 10 below.
1. NUMBER OF SHARES; EXERCISE PRICE; TERM.
(a) This Warrant is exercisable for _____________ shares (the "Shares")
of Common Stock at a purchase price of $2.19 per share (the "EXERCISE PRICE").
(b) Subject to the terms and conditions set forth in this Warrant,
this Warrant will be exercisable during the term commencing on the date of this
Warrant and ending on May __, 2003 subject to the following vesting schedule:
(i) This Warrant will vest and become fully exercisable as to 40% of the
Shares upon the attainment by the Company in any fiscal year after the
consummation by the Company of its acquisition of all the outstanding shares
of the capital stock of Telereunion, Inc., a Delaware corporation
("Telereunion"), of earnings (before depreciation, amortization and non-cash
charges
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against the earnings of the Company arising as a result of the vesting of this
Warrant and the other similar warrants issued in connection with the acquisition
of the outstanding capital stock of Telereunion) per share of $0.315, computed
in accordance with generally accepted accounting principles, EXCEPT that only
1,000,000 of the 2,500,000 shares of Common Stock issuable upon exercise of this
Warrant and the other similar warrants issued in connection with the acquisition
of the outstanding capital stock of Telereunion (the "Total Warrant Shares")
will be included in the calculation of the earnings per share of the Company in
all instances regardless of whether the closing price for a share of Common
Stock quoted on the NASDAQ (as defined below) on the date on which such
calculation is made is more or less than the Exercise Price;
(ii) This Warrant will vest and become fully exercisable as to an
additional 40% of the Shares upon the attainment by the Company in any fiscal
year after the consummation by the Company of its acquisition of all the
outstanding shares of the capital stock of Telereunion of earnings (before
depreciation, amortization and non-cash charges against the earnings of the
Company arising as a result of the vesting of this Warrant and the other
similar warrants issued in connection with the acquisition of the outstanding
capital stock of Telereunion) per share of $0.458, computed in accordance
with generally accepted accounting principles, EXCEPT that only 2,000,000 of
the Total Warrant Shares will be included in the calculation of the earnings
per share of the Company in all instances regardless of whether the closing
price for a share of Common Stock quoted on the NASDAQ on the date on which
such calculation is made is more or less than the Exercise Price; and PROVIDED
that the percentage of the Shares as to which this Warrant will vest and become
fully exercisable pursuant to this clause (ii) will be increased to 80% of the
Shares if there has been no vesting of the Warrant and the right to exercise
this Warrant pursuant to the immediately preceding clause (i); and
(iii) This Warrant will vest and become fully exercisable as to an
additional 20% of the Shares upon the attainment by the Company in any fiscal
year after the consummation by the Company of its acquisition of all the
outstanding shares of the capital stock of Telereunion of earnings (before
depreciation, amortization and non-cash charges against the earnings of the
Company arising as a result of the vesting of this Warrant and the other
similar warrants issued in connection with the acquisition of the outstanding
capital stock of Telereunion) per share of $0.75, computed in accordance with
generally accepted accounting principles, PROVIDED that 2,500,000 of the
Total Warrant Shares will be included in the calculation of the earnings per
share of the Company in all instances regardless of whether the closing price
for a share of Common Stock quoted on the NASDAQ on the date on which such
calculation is made is more or less than the Exercise Price; and PROVIDED
that the percentage of the Shares as to which this Warrant will vest and
become fully exercisable pursuant to this clause (ii) will be increased to
100% of the Shares if there has been no vesting of the Warrant and the right
to exercise this Warrant pursuant to the immediately preceding clause (ii).
(iv) Notwithstanding the foregoing, this Warrant will vest and become
fully exercisable as to any of the Total Warrant Shares not already vested
and exercisable if the closing price for a share of Common Stock quoted on
The Nasdaq Stock Market or other reliable public market (e.g., either the New
York Stock Exchange or the American Stock Exchange) equals or exceeds $12.00
for any ninety (90) consecutive trading days.
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2. TRANSFER AND EXCHANGE. This Warrant and all options and rights under
this Warrant are transferable, as to all or any part of the number of Shares
issuable under the terms of this Warrant, by the holder of this Warrant, in
person or by duly authorized attorney, on the books of the Company upon
surrender of the Warrant at the principal offices of the Company, together
with the attached, properly endorsed, Assignment Form. Absent any such transfer,
the Company may deem and treat the registered holder of this Warrant at any time
as the absolute owner of the Warrant for all purposes and will not be affected
by any notice to the contrary. If this Warrant is transferred in part, the
Company will, at the time of surrender, issue to the transferee a Warrant
covering the number of issuable Shares transferred and to the transferor a
Warrant covering the number of issuable Shares not transferred.
3. EXERCISE.
(a) This Warrant may be exercised as to all or any of the Shares as
to which this Warrant has vested and become fully exercisable at any time
or from time to time on or after the date on which such vesting of the
Warrant occurs as to such Shares, on any Business Day (as defined in
Section 9 below). In order to exercise this Warrant, in whole or in part,
the holder will deliver to the Company at its principal offices (i) a
written notice of such holder's election to exercise its Warrant,
substantially in the form of the Warrant Exercise Notice attached to this
Warrant, (ii) payment of the Exercise Price, in an amount equal to the
aggregate purchase price for all Shares to be purchased pursuant to such
exercise, and (iii) the Warrant. Upon receipt of such notice, the Company
will, as promptly as practicable, and in any event within ten (10) Business
Days, execute, or cause to be executed, and deliver to such holder a
certificate or certificates representing the aggregate number of full
shares of Common Stock issuable upon such exercise. The stock certificate
or certificates so delivered will be in such denominations as may be
specified in such notice and will be registered in the name of such holder,
or such other name as designated in such notice. A Warrant will be deemed
to have been exercised, such certificate or certificates will be deemed to
have been issued, and such holder or any other person or entity so
designated or named in such notice will be deemed to have become a holder
of record of such shares for all purposes, as of the date that such notice
(together with payment of the Exercise Price and the Warrant) is received
by the Company. If the Warrant has been exercised in part, the Company
will, at the time of delivery of such certificate of certificates, either
deliver to such holder a new Warrant evidencing the rights of such holder
to purchase a number of Shares with respect to which the Warrant has not
been exercised, which new Warrant will, in all other respects, be identical
to this Warrant, or, at the request of such holder, appropriate notation
may be made on the Warrant and the Warrant returned to such holder.
(b) Payment of the Exercise Price will be made, at the option of the
holder, by (i) company or individual check (subject to collection),
certified or official bank check or (ii) cancellation of any debt owed by
the Company to the holder. If the holder surrenders a combination of cash
or cancellation of any debt owed by the Company to the holder, the holder
will specify the respective number of shares of Common Stock to be
purchased with each form of consideration, and the foregoing provisions
will be applied to each form of consideration with the same effect as if
the Warrant were being separately exercised with respect to each
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form of consideration; PROVIDED, HOWEVER, that a holder may designate that
any cash to be remitted to a holder in payment of debt be applied, together
with other monies, to the exercise of the portion of the Warrant being
exercised for cash.
(c) In lieu of exercising this Warrant in the manner set forth in
paragraph 3(b) above, this Warrant may be exercised by surrender of the
Warrant without payment of any other consideration, commission or
remuneration, together with the cashless exercise subscription form at the
end hereof, duly executed. The number of shares to be issued in exchange
for the Warrant shall be the product of (x) the excess of the Market Price
(as defined below) of the Common Stock on the date of surrender of the
Warrant and the exercise subscription form OVER the Exercise Price per
share and (y) the number of shares subject to issuance upon exercise of
the Warrant, divided by the Market Price of the Common Stock on such date.
Upon such exercise and surrender of this Warrant, the Company will (i)
issue a certificate or certificates in the name of the holder for the
largest number of whole shares of the Common Stock to which the holder
shall be entitled and, in lieu of any fractional share of the Common Stock
to which the Holder shall be entitled, pay cash equal to the fair value of
such fractional share (determined in such reasonable manner as the Board
of Directors of the Company shall determine), and (ii) deliver the other
securities and properties receivable upon the exercise of this Warrant,
pursuant to the provisions of this Warrant.
(d) The market price of a share of the Common Stock (the "Market
Price") on any date of determination shall be (i) the average of the last
reported sale price of the Common Stock on the five business days
immediately preceding the date of determination as reported on the Nasdaq
Market ("NASDAQ") or (ii) if there is no such reported sale on any of the
dates in question, the average of the closing bid and asked quotations as
so reported on NASDAQ for such dates.
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares will be issued upon the exercise of this Warrant.
In lieu of any fractional share to which a holder would otherwise be entitled,
such holder will be entitled to receive, at its option, either (i) a cash
payment equal to the excess of fair market value for such fractional share
above the Exercise Price for such fractional share (as mutually determined by
the Company and the holder) or (ii) a whole share if the holder tenders the
Exercise Price for one whole share.
5. CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares
upon the exercise of this Warrant will be made without charge to the holder
for any issue or transfer tax or other incidental expense in respect of the
issuance of such certificates, all of which taxes and expenses will be paid
by the Company.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the holder
to any voting rights, dividend rights or other rights as a shareholder of the
Company prior to exercise.
7. WARRANT REGISTER. The Company will, at all times while this Warrant
remains outstanding and exercisable, keep and maintain at its principal office
a register in which the registration,
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transfer, and exchange of the Warrants will be provided for. The Company will
not at any time, except upon the dissolution, liquidation, or winding up of the
Company, close such register so as to result in preventing or delaying the
exercise or transfer of any Warrant.
8. LOST, STOLEN, MUTILATED, OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated, or destroyed, the Company will issue a new Warrant
of like denomination, tenor, and date upon receipt of and appropriate affidavit
and indemnity executed by the Holder. Any such new Warrant will constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant is at any time enforceable by
any person or entity.
9. BUSINESS DAYS. A "Business Day" is any day other than Saturday,
Sunday, or legal holiday. If the last or appointed day for the taking of any
action or the expiration of any right required or granted in this Warrant is
not a Business Day, then such action may be taken or such right may be
exercised on the following Business Day.
10. ADJUSTMENTS.
(a) ADJUSTMENT EVENTS. The Warrant will be exercisable for the number
of shares of Common Stock in such manner that, following the complete and full
exercise of this Warrant, the amount of Common Stock and other property issued
to the holder of this Warrant will equal the aggregate number of shares of
Common Stock set forth in Section 1(a), as adjusted, to the extent necessary,
to give effect to the following events:
(i) (A) The holder of this Warrant will be entitled to an
adjustment as set forth in Section 10(a)(i)(B), if at any time or
from time to time, the holders of any class of Common Stock or any
option, warrant, right, or similar security exercisable into or
exchangeable for Common Stock ("Common Stock Equivalent") have
received, or (on or after the record date fixed for the determination
of shareholders eligible to receive) have become entitled to receive,
without payment therefor, (I) property (other than cash) by way of
dividend or distribution; or (II) property (including cash) by way of
spin-off, split-up, reclassification (including any reclassification
in connection with a consolidation or merger in which the Company is
the surviving corporation), recapitalization, combination of shares
into a smaller number of shares, or similar corporate restructuring.
(B) In each such case, the holder of this Warrant will be
entitled to receive for each share of Common Stock issuable under
this Warrant as of the record date fixed for such distribution, the
greatest per share amount of property received or receivable by any
holder of any class of Common Stock or Common Stock Equivalent. With
respect to any subsequent distribution, all such consideration
receivable pursuant to this Section 10(a)(i) will be deemed
outstanding and owned by the holder when determining the amount of
consideration due to the holder upon exercise of the Warrant.
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(C) This Section 10(a)(i) does not apply to additional
shares of Common Stock issued as a stock dividend or in a stock-split.
(ii) If at any time there occurs any stock split, stock
dividend, reverse stock split, or other subdivision of the Common
Stock, then the number of shares of Common Stock to be received and
the Exercise Price to be paid will be proportionately adjusted.
(iii) (A) The following events will constitute "Reorganization
Events": (I) any reclassification or change of outstanding shares of
any class of Common Stock or Common Stock Equivalent (other than a
change in par value, or from par value to no par value, or from no
par value to par value), or (II) any consolidation of the Company
with, or merger or share exchange of the Company with or into,
another entity, or (III) any sale of all or substantially all of the
property, assets, business, income or revenue generating capacity,
or goodwill of the Company.
(B) Upon the occurrence of a Reorganization Event, the
Company, or the successor or other entity, as the case may be, will
provide that the holder of this Warrant will receive the highest per
share kind and amount of consideration (including cash) received or
receivable upon such Reorganization Event by any holder of any class
of Common Stock or Common Stock Equivalent for each Share issuable
under this Warrant immediately prior to such Reorganization Event (as
adjusted pursuant to Section 10(a)(i)). Any such successor entity,
which thereafter will be deemed to be the Company for purposes of this
Warrant, will provide for adjustments that are as nearly equivalent
as may be possible to the adjustments provided for by this Section 10.
(v) In case any event occurs as to which the preceding Sections
10(a)(i) through (iii) are not strictly applicable, but as to which
the failure to make any adjustment would not fairly protect the
purchase rights represented by the Warrants in accordance with the
essential intent and principles of this Section 10, then, in each such
case, the holder and the Company will negotiate for 30 days in good
faith in an attempt to reach a mutually agreeable solution. If, at
the end of such 30-day period the Company and the holder have not
reached such an agreement, the holder may appoint an independent
investment bank or firm of independent public accountants reasonably
acceptable to the Company, which will give its opinion as to the
adjustment, if any, on a basis consistent with the essential intent
and principles established in this Section 10, necessary to preserve
the purchase rights represented by this Warrant. Upon receipt of such
opinion, the Company will promptly deliver a copy of such opinion to
the holder and will make the adjustments described in such opinion.
The fees and expenses of such investment bank or independent public
accountants will be borne equally by the Company and the holder.
(b) ROUNDING. Any calculation under this Section 10 will be made to
the nearest one ten-thousandth of a share and the number of issuable Shares
resulting from such
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calculation will be rounded up to the next whole share of Common Stock
comprising issuable Shares.
(c) NOTICE OF EVENTS.
(i) In the event of (A) any setting by the Company of a record
date with respect to the holders of any class of the capital stock of
the Company for the purpose of determining which of such holders are
entitled to dividends, repurchases of securities or other
distributions, or any right to subscribe for, purchase or otherwise
acquire any shares of such capital stock or other property or to
receive any other right; or (B) any capital reorganization of the
Company, or reclassification or recapitalization of the capital stock
of the Company or any transfer of all or a majority of the assets,
business, or revenue or income generating capacity of the Company, or
consolidation, merger, share exchange, reorganization, or similar
transaction involving the Company; or (C) any voluntary or involuntary
dissolution, liquidation, or winding up of the Company; or (D) any
proposed issue or grant by the Company of any capital stock of the
Company, or any right or option to subscribe for, purchase, or
otherwise acquire any capital stock of the Company (other than the
issue of Issuable Warrant Shares upon exercise of this Warrant), then,
in each such event, the Company will deliver or cause to be delivered
to the holders a notice specifying, as the case may be, (I) the date
on which any such record is to be set for the purpose of such
dividend, distribution, or right, and stating the amount and character
of such dividend, distribution, or right; (II) the date as of which
the holders of record will be entitled to vote on any reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
share exchange, conveyance, dissolution, liquidation, or winding-up;
(III) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, share exchange,
conveyance, dissolution, liquidation, or winding-up is to take place
and the time, if any is to be fixed, as of which the holders of record
of any class of capital stock of the Company will be entitled to
exchange their shares of capital stock for securities or other
property deliverable upon such event; (IV) the amount and character
of any capital stock, property, or rights proposed to be issued or
granted, the consideration to be received therefor, and, in the case
of rights or options, the exercise price thereof, and the date of
such proposed issue or grant and the persons or class of persons to
whom such proposed issue or grant will be offered or made; and (V)
such other information as the holders may reasonably request. Any
such notice will be deposited in the United States mail, postage
prepaid, at least thirty (30) days prior to the date therein
specified, and notwithstanding anything in this Agreement or this
Warrant to the contrary the holders may exercise this Warrant within
thirty (30) days from the receipt of such notice.
(ii) If there is any adjustment as provided above in Section
10(a), the Company will immediately cause written notice thereof to
be sent to the holder, which notice will be accompanied by a
certificate of the independent public accountants of the Company
setting forth in reasonable detail the facts requiring any such
adjustment in the number of shares receivable after such adjustment.
At the request of the holder and
7
<PAGE>
upon surrender of this Warrant of such holder, the Company will
reissue this Warrant of such holder in a form conforming to such
adjustments.
11. ASSURANCES. The Company will not by any action including, without
limitation, amending, or permitting the amendment of, the charter documents,
bylaws, or similar instruments of the Company or through any reorganization,
reclassification, transfer of assets, consolidation, merger, share exchange,
dissolution, issue or sale of securities, or any other similar voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the holder against impairment
or dilution. Without limiting the generality of the foregoing, the Company
will, with respect to this Warrant, (i) take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock, free and clear of
all liens, encumbrances, equities, and claims and (ii) use its best efforts to
obtain all such authorizations, exemptions, or consents from any public
regulatory body having jurisdiction as may be necessary to enable the Company
to perform its obligations under this Warrant.
12. MISCELLANEOUS.
(a) EMPLOYMENT OF HOLDER. The parties hereto acknowledge and
agree that the issuance, vesting and exercise of this Warrant is in no way
tied to, or conditioned upon, the employment by the Company or any affiliate
of the Company of the holder hereof or any person who is affiliated with or is
related to the holder hereof.
(b) SUCCESSORS. This Warrant will be binding upon any successors or
assigns of the Company.
(C) GOVERNING LAW. THIS WARRANT WILL CONSTITUTE A CONTRACT UNDER
THE LAWS OF TEXAS AND FOR ALL PURPOSES WILL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF SAID STATE, WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES OR ANY OTHER PRINCIPLE THAT COULD REQUIRE THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION.
(d) ATTORNEY'S FEES. In any litigation, arbitration or court
proceeding between the Company and the holder relating hereto, the prevailing
party will be entitled to reasonable attorneys' fees and expenses incurred in
enforcing this Warrant.
(f) NOTICE. Any notice required or permitted under this Warrant
will be deemed effectively given upon personal delivery to the party to be
notified or upon deposit with the United States Post Office, by certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated below for such party, or at such other address as such other party
may designate by ten-day advance written notice.
8
<PAGE>
IN WITNESS WHEREOF, POLISH TELEPHONES AND MICROWAVE CORPORATION has caused
this Warrant to be executed by its officer thereunto duly authorized.
Dated: May __, 1996
POLISH TELEPHONES AND MICROWAVE
CORPORATION
By: ________________________________
Title: _____________________________
Address: Waterway Tower
433 Las Colinas Boulevard
Suite 815
Irving, Texas 75039
Attn: President
WARRANT HOLDER:
________________________________
________________________________
________________________________
________________________________
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<PAGE>
WARRANT EXERCISE NOTICE
To: Polish Telephones and Microwave Corporation
1. The undersigned hereby elects to purchase ___________ shares of
Common Stock (the "SHARES"), of Polish Telephones and Microwave Corporation
(the "Company") pursuant to the terms of the attached Warrant, and tenders
payment of the purchase price in cash or cancellation of indebtedness owed by
the Company to the undersigned, as provided in Section 3(b), and/or by surrender
of this Warrant (or a portion hereof) in accordance with Section 3(c) of such
Warrant, in each case as indicated in the accompanying instruction letter from
the undersigned.
2. Please issue a certificate or certificates representing said Shares
in the following names:
NAME NUMBER OF ISSUABLE SHARES
---- -------------------------
3. Please issue a new Warrant for the unexercised portion of the
attached Warrant in the following names:
NAME NUMBER OF SHARES
---- ----------------
Dated: _____________, 19__.
By: __________________________________
[Name]
[Title, if applicable]
<PAGE>
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to (Please Print):
whose address is_____________________________
_____________________________________________
Dated:___________________, 19__.
Holder's Signature:_____________________________
Holder's Address: _______________________________
Signature Guaranteed: ____________________________________
NOTE: The signature to this Assignment Form must correspond with the name as
it appears on the face of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
