Exhibit 10.1


 




 





NOTE REPURCHASE, EXCHANGE AND TERMINATION
AGREEMENT


 


by and among


 


iBASIS, INC.


 


 


and


 


 


THE NOTEHOLDER SIGNATORIES HERETO


 


Dated as of April 27, 2004


 


 


REPURCHASE OF $25,175,000 PRINCIPAL AMOUNT OF
SENIOR SECURED NOTES


 


and


 


ISSUANCE OF WARRANTS TO PURCHASE

5,176,065 SHARES OF COMMON STOCK




 





 

















 


This NOTE REPURCHASE, EXCHANGE AND AMENDMENT AGREEMENT, dated as of
April 27, 2004 (this “Agreement”), is by and among iBASIS, INC., a
Delaware corporation (the “Company”), and the holders of the Notes (as
defined below), identified on the signature pages hereto (the “Noteholders”).


 


WHEREAS, the Company desires to repurchase an aggregate principal
amount of $25,175,000 of the Company’s 11.5% Senior Secured Notes due 2005 (the
“Notes”) from the Noteholders, and the Noteholders desire to tender such
Notes to the Company in exchange for (i) payment in cash of the sum of (A) 100%
of the aggregate outstanding principal amount of the Notes being prepaid and
(B) accrued and unpaid interest on such prepaid principal amount to the
prepayment date, and (ii) warrants (the “Warrants”) to purchase a number
of shares of Common Stock, $0.001 par value, of the Company (the “Common
Stock”) equal to (x) the aggregate principal amount of the Notes being
prepaid, multiplied by (y) 0.2056033.


 


NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:


 


1.                                       Definitions;
Certain Rules of Construction. 
Certain capitalized terms are used in this Agreement and in the other
Documents with the specific meanings defined below in this Section 1.  Except as otherwise explicitly specified to
the contrary or unless the context clearly requires otherwise, (a) the
capitalized term “Section” refers to sections of this Agreement, (b) the
capitalized term “Exhibit” refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
“including” shall be construed as “including without limitation,” (e)
accounting terms not otherwise defined herein have the meaning provided under
GAAP, (f) references to a particular statute or regulation include all rules
and regulations thereunder and any successor statute, regulation or rules, in
each case as from time to time in effect, (g) references to a particular Person
include such Person’s successors and assigns to the extent not prohibited by
this Agreement and the other Documents and (h) references to “Dollars” or “$”
mean United States funds.  References to
“the date hereof” mean the date first set forth above.


 


“Agreement” is defined in the preamble hereto.


 


“Book-Entry Security” is defined in Section 2.2 hereof.


 


“Closing” is defined in Section 2.4 hereof.


 


“Closing Date” means the date on which the transactions
contemplated by the New Financing are consummated.


 


“Code” means the Internal Revenue Code of 1986.


 


“Common Stock” is defined in the preamble hereto.


 


“Company” is defined the preamble to this Agreement.


 

















 


“Control” means, with respect to any Person, the possession, directly
or indirectly, of the power to (a) vote 10% or more of the capital securities
ordinary voting power for the election of directors of such Person or (b)
direct or cause the direction of management and policies of such Person,
whether through the ownership of voting capital securities, by contact or
otherwise, either alone or in conjunction with others.  The words “Controlling” and “Controlled”
have correlative meanings.


 


“Depository” means the Depository appointed pursuant to
Section 2.3 hereof, to which the Notes and Warrants in typewritten form
representing Book-Entry Securities are delivered on the Closing Date pursuant
to Section 2.3 hereof.


 


“Documents” means each of the Warrant and the Warrant Agreement.


 


“Effective Date” is defined in Section 13.10 hereof.


 


“ERISA” means the Employee Retirement Income Security Act of
1974.


 


“Exchange Act” means the Securities Exchange Act of 1934.


 


“Exchange Act Reports” means the Company’s reports filed with
the SEC since December 31, 2002 pursuant to Section 13 of the
Exchange Act.


 


“Existing Convertible Notes” means the Company’s 53⁄4 Convertible
Subordinated Notes due 2005.


 


“Existing Convertible Notes Indenture” means the Indenture dated
as of March 15, 2000 between the Company and The Bank of New York, as trustee,
governing the Existing Convertible Notes (as amended, modified or supplemented
from time to time).


 


“GAAP” means generally accepted accounting principles in effect
within the United States of America, consistently applied.


 


“Global Warrant” is defined in Section 2.2 hereof.


 


“Governmental Authority” means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.


 


“Governing
Documents” means, as to any Person, the certificate or articles of
incorporation and by-laws or other organizational or governing documents of
such Person.


 


“JMG Exchange Agreement” means that certain Securities Exchange
Agreement, dated as of February 21, 2003, by and among the Company, iBasis
Global, Inc., iBasis Securities Corporation, JMG Triton Offshore Limited CITCO,
U.S. Bank National Association as Collateral Agent, and such other exchanging
holders named therein, as amended and supplemented from time to time prior to
the date hereof.


 


2

















 


“Lien” means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).


 


“Majority Noteholders” means Noteholders holding, at any
time,  Notes in an outstanding principal
amount greater than fifty percent (50%) of the total principal amount of all
Notes outstanding at such time.


 


“Material Adverse Effect” means a material adverse effect on the
present or future business, assets, operations, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.


 


“New Exchange” means the transactions contemplated by the
Company’s exchange of its Existing Convertible Notes for its 63⁄4 Convertible
Subordinated Notes due 2009, as described in the Company’s Registration
Statement on Form S-4 to be filed with the SEC on or about April 27, 2004.


 


“New Financing” means the sale and issuance by the Company of
senior secured notes or other securities, prior to, or contemporaneous with,
the transactions contemplated by this Agreement, generating net proceeds therefrom
received by the Company of no less than the aggregate principal amount of Notes
to be purchased at the Closing.


 


“Notes” is defined in the preamble hereto.


 


“Person” means any individual, partnership, joint venture,
limited liability company, corporation, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.


 


“Registration Statements” means the Company’s registration
statements filed with the SEC since December 31, 2002 pursuant to the
Securities Act.


 


“Requirement of Law” means, as to any Person, the Governing
Documents of such Person, and any law, treaty, rule, regulation, direction,
ordinance, criterion or guideline or determination of a court or other
Governmental Authority or determination of an arbitrator, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.


 


“SEC” means the U.S. Securities and Exchange Commission.


 


“SEC Reports” means the Exchange Act Reports and the
Registration Statements.


 


“Securities Act” means the Securities Act of 1933.


 


“Subsidiary” means with respect to any Person at any time, (a)
any other Person the accounts of which would be consolidated with those of such
first Person in its consolidated financial statements as of such time, and (b)
any other Person (i) which is, at such time, Controlled by, or (ii) capital
securities of which having ordinary voting power to elect a majority


 


3

















 


of the board of directors (or other persons having similar functions),
or other ownership interest of which ordinarily constituting a majority voting
interest, are at such time, directly or indirectly, owned or Controlled by, in
the case of each of clauses (i) and (ii), such first Person or one or more of
its Subsidiaries or by such first Person and one or more of its
Subsidiaries.  Unless otherwise
expressly provided, all references herein to “Subsidiary” mean a Subsidiary of
the Company.


 


“Symphony Exchange Agreement” means that certain Securities
Exchange Agreement, dated as of January 30, 2003, by and among the
Company, iBasis Global, Inc., iBasis Securities Corporation, the Symphony Funds
identified on the signature pages thereto and U.S. Bank National Association as
Collateral Agent, as amended and supplemented from time to time prior to the
date hereof.


 


“UCC” means the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts.


 


“U.S.” means the United States of America.


 


“Warrant Agreement” means the 2004 Warrant and Registration
Rights Agreement to be entered into by the Company and U.S. Bank National
Association, as Warrant Agent, substantially in the form of Exhibit A
attached hereto (as amended, modified or supplemented from time to time).


 


“Warrants” is defined in the preamble hereto.


 


“in writing” means any form of written communication or a
communication by means of telex, facsimile transmission, telegraph or cable.


 


2.                                       Repurchase
of the Notes; Issuance of the Warrants.


 


2.1.                              Repurchase
of the Notes; Issuance of the Warrants. Subject to the terms and conditions
hereof, the Company agrees that it will repurchase from each of the Noteholders
set forth on Schedule 1 attached hereto, and each such Noteholder
severally agrees that it will tender to the Company, on the Closing Date, for
cancellation and retirement Notes in the aggregate principal amount set forth
opposite such Noteholder’s name on Schedule 1 attached hereto, in
exchange for (i) payment in cash of the sum of (A) 100% of the aggregate
outstanding principal amount of such Notes being prepaid and (B) any accrued
and unpaid interest on such prepaid principal amount through and until the
Closing Date, and (ii) Warrants to purchase a number of shares of Common Stock
equal to (x) the aggregate principal amount of such Notes being prepaid,
multiplied by (y) 0.2056033, such Warrants to have an initial exercise price of
$1.85 (subject to adjustment as provided in the Warrant Agreement); provided,
however, (i) in the event that the conversion price per share of any
convertible notes issued in connection with the New Exchange or a New Financing
is lower than $1.85, the initial exercise price for such Warrants shall instead
be equal to such lower conversion price, and (ii) in the event that any
convertible notes issued in connection with the New Financing or New Exchange
are convertible for any property other than shares of Common Stock or for any
property in addition to shares of


 


4

















 


Common Stock,
at the election of the Majority Noteholders, the Warrants shall be exercisable
for such other or additional property in addition to any shares of Common Stock
into which such notes are convertible and the initial exercise price of the
Warrants shall be equal to the conversion price of such notes. Without limiting
the foreging, in the event that as part of a New Financing the Company raises
more than $10,000,000 from the issuance of shares of Common Stock or shares of
preferred stock convertible into shares of Common Stock  or issues in a New Financing any such shares
of capital stock at a purchase price of less than $1.40 per share of Common
Stock (assuming the conversion of any shares of preferred stock into shares of
Common Stock and taking into account in determining the purchase price of such
shares of Common Stock, the value of any additional property issued or
delivered together therewith as part of a unit), the initial exercise price of
such Warrants shall be equal to the exercise price that such Warrants would
have had in the event that such Warrants were issued immediately prior to the
issuance of such shares in the New Financing at an initial exercise price of
$1.85, and such exercise price were immediately adjusted pursuant to the terms
of Section 7.4 of the Warrant Agreement, assuming for purposes of this
single adjustment only, that the Fair Market Value (as defined in the Warrant
Agreement) of a share of Common Stock is $1.85. 


 


2.2.                              Issuance
of Warrants upon Failure to Repurchase Notes.  In the event that the New Exchange is consummated and the Company
does not repurchase all of a Noteholder’s Notes as contemplated hereby, for any
reason or no reason, other than as a result of a breach of this Agreement by
such Noteholder, the Company shall issue to the non-breaching Noteholders,
promptly following consummation of the New Exchange, Warrants to purchase a
number of shares of Common Stock equal to (x) the aggregate principal amount of
such Notes held by such Noteholder, multiplied by (y) 0.2056033, such Warrants
to have an initial exercise price of $1.85 (subject to adjustment as provided
in the Warrant Agreement) and the Company shall execute and deliver the Warrant
Agreement.


 


2.3.                              Form
of Warrants.  Each Warrant will be issued
only in fully registered form and will initially be represented by a global
warrant (each, a “Global Warrant”) registered in the name of the
Depository or its nominee, and delivered to the Warrant Agent (as defined in
the Warrant Agreement), as custodian
for the Depository, and recorded in the book-entry system maintained by the
Depository (a “Book-Entry Security”). 
No beneficial owner of an interest in the Warrants will be entitled to
receive a certificate representing such Warrant, except as provided in the
Warrant Agreement.


 


2.4.                              Depository.  The Depository for the Warrants shall
initially be The Depository Trust Company and such Warrants shall be registered
in the name of Cede & Co., its nominee, and shall bear a legend in
substantially the following form:


 


“Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation (“DTC”), to the
Issuer or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS


 


5

















 


WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
any interest herein.”


 


The Depository shall at all times be a
“clearing corporation” as defined in Section 8-102(3) of the UCC or any
successor provision thereto.


 


2.5.                              Closing.  Unless otherwise agreed among the Company
and the Noteholders, the repurchase of the Notes and the issuance of the
Warrants (the “Closing”) shall take place on the Closing Date at the
offices of Bingham McCutchen LLP, 150 Federal Street, Boston, Massachusetts, at
10:00 a.m., local time.  On the Closing
Date, the Noteholders shall deliver the Notes to be tendered by them to the
Company against delivery by the Company of the cash consideration therefore and
the Warrants.


 


3.                                       Conditions
Precedent to the Tender of the Notes. 
The obligation of the Noteholders to tender the Notes on the Closing
Date for the consideration described in Section 2.1 hereof is subject to
the satisfaction, prior to or on the Closing Date, of the following conditions:


 


3.1.                              Effective
Date; Issuance of Warrants.  (a) The
Effective Date shall have occurred, and (b) there shall have been delivered to
the Depository a Global Warrant to purchase the number of shares of Common
Stock as provided herein.


 


3.2.                              Opinion
of Counsel.  The Noteholders shall
have received from Bingham McCutchen LLP, counsel to the Company, a legal
opinion in a form satisfactory to the Majority Noteholders.


 


3.3.                              Corporate
Proceedings.


 


(a)                                  Each
Noteholder shall have received a certificate from the Company, dated the
Closing Date, signed by the chairman, a vice chairman, the president, any vice
president or representative director of the Company, in the form attached hereto
as Exhibit 3.3, with appropriate insertions and deletions, together
with (i) copies of the certificate of incorporation, by-laws or other
organizational documents of the Company, (ii) the resolutions of the Company
referred to in such certificate and all of the foregoing (including the
certificate of incorporation and by-laws) in form and substance reasonably
satisfactory to the Majority Noteholders and (iii) a certification that all of
the applicable conditions precedent set forth in Sections 3.3, 3.5 and 3.6
hereof shall have been satisfied as of such date.


 


(b)                                 On
the Closing Date, all corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and each other Document shall be reasonably satisfactory in form and substance
to the Noteholders, and the Noteholders shall have received all information and
copies of all certificates, documents and papers, including good standing
certificates and any other records of corporate proceedings and governmental
approvals, if any, which a Noteholder may have reasonably requested in
connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.


 


6

















 


3.4.                              Litigation.
There shall be no action, suit, proceeding or investigation (whether conducted
by any judicial or regulatory body or other person) that is pending or, to the
knowledge of the Company or any Noteholder, is threatened against the Company
or any Noteholder or (nor to the knowledge of the Company or any Noteholder
shall there be any basis therefor) which (i) questions the validity of
this Agreement or any action taken or to be taken pursuant hereto or
(ii) could result in a Material Adverse Effect.


 


3.5.                              Approvals.  The Company shall have received all
authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of all governmental and third parties, in each case
necessary for the issuance of the Warrants and for the execution and delivery
of the Documents to which it is a party (including without limitation all
authorizations, consents and approvals required of any holder of Notes other
than a Noteholder), and all of the foregoing shall be in full force and effect
on the Closing Date.


 


3.6.                              Warrant
Agreement. The Warrant Agreement, with such changes as shall be required by
the last sentence of Section 2.1. hereof, shall have been duly executed
and delivered by all of the parties thereto.


 


3.7.                              DTC
Eligibility.  The Warrants shall
have become eligible for DTC book-entry delivery services.


 


3.8.                              CUSIP
Number.  The Company shall have
obtained CUSIP Numbers for the Warrants.


 


3.9.                              Capitalization.  The Company shall deliver evidence furnished
by EquiServe Trust Company, N.A, the transfer agent and registrar for the
Common Stock,  as to the authorized and
issued and outstanding Common Stock of the Company as of the Closing Date.


 


3.10.                        Representations
and Warranties.  On the Closing Date
and after giving effect to the transaction contemplated hereby, all
representations and warranties made by the Company contained herein shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of such date, except to
the extent that such representations and warranties expressly relate to an
earlier date.


 


All of the
certificates, legal opinions and other documents and papers referred to in this
Section 3, unless otherwise specified, shall be delivered to each of the
Noteholders and shall be reasonably satisfactory in form and substance to such
Majority Noteholders.


 


4.                                       Conditions
Precedent to the Repurchase of the Notes and Issuance of the Warrants.  The obligation of the Company to repurchase
the Notes and to sell and issue the Warrants on the Closing Date is subject to
the satisfaction, prior to or on the Closing Date, of the following conditions:


 


4.1.                              Effective Date.
The Effective Date shall have occurred.


 


7

















 


4.2.                              New Financing.  The New Financing shall have occurred, and
the Company shall have received net proceeds therefrom sufficient to pay the
cash consideration required to be paid by the Company hereunder pursuant to
Section 2.1 hereof.


 


4.3.                              New Exchange. The
consummation of the transactions contemplated by the New Exchange shall have
occurred.


 


4.4.                              Litigation.  There shall be no action, suit, proceeding
or investigation (whether conducted by any judicial or regulatory body or other
person) that is pending or, to the knowledge of any Noteholder or the Company,
is threatened against any Noteholder or the Company (nor to the knowledge of
any Noteholder or the Company shall there be any basis therefor) which
questions the validity of this Agreement or any action taken or to be taken
pursuant hereto.


 


4.5.                              Approvals.  The Company shall have received all
authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of all governmental and third parties, in each case
necessary for the repurchase of the Notes and issuance of the Warrants and for
the execution and delivery of the Documents to which it is a party (including
without limitation all authorizations, consents and approvals required of any
holder of Notes other than a Noteholder), and all of the foregoing shall be in
full force and effect on the Closing Date.


 


4.6.                              Representations and
Warranties.  On the Closing Date and
after giving effect to the transaction contemplated hereby, all representations
and warranties made by any Noteholder contained herein shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of such date, except to
the extent that such representations and warranties expressly relate to an
earlier date.


 


All of the
certificates and other documents and papers referred to in this Section 4,
unless otherwise specified, shall be delivered to the Company and shall be
reasonably satisfactory in form and substance to the Company.


 


5.                                       Representations
and Warranties of the Company.  In
order to induce the Noteholders to enter into this Agreement and to acquire the
Warrants, the Company makes the following representations and warranties, all
of which shall survive the execution and delivery of this Agreement and the
acquisition of the Warrants:


 


5.1.                              Corporate
Status.  The Company and each of its
Subsidiaries (a) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization and has the
corporate power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (b)
has duly qualified to do business and is in good standing in each jurisdiction
where it is required to be so qualified and where the failure to be so
qualified is reasonably likely to have a Material Adverse Effect.


 


5.2.                              Corporate
Power and Authority.  The Company
has the corporate power and authority to execute, deliver and perform its
obligations under each of the Documents to which it


 


8

















 


is a party and
has taken all necessary corporate action to authorize the execution, delivery
and performance of the Documents to which it is a party. The Company has duly
executed and delivered to the Noteholders each Document to which it is a party
and each such Document constitutes the legal, valid and binding obligation of
such Person enforceable in accordance with its terms.


 


5.3.                              No
Violation.  Neither the execution,
delivery and performance by the Company of the Documents to which it is a party
nor compliance with the terms and provisions thereof (a) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ, injunction
or decree of any court or governmental instrumentality, except as would not
have a Material Adverse Effect, (b) will conflict or be inconsistent with or
result in any breach of, any of the material terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Company pursuant to the terms of, any indenture,
mortgage, deed of trust, agreement or other instrument to which such Person is
a party or by which it or any of its property or assets are bound or to which
it may be subject or (c) will violate any provision of the certificate of
incorporation, by-laws or other organizational document of the Company.


 


5.4.                              Capitalization.
The authorized capital stock of the Company consists of 85,000,000 shares of
Common Stock, of which 45,881,329 are issued and outstanding, and 15,000,000
shares of undesignated preferred stock, $0.001 par value per share, none of
which are issued and outstanding.  As of
the date hereof, (i)
7,762,128 shares of Common Stock were reserved for future issuance pursuant to
outstanding options issued by the Company, (ii) 4,187,789 shares of Common
Stock were reserved for future issuance pursuant to outstanding warrants issued
by the Company and (iii) 443,232 shares of Common Stock were reserved for
future issuance upon conversion of the Existing Convertible Notes.  The Warrants to be issued and sold hereunder
shall constitute 8.2% of the fully diluted equity of the Company (calculated
assuming exercise of all warrants, rights or options outstanding as of
April 26, 2004 date hereof).  Except as set forth above and for the
exercise rights of the Warrants and the conversion rights of the Existing
Convertible Notes, after giving effect to the transactions contemplated by this
Agreement, and except as set forth on Schedule 5.4, there will be
no other outstanding options, warrants, rights (including conversion or
preemptive rights) or any agreement for the purchase or acquisition from the
Company of any shares of the Company’s capital stock or voting agreements with
respect to equity of the Company.  All
shares of the capital stock of the Company subject to issuance as aforesaid,
including the Warrants, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable. 
There are no obligations, contingent or otherwise, of the Company to
repurchase, redeem or otherwise acquire any shares of Common Stock or to
provide funds to or make any investment (in the form of a loan, capital
contribution, guaranty or otherwise) in any other entity.  None of the outstanding shares of capital
stock of the Company were issued in violation of the Securities Act or any
state securities laws.


 


5.5.                              Litigation.  Except as disclosed in the SEC Reports, no
action, suit, proceeding or investigation (whether conducted by any judicial or
regulatory body or other person) is pending or, to the knowledge of the
Company, is threatened against the Company (nor


 


9

















 


to the
knowledge of the Company is any basis therefor) which (i) questions the
validity of this Agreement or any action taken or to be taken pursuant hereto
or (ii) could result in a Material Adverse Effect.


 


5.6.                              Governmental
Approvals.  Except for any required
filings and recordings which have been made and are in full force and effect,
no order, consent, approval, license, authorization or validation of, or
filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (a) the execution,
delivery and performance of any Document or (b) the legality, validity, binding
effect or enforceability of any Document.


 


5.7.                              Conformity
to Securities Act and Exchange Act; No Misstatement or Omission.  Each of the SEC Reports as of the date it
was filed with the SEC in the case of filings under the Exchange Act or
declared effective in the case of the Registration Statements, complied in all
material respects with the applicable requirements of the Securities Act or the
Exchange Act and the respective rules and regulations of the SEC thereunder and
did not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading.


 


5.8.                              Financial
Condition; Financial Statements. 
The financial statements and supporting schedules included in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2003,
and in any Registration Statements or other SEC Reports, in each case filed
with the SEC, are complete and correct in all material respects and present
fairly the consolidated financial position of the Company and its Subsidiaries
as of the dates specified and the consolidated results of their operations for
the periods specified, in each case, in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved, except as indicated therein or in the notes thereto.


 


6.                                       Noteholder
Representations.  Each Noteholder,
severally but not jointly, represents and warrants only as to itself as
follows:


 


6.1.                              Authorization;
No Contravention.  The execution,
delivery and performance by it of this Agreement: (a) is within its power and
authority and has been duly authorized by all necessary action and (b) does not
contravene the terms of its organizational documents or any amendment thereof.


 


6.2.                              Binding
Effect.  This Agreement has been
duly executed and delivered by it and this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.


 


6.3.                              No
Legal Bar.  The execution, delivery
and performance of this Agreement by it will not violate any Requirement of Law
applicable to it.


 


6.4.                              Purchase
for Own Account.  The Warrants to be
acquired by it pursuant to this Agreement are being acquired for its own
account and with no intention of distributing or


 


10

















 


reselling such
securities or any part thereof in any transaction that would violate the
securities laws of the United States of America, or any state thereof, without
prejudice, however, to its right at all times to sell or otherwise dispose of
all or any part of its Warrants, under an effective registration statement
under the Securities Act, or under an exemption from such registration
available under the Securities Act, and subject, nevertheless, to the
disposition of its property being at all times within its control.


 


6.5.                              Accredited
Investor.  Such Noteholder is an
“accredited investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act, by virtue, inter  alia, of
its being a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Warrants or
the shares of Common Stock issuable upon exercise of the Warrants, with total
assets in excess of $5,000,000.


 


6.6.                              Restricted
Securities.  Such Noteholder
understands that the Warrants acquired by it may not be sold, transferred or
otherwise disposed of without registration under the Securities Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering the Warrants or an available exemption from registration
under the Securities Act, the Warrants must be held indefinitely.  In the absence of a registration statement
covering the Warrants, such Noteholder will sell, transfer or otherwise dispose
of the Warrants only in a manner consistent with its representations and
agreements set forth herein.


 


6.7.                              Financial
Condition.  Such Noteholder’s
financial condition is such that it is able to bear the risk of holding the
Warrants acquired by it for an indefinite period of time and can bear the loss
of its entire investment in the Warrants.


 


6.8.                              Experience.  Such Noteholder has such knowledge and
experience in financial and business matters and in making high-risk
investments of the type such as the Warrants that it is capable of evaluating
the merits and risks of the acquisition of the Warrants.


 


6.9.                              Legend.  Such Noteholder understands that the
certificates evidencing the Warrants may bear a legend substantially in the
following form:


 


“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH BELOW.  BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (C) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER) AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.”


 


11

















 


6.10.                        ERISA.  No part of the funds used by it to acquire
the Warrants hereunder constitutes assets of an “employee benefit plan” (as
defined in Section 3(3) of ERISA) or “plan” (as defined in
Section 4975 of the Code).


 


6.11.                        Broker’s,
Finder’s or Similar Fees.  No
brokerage commissions, finder’s fees or similar fees or commissions are payable
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with it or any action taken by it.  Such Noteholder hereby indemnifies each
other party against and agrees that it will hold each such party harmless from
any claim, demand or liability for any such brokerage commissions, finder’s
fees or similar fees or commissions alleged to have been incurred by such
Noteholder with respect to the transactions contemplated hereby.


 


6.12.                        Governmental
Authorization; Third Party Consent. 
No approval, consent, compliance, exemption, authorization or other
action by, or notice to or filing with, any Governmental Authority or any other
Person in respect of any Requirement of Law, and no lapse of a waiting period
under a Requirement of Law, is required in connection with the execution,
delivery or performance by it of this Agreement or the transactions
contemplated hereby.


 


7.                                       Covenants.


 


7.1.                              SEC
Documents.  The Company covenants
and agrees that for so long as this Agreement is in effect, the Company will
timely file all documents required to be filed with the SEC pursuant to
Section 13 or 15 of the Exchange Act, and shall provide to the Noteholders
within one day of making any filing with the SEC copies, copies of all such
documents, including all financial statements of the Company filed with the
SEC, and all supplemental information packages given to securities analysts or
investors.


 


7.2.                              Litigation
Cooperation.  Should any suit or
proceeding be instituted by or against the Noteholders or the Warrant Agent (as
defined in the Warrant Agreement) by a third party in any manner relating to
the Company, the Company shall, without expense to the Noteholders or the
Warrant Agent, make available the Company and its officers, employees and
agents and the Company’s books and records, to the extent that the Noteholders
may deem them reasonably necessary in order to prosecute or defend any such
suit or proceeding by such third party.


 


8.                                       Term.  This Agreement shall continue in effect
indefinitely, provided that the Majority Noteholders may terminate this
Agreement on or after August 3, 2004, if no New Financing has been
consummated on or prior to such date.


 


9.                                       Amendment
to Symphony Exchange Agreement.


 


9.1.              Amendment to Section 4.3.2 of
Symphony Exchange Agreement. 
Subject to Section 9.2 hereof, Section 4.3.2 of the Symphony
Exchange Agreement is hereby amended by adding the following new paragraph to
the end of Section 4.3.2 as it currently exists:


 


12

















 


“Notwithstanding the foregoing or anything to the contrary herein,
including but not limited to Section 4.2 hereof, in the event that a
Change of Control is announced by the Company on or before October 3,
2004, upon the announcement by the Company of such Change of Control, the
Borrower shall issue to the Holders warrants, having an exercise price of $1.85
per share and such other terms that are substantially similar to the terms of
the warrants contemplated to be issued pursuant to that certain Note
Repurchase, Exchange and Termination Agreement dated as of April 27, 2004,
to purchase a number of shares of Common Stock equal to (x) the principal
amount of a Note, as the case may be, being prepaid, multiplied by (y)
0.2056033 (the “Warrants”). The Warrants shall terminate, if
unexercised, on the consummation of the Change of Control . In the event that
any of the Warrants have been exercised on or prior to the third day prior to
the effectiveness of such Change of Control, Borrower shall make an offer to
prepay all of the Notes then outstanding for consideration equal to 100% of the
outstanding principal amount of any Note, as the case may be, being prepaid
plus accrued and unpaid interest on such prepaid principal amount to the
prepayment date. In the event that none of the Warrants have been exercised on
or prior to the third day prior to the effectiveness of such Change of Control,
Borrower shall make an offer to prepay all of the Notes then outstanding for
consideration equal to the Note Prepayment Price set forth in Section 4.2.
Provision shall be made such that any such exercise may be made contingent
upon, and contemporaneous with, such Change of Control. Borrower shall provide
each Holder with ten business days prior notice of the effectiveness of such
Change of Control.”


 


9.2                 Effectiveness
of Amendment to Symphony Exchange Agreement.  Notwithstanding anything to the contrary express or implied in
this Section 9, and subject to the provisions of Section 12 hereof,
the foregoing amendment to the Symphony Exchange Agreement shall be effective
only upon the termination of this Agreement by the Majority Noteholders
pursuant to Section 8 hereof or, if earlier, immediately prior to the
consummation of a Change of Control (as defined in the Symphony Exchange
Agreement).


 


10.                                 Amendment
to JMG Agreement.


 


10.1.        Amendment to Section 4.3.3 of JMG
Exchange Agreement.  Subject to
Section 10.2 hereof, Section 4.3.3 of the JMG Exchange Agreement is
hereby amended by adding the following new paragraph to the end of
Section 4.3.3 as it currently exists:


 


“Notwithstanding the foregoing or anything to the contrary herein,
including but not limited to Section 4.2 hereof, in the event that a
Change of Control is announced by the Company on or before October 3,
2004, upon the announcement by the Company of such Change of Control, the
Borrower shall issue to the Holders warrants, having an exercise price of $1.85
per share and such other terms that are substantially similar to the terms of
the warrants contemplated to be issued pursuant to that certain Note
Repurchase, Exchange and Termination Agreement dated as of April 27, 2004,
to purchase a number of shares of Common Stock equal to (x) the principal
amount of a Note, as the case may


 


13

















 


be, being prepaid, multiplied by (y) 0.2056033 (the “Warrants”).
The Warrants shall terminate, if unexercised, on the the consummation of the
Change of Control. In the event that any of the Warrants have been exercised on
or prior to the third day prior to the effectiveness of such Change of Control,
Borrower shall make an offer to prepay all of the Notes then outstanding for
consideration equal to 100% of the outstanding principal amount of any Note, as
the case may be, being prepaid plus accrued and unpaid interest on such prepaid
principal amount to the prepayment date. In the event that none of the Warrants
have been exercised on or prior to the third day prior to the effectiveness of
such Change of Control, Borrower shall make an offer to prepay all of the Notes
then outstanding for consideration equal to the Note Prepayment Price set forth
in Section 4.2. Provision shall be made such that any such exercise may be
made contingent upon, and contemporaneous with, such Change of Control.
Borrower shall provide each Holder with ten business days prior notice of the
effectiveness of such Change of Control “


 


10.2           Effectiveness
of Amendment to JMG Exchange Agreement. 
Notwithstanding anything to the contrary express or implied in this
Section 10, and subject to the provisions of Section 11 hereof, the
foregoing amendment to the JMG Exchange Agreement shall be effective only upon
the termination of this Agreement by the Noteholders pursuant to Section 8
hereof or, if earlier, immediately prior to the consummation of a Change of
Control (as defined in the JMG Exchange Agreement).


 


11.                                 Termination
of JMG Exchange Agreement.  Pursuant
to Section 14.4 of the JMG Exchange Agreement, each of the Company and
each of the Noteholders that is party thereto hereby agree that, effective
immediately prior to consummation of the Closing, the JMG Exchange Agreement
shall automatically terminate and be of no further force and that the
respective rights and obligations of the parties thereunder shall terminate in
all respects, with no surviving obligations or liabilities thereunder accruing
to any party thereto


 


12.                                 Termination
of Symphony Exchange Agreement. 
Pursuant to Section 13.4 of the Symphony Exchange Agreement, each
of the Company and each of the Noteholders that is party thereto hereby agree
that, effective immediately prior to consummation of the Closing, the Symphony
Exchange Agreement shall automatically terminate and be of no further force and
that the respective rights and obligations of the parties thereunder shall
terminate in all respects, with no surviving obligations or liabilities
thereunder accruing to any party thereto.


 


13.                                 General.


 


13.1.        Notices.  Except as otherwise expressly provided herein, all notices,
requests, consents, and other communications under this Agreement shall be in
writing and shall be deemed delivered (a) two business days after being
sent by registered or certified mail, return receipt requested, postage prepaid
or (b) one business day after being sent via a reputable nationwide
overnight courier service guaranteeing next business day delivery, in each case
to the intended recipient as set forth below:


 


If to the Company, at 20 Second Avenue, Burlington, MA  01803, Attention:  Chief Financial Officer, or at such other address or addresses as
may have been furnished in writing by


 


14

















 


the Company to the Noteholders, with a copy to Johan V. Brigham,
Bingham McCutchen LLP, 150 Federal Street, Boston, MA  02110; and


 


If to any Noteholder, at such address or addresses as may have been
furnished to the Company in writing by the applicable Noteholder.


 


Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including personal delivery,
messenger service, facsimile, first class mail or electronic mail), but no such
notice, request, consent or other communication shall be deemed to have been
duly given unless and until it is actually received by the party for whom it is
intended.  Any party may change the
address to which notices, requests, consents or other communications hereunder
are to be delivered by giving the other parties notice in the manner set forth
in this Section 13.1.


 


13.2.                        Assignments;
Participations.  This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto.


 


13.3.                        Amendment
or Waiver.  Neither this Agreement
nor any other Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Company and the Majority Noteholders.


 


13.4.                        No
Waiver; Remedies Cumulative.  No
failure or delay on the part of any Noteholder in exercising any right, power
or privilege hereunder or under any other Document and no course of dealing
between the Company and any Noteholder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder or
thereunder.  The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies that a Noteholder would otherwise have.  No notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Noteholders to any
other or further action in any circumstances without notice or demand.


 


13.5.                        No
Strict Construction.  The parties
have participated jointly in the negotiation and drafting of this Agreement and
the other Documents with counsel sophisticated in financing transactions.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement and the other Documents shall
be construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement and the other Documents.


 


13.6.                        Interpretation;
Governing Law; etc.


 


13.6.1.               Time is (and shall be) of the essence in
this Agreement and the other Documents. 
All covenants, agreements, representations and warranties made in this


 


15

















 


Agreement or
any other Document or in certificates delivered pursuant hereto or thereto
shall be deemed to have been relied on by each Noteholder, notwithstanding any
investigation made by any such party on its behalf, and shall survive the
execution and delivery to each such party hereof and thereof.  The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, and any invalid or unenforceable provision shall be modified
so as to be enforced to the maximum extent of its validity or enforceability.
This Agreement and the other Documents constitute the entire understanding of
the parties with respect to the subject matter hereof and thereof and supersede
all prior and contemporaneous understandings and agreements, whether written or
oral.


 


13.6.2.               This Agreement, and any issue, claim or
proceeding arising out of, or relating to, this Agreement or any other Document
or the conduct of the parties hereto, whether now existing or hereafter arising
and whether in contract, tort or otherwise, shall be governed by, and shall be
construed and enforced in accordance with, the laws of The Commonwealth of
Massachusetts, without regard to the principles of conflicts of laws.  Any legal action or proceeding with respect
to this Agreement or any other Document may be brought in any state or federal
court sitting in the Commonwealth of Massachusetts, and, by execution and
delivery of this Agreement and the other Documents, as applicable, the Company
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts for such
action or proceeding.  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
for notices pursuant to Section 13.1 hereof, such service to become
effective 15 days after such mailing. Nothing herein shall affect the right of
any Noteholder to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Company in any
other jurisdiction.


 


13.6.3.               The Company irrevocably waives any
objection which it may now or hereafter have to the venue of any of the
aforesaid actions or proceedings arising out of, or in connection with, this
Agreement or any other Document brought in the courts referred to in
Section 13.6.2 above and further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.


 


13.6.4.               Each of the parties to this Agreement
waives to the extent not prohibited by applicable law that cannot be waived any
right it may have to claim or recover in any legal action or proceeding any
special, exemplary, punitive or consequential damages.


 


13.7.                        Waiver
of Jury Trial.  TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH OF THE PARTIES HERETO
WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT
OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER DOCUMENT OR THE
SUBJECT MATTER HEREOF OR THEREOF OR ANY OBLIGATION OR IN ANY WAY CONNECTED WITH
THE DEALINGS OF THE NOTEHOLDERS OR THE COMPANY IN CONNECTION WITH ANY


 


16

















 


OF THE ABOVE,
IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT,
TORT OR OTHERWISE.  The Company
acknowledges that it has been informed by the Noteholders that the foregoing
sentence constitutes a material inducement upon which each of the Noteholders
has relied and will rely in entering into this Agreement and any other
Document.  Any party hereto may file an
original counterpart or a copy of this Agreement with any court as written
evidence of the consent of each of the parties hereto to the waiver of their
rights to trial by jury.


 


13.8.                        Entire
Agreement.                                                The
Agreement contains the entire understanding of the parties hereto with respect
to the subject matter hereof.  All
express or implied agreements and understandings, either oral or written,
heretofore made are expressly merged in and made a part of this Agreement.


 


13.9.                        Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.  A set of counterparts executed by all the
parties hereto shall be lodged with the Company and each Noteholder.


 


13.10.                  Execution.  This Agreement shall become effective on the
date (the “Effective Date”) on which each of the Company and the
Noteholders shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to one another.


 


13.11.                  Headings
Descriptive.  The headings of the
several sections and subsections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Agreement.


 


[Signature pages follow]


 


17

















 


Each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.


 


	
  THE COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
  iBASIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Ofer Gneezy

  	
   

  
	
   

  	
   

  	
  Name:  Ofer Gneezy

  
	
   

  	
   

  	
  Title:  President and CEO

  
	
   

  	
   

  
	
  THE NOTEHOLDERS:

  	
   

  
	
   

  	
   

  
	
   

  	
  RHAPSODY FUND, LP

  
	
   

  	
   

  
	
   

  	
  By Symphony Asset
  Management LLC, as General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer and GP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ARPEGGIO FUND

  
	
   

  	
   

  
	
   

  	
  By Symphony Asset
  Management LLC, as

  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL
  MONETARY FUND -

  CONVERTIBLE ARBITRAGE ACCOUNT

  
	
   

  	
   

  
	
   

  	
  By Symphony Asset
  Management LLC, as

  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer

  



 

















 


	
   

  	
  CSV LIMITED

  
	
   

  	
  By Symphony Asset
  Management LLC, as

  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANDANTE FUND, LP

  
	
   

  	
   

  
	
   

  	
  By Symphony Asset
  Management LLC, as General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer and GP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VIVACE FUND, LP

  
	
   

  	
   

  
	
   

  	
  By Symphony Asset
  Management LLC, as General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer and GP

  



 

















 


	
   

  	
  ADAGIO FUND

  
	
   

  	
   

  
	
   

  	
  By Symphony Asset
  Management LLC, as

  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Neil Rudolph

  	
   

  
	
   

  	
   

  	
  Name:  Neil Rudolph

  
	
   

  	
   

  	
  Title:  Chief Operating
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JMG TRITON OFFSHORE
  FUND LIMITED CITCO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Jonathan Glaser

  	
   

  
	
   

  	
   

  	
  Name:  Jonathan Glaser

  
	
   

  	
   

  	
  Title:  managing Member of the
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WINDWARD CAPITAL
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Kim S. Morris

  	
   

  
	
   

  	
   

  	
  Name:  Kim Morris

  
	
   

  	
   

  	
  Title:  Portfolio Manager

  



 

















 


Schedule 1


 


NOTEHOLDERS


 


	
  Noteholder

  	
   

  	
  Principal
  Amount of Note to

  be Retired

  	
   

  	
  Warrant
  Shares

  	
   

  
	
  Rhapsody Fund, LP

  	
   

  	
  $

  	
  6,525,000

  	
   

  	
  1,341,562

  	
   

  
	
  Arpeggio Fund

  	
   

  	
  $

  	
  5,875,000

  	
   

  	
  1,207,920

  	
   

  
	
  International Arbitrary Fund – Convertible
  Arbitrage Account

  	
   

  	
  $

  	
  500,000

  	
   

  	
  102,802

  	
   

  
	
  CSV Limited

  	
   

  	
  $

  	
  450,000

  	
   

  	
  92,522

  	
   

  
	
  Andante Fund, LP

  	
   

  	
  $

  	
  850,000

  	
   

  	
  174,763

  	
   

  
	
  Vivace Fund, LP

  	
   

  	
  $

  	
  750,000

  	
   

  	
  154,202

  	
   

  
	
  Adagio Fund

  	
   

  	
  $

  	
  150,000

  	
   

  	
  30,840

  	
   

  
	
  JMG Triton Offshore Fund Limited CITCO

  	
   

  	
  $

  	
  3,975,000

  	
   

  	
  817,273

  	
   

  
	
  Windward Capital LLC

  	
   

  	
  $

  	
  6,100,000

  	
   

  	
  1,254,181

  	
   

  
	
     TOTAL:

  	
   

  	
  $

  	
  25,175,000.00

  	
   

  	
  5,176,065

  	
   

  



 

















 


Schedule 5.4


 


CAPITALIZATION


 


	
   

  	
   

  	
  Number of
  Common Shares

  	
   

  
	
  As of April 26, 2004

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Issued and outstanding

  	
   

  	
  45,881,329

  	
   

  
	
  Outstanding (unexercised) stock options

  	
   

  	
  6,297,914

  	
   

  
	
  Available for future grant under stock
  option plan

  	
   

  	
  1,464,214

  	
   

  
	
  Underlying outstanding warrants

  	
   

  	
  4,187,789

  	
   

  
	
  Issuable upon conversion of 5 3⁄4% Convertible
  Subordinated Notes

  	
   

  	
  443,232

  	
   

  
	
  Total shares on a fully diluted basis

  	
   

  	
  58,274,478

  	
   

  



 

















 


EXHIBIT A


 


FORM OF WARRANT AGREEMENT


 


 


iBASIS,
INC.


 


and


 


U.S.
BANK NATIONAL ASSOCIATION,


 


as


 


Warrant
Agent


 












 


2004
WARRANT AND REGISTRATION RIGHTS AGREEMENT


 


Dated
as of           , 2004


 

















 


WARRANT AND REGISTRATION RIGHTS AGREEMENT


 


TABLE OF CONTENTS


 


	
  Section 1.

  	
  Appointment of Warrant Agent

  	
   

  
	
  Section 2.

  	
  Warrant Certificates; Warrant Shares

  	
   

  
	
  Section 3.

  	
  Execution of Warrant Certificates and
  Warrant Share Certificates

  	
   

  
	
  Section 4.

  	
  Registration and Countersignature

  	
   

  
	
  Section 5.

  	
  Transfer and Exchange of Warrants

  	
   

  
	
  Section 6.

  	
  Registration of Transfers and Exchanges.

  	
   

  
	
   

  	
  6.1.

  	
  Transfer and Exchange of Physical Warrants

  	
   

  
	
   

  	
  6.2.

  	
  Restrictions on Transfer of Physical
  Warrants for a Beneficial Interest in a Global Warrant

  	
   

  
	
   

  	
  6.3.

  	
  Transfer and Exchange of Global Warrants

  	
   

  
	
   

  	
  6.4.

  	
  Transfer of a Beneficial Interest in a
  Global Warrant for a Physical Warrant.

  	
   

  
	
   

  	
  6.5.

  	
  Restrictions on Transfer and Exchange of
  Global Warrants

  	
   

  
	
   

  	
  6.6.

  	
  Authentication of Definitive Warrants in
  Absence of Depository

  	
   

  
	
   

  	
  6.7.

  	
  Legends

  	
   

  
	
   

  	
  6.8.

  	
  Cancellation and/or Adjustment of a Global
  Warrant

  	
   

  
	
  Section 7.

  	
  Issuance of Warrants; Terms of Warrants:
  Exercise of Warrants.

  	
   

  
	
   

  	
  7.1.

  	
  Method of Exercise; Payment, Issuance of New Warrant; Transfer and
  Exchange.

  	
   

  
	
   

  	
  7.2.

  	
  Warrantholder Representations

  	
   

  
	
   

  	
  7.3.

  	
  Stock
  Fully Paid; Reservation of Shares

  	
   

  
	
   

  	
  7.4.

  	
  Adjustment of Exercise Price and Number of Shares.

  	
   

  
	
   

  	
  7.5.

  	
  Adjustments for Consolidation, Merger, Sale of Assets,
  Reorganization, etc

  	
   

  
	
   

  	
  7.6.

  	
  Notice of Adjustments

  	
   

  
	
   

  	
  7.7.

  	
  No Rights or Liabilities as Stockholder

  	
   

  
	
  Section 8.

  	
  Registration Rights

  	
   

  
	
   

  	
  8.1.

  	
  Demand Registration Rights.

  	
   

  
	
   

  	
  8.2.

  	
  Piggyback Registration Rights.

  	
   

  
	
   

  	
  8.3.

  	
  Certain
  Other Provisions.

  	
   

  
	
   

  	
  8.4.

  	
  Indemnification and Contribution.

  	
   

  
	
   

  	
  8.5.

  	
  Reports Under Exchange Act

  	
   

  
	
  Section 9.

  	
  Definitions

  	
   

  
	
  Section 10.

  	
  Payment of Taxes

  	
   

  
	
  Section 11.

  	
  Mutilated or Missing Warrant Certificates
  and Warrant Share Certificates

  	
   

  
	
  Section 12.

  	
  Fractional Interests.

  	
   

  
	
  Section 13.

  	
  Merger, Consolidation or Change of Name of Warrant Agent

  	
   

  
	
  Section 14.

  	
  Warrant Agent

  	
   

  
	
  Section 15.

  	
  Change of Warrant Agent

  	
   

  
	
  Section 16.

  	
  Notices to Company and Warrant Agent

  	
   

  
	
  Section 17.

  	
  Supplements and Amendments

  	
   

  
	
  Section 18.

  	
  Successors

  	
   

  
	
  Section 19.

  	
  Survival of Registration Rights Provisions,
  Warrant Agent Provisions

  	
   

  
					



 

















 


	
  Section 20.

  	
  Governing Law; Submission to Jurisdiction:
  Waiver of Jury Trial

  	
   

  
	
  Section 21.

  	
  Exercise of Rights and Remedies

  	
   

  
	
  Section 22.

  	
  Benefits of This Agreement

  	
   

  
	
  Section 23.

  	
  Counterparts

  	
   

  



 

















 


2004 WARRANT
AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as
of             ,
2004, between iBasis, Inc., a Delaware (the “Company”), and U.S. Bank
National Association, as Warrant Agent (the “Warrant Agent”).


 


WHEREAS, the
Company proposes to issue Warrants, as hereinafter described (the “Warrants”),
which in the aggregate initially entitle the holders of the Warrants to
purchase, at an Initial Exercise Price of $1.85 per share, 5,176,065 shares of
Common Stock, par value $0.001 per share, of the Company (the Common Stock
issuable on exercise of any Warrant being referred to herein as the “Warrant
Shares”), in connection with the execution of that certain Note Repurchase,
Exchange and Amendment Agreement (as amended, supplemented and otherwise
modified from time to time, the “Exchange Agreement”), dated as of April
27, 2004, by and among the Company and the Required Holders named therein.


 


WHEREAS, upon
exercise of any Warrants, the Warrantholder shall own Warrant Shares, which
shall continue to be subject to the terms of this Agreement.


 


WHEREAS, the
Warrant Shares shall have certain registration rights as provided herein.


 


WHEREAS, the
Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing so to act, in connection with the issuance, transfer,
exchange and exercise of Warrants, and the issue, transfer and exchange of the
Warrant Shares, and other matters as provided herein.


 


NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set forth, the parties hereto agree as follows:


 


Section 1. 
Appointment of Warrant Agent. 
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth hereinafter in this Agreement,
and the Warrant Agent hereby accepts such appointment.


 


Section 2. 
Warrant Certificates; Warrant Shares.  The certificates evidencing the Warrants (the “Warrant
Certificates”) to be delivered pursuant to this Agreement shall be in fully
registered form only and shall initially be represented by one or more global
warrants (each, a “Global Warrant”), substantially in the form of Exhibit
A attached hereto, registered in the name of The Depository Trust Company
(the “Depository”) or its nominee and delivered to the Warrant Agent, as
custodian for the Depository and recorded in the book-entry system maintained
by the Depository.  Upon written
request, a beneficial owner of an interest in a Global Warrant will be entitled
to receive a physical certificate representing such interest (a “Physical
Warrant”), as provided in Section 6 hereof.  Each Global Warrant shall represent such of the outstanding
Warrants as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Warrants from time to time
endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate.  Any endorsement of a
Global Warrant to reflect the amount of any increase or decrease in the amount
of Warrant Shares represented thereby shall be made by the Warrant Agent and
the Depository in accordance with instructions given by the holder
thereof.  The certificates evidencing
the Warrant Shares to be delivered upon exercise of a


 

















 


Warrant (the “Warrant Share Certificates”)
shall be substantially in the form of the specimen certificate attached hereto
as Exhibit B.


 


Section 3. 
Execution of Warrant Certificates and Warrant Share Certificates.  Warrant Certificates shall be signed on
behalf of the Company by its President or a Vice President and by its Secretary
or an Assistant Secretary. Each such signature upon the Warrant Certificates
may be in the form of a facsimile signature of the present or any future President,
Vice President, Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that purpose the
Company may adopt and use the facsimile signature of any person who shall have
been President, Vice President, Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Warrant Certificates shall be
countersigned and delivered or disposed of he or she shall have ceased to hold
such office.


 


In case any
officer of the Company who shall have signed any of the Warrant Certificates
shall cease to be such officer before the Warrant Certificates so signed shall
have been countersigned by the Warrant Agent, or disposed of by the Company,
such Warrant Certificates nevertheless may be countersigned and delivered or
disposed of as though such person had not ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Company to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any such person
was not such officer.


 


Warrant
Certificates shall be dated the date of countersignature by the Warrant Agent.


 


The Warrant
Share Certificates shall be executed in accordance with the by-laws of the
Company.


 


Section 4. 
Registration and Countersignature.  The Warrants shall be numbered and shall be registered on the
books of the Company maintained at the principal office of the Warrant Agent in
Boston, Massachusetts (the “Warrant Register”) as they are issued.


 


Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The Warrant
Agent shall, upon written instructions of the President, a Vice President, the
Treasurer or the Chief Financial Officer of the Company, initially countersign,
issue and deliver such number of Warrants as are set forth in such written
instructions, and the Warrant Agent shall be fully protected in conclusively
relying on such written instructions. 
Such written instructions shall not instruct the Warrant Agent to
countersign Warrants entitling the holders thereof to purchase more than the
number of Warrant Shares referred to above in the first recital hereof.  The Warrant Agent shall also countersign and
deliver Warrants as otherwise provided in this Agreement. 

The Company
and the Warrant Agent may deem and treat the registered holder(s) of the
Warrant Certificates and the Warrant Shares as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.


 


Section 5. 
Transfer and Exchange of Warrants.  The Warrant Agent shall from time to time, subject to the
limitations set forth in Section 6 hereof, register the transfer of any


 


2

















 


outstanding Warrants upon the records to be
maintained by it for that purpose, upon surrender thereof duly endorsed or
accompanied (if so required by it) by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly executed by the
registered Warrantholder or Warrantholders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney.  Subject to the terms of this Agreement, each
Warrant Certificate may be exchanged for another certificate or certificates
entitling the Warrantholder thereof to purchase a like aggregate number of
Warrant Shares as the certificate or certificates surrendered then entitle such
Warrantholder to purchase.  Any
Warrantholder desiring to exchange a Warrant Certificate or Warrant
Certificates shall make such request in writing delivered to the Warrant Agent,
and shall surrender, duly endorsed or accompanied (if so required by the
Warrant Agent) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, the Warrant Certificate or Warrant
Certificates to be so exchanged.


 


Upon
registration of transfer, the Warrant Agent shall countersign and deliver by
certified mail a new Warrant Certificate or Warrant Certificates to the Persons
entitled thereto. The Warrant Certificates may be exchanged at the option of
the Warrantholder thereof, when surrendered at the office or agency of the
Company maintained for such purpose, which initially will be the corporate
trust office of the Warrant Agent in Boston, Massachusetts for another Warrant
Certificate, or other Warrant Certificates of different denominations, of like
tenor and representing in the aggregate the right to purchase a like number of
Warrant Shares.


 


No service
charge shall be made for any exchange or registration of transfer of Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that is imposed in
connection with any such exchange or registration of transfer.


 


Section 6. 
Registration of Transfers and Exchanges.


 


6.1.  Transfer and Exchange of Physical Warrants.  When Physical Warrants are presented to the
Warrant Agent with a request:


 


(i)                                  to
register the transfer of the Physical Warrants; or


 


(ii)                               to
exchange such Physical Warrants for an equal number of Physical Warrants of
other authorized denominations,


 


the Warrant
Agent shall register the transfer or make the exchange as requested if the
requirements under this Agreement as set forth in this Section 6 for such
transactions are met; provided, however, that the Physical
Warrants presented or surrendered for registration of transfer or exchange:


 


(1)                                  shall
be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Warrant Agent, duly executed by the Warrantholder thereof
or his attorney duly authorized in writing; and


 


(2)                                  in
the case of Physical Warrants the offer and sale of which have not been
registered under the Securities Act, such Physical Warrants shall be accompanied,


 


3

















 


in the sole
discretion of the Company, by the following additional information and
documents, as applicable:


 


(A)                              if
such Physical Warrants are being delivered to the Warrant Agent by a holder for
registration in the name of such holder, without transfer, a certification from
such holder to that effect (in substantially the form of Exhibit C
attached hereto); or


 


(B)                                if
such Physical Warrants are being transferred to a “qualified institutional buyer”
(as defined in Rule 144A under the Securities Act (a “Qualified
Institutional Buyer”)) in accordance with Rule 144A under the Securities
Act., a certification to that effect (in substantially the form of Exhibit C
attached hereto).


 


6.2.  Restrictions on Transfer of
Physical Warrants for a Beneficial Interest in a Global Warrant.  A Physical Warrant may not be exchanged for
a beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Physical
Warrant, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Warrant Agent, together with:


 


(A)                              a
certification, in substantially the form of Exhibit C attached hereto,
that such Physical Warrant is being transferred to a Qualified Institutional
Buyer; and


 


(B)                                written
instructions directing the Warrant Agent to make, or to direct the Depository
to make, an endorsement on the Global Warrant to reflect an increase in the
aggregate amount of the Warrants represented by the Global Warrant,


 


then the
Warrant Agent shall cancel such Physical Warrant and cause, or direct the
Depository to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be increased accordingly.  If no Global Warrant is then outstanding,
the Company shall issue and the Warrant Agent shall upon written instructions
from the Company authenticate a new Global Warrant in the appropriate amount.


 


6.3.  Transfer and Exchange of Global
Warrants.  The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depository, in accordance with this Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefore.


 


6.4.  Transfer of a Beneficial Interest in
a Global Warrant for a Physical Warrant.


 


6.4.1.  Any Person having a
beneficial interest in a Global Warrant may upon request exchange such
beneficial interest for a Physical Warrant. Upon receipt by the Warrant Agent
of written instructions or such other form of instructions as is customary for
the Depository from the Depository or its nominee


 


4

















 


on behalf of
any person having a beneficial interest in a Global Warrant and upon receipt by
the Warrant Agent of a written order or such other form of instructions as is
customary for the Depository or the person designated by the Depository as
having such a beneficial interest containing registration instructions and, in
the case of any such transfer or exchange of a beneficial interest in a Global
Warrant the offer and sale of which have not been registered under the
Securities Act, the following additional information and documents:


 


(A)                              if
such beneficial interest is being transferred to the Person designated by the
Depository as being the beneficial owner, a certification from such person to
that effect (in substantially the form of Exhibit C attached hereto); or


 


(B)                                if
such beneficial interest is being transferred to a Qualified Institutional
Buyer in accordance with Rule 144A under the Securities Act, a certification to
that effect (in substantially the form of Exhibit C attached hereto),


 


then the
Warrant Agent will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Warrant Agent, the aggregate
amount of the Global Warrant to be reduced and, following such reduction, the
Company will execute and, upon receipt of an authentication order in the form
of an officers’ certificate, the Warrant Agent will authenticate and deliver to
the transferee a Physical Warrant.


 


6.4.2.  Physical Warrants issued
in exchange for a beneficial interest in a Global Warrant pursuant to this
Section 6.4 shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Warrant Agent in
writing. The Warrant Agent shall deliver such Physical Warrants to the Persons
in whose names such Physical Warrants are so registered.


 


6.5.  Restrictions on Transfer and
Exchange of Global Warrants. 
Notwithstanding any other provisions of this Agreement, a Global Warrant
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such successor Depository.


 


6.6.  Authentication of Definitive
Warrants in Absence of Depository.  If at any time the Depository for the Warrants notifies the
Company that the Depository is unwilling or unable to continue as Depository
for the Global Warrants and a successor Depository for the Global Warrants
cannot be appointed by the Company within 90 days after delivery of such
notice, then the Company will execute, and the Warrant Agent, upon written
instructions from the Company requesting the authentication and delivery of
Physical Warrants as a result of the inability to retain a successor
Depository, will


 


5

















 


authenticate
and deliver Physical Warrants, in an aggregate number equal to the aggregate
number of Warrants represented by the Global Warrants, in exchange for such
holder’s beneficial interest in Global Warrants.


 


6.7.  Legends.  For so long as transfer of a Warrant is not
permitted without registration under the Securities Act, each Warrant
Certificate evidencing such Warrant (and all Warrants issued in exchange
therefor or substitution thereof) shall bear a legend substantially to the
following effect:


 


“THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW.  BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT
WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER) AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.”


 


6.8.  Cancellation and/or Adjustment of a
Global Warrant.  At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Physical Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent.  At any time prior to such cancellation, if
any beneficial interest in a Global Warrant is exchanged for Physical Warrants,
redeemed, repurchased or cancelled, the number of Warrants represented by such
Global Warrant shall be reduced and an endorsement shall be made on such Global
Warrant, by the Warrant Agent to reflect such reduction.


 


6.8.1.  Obligations with
Respect to Transfers and Exchanges of Physical Warrants.


 


(i)                                     To
permit registrations of transfers and exchanges, the Company shall execute, at
the Warrant Agent’s request, and the Warrant Agent shall authenticate, Physical
Warrants and Global Warrants.


 


6

















 


(ii)                                  All
Physical Warrants and Global Warrants issued upon any registration, transfer or
exchange of Physical Warrants or Global Warrants shall be the valid obligations
of the Company, entitled to the same benefits under this Agreement as the
Physical Warrants or Global Warrants surrendered upon the registration of
transfer or exchange.


 


(iii)                               Prior to due presentment
for registration of transfer of any Warrant, the Warrant Agent and the Company
may deem and treat the person in whose name any Warrant is registered as the
absolute owner of such Warrant, and neither the Warrant Agent nor the Company
shall be affected by notice to the contrary.


 


Section 7. 
Issuance of Warrants; Terms of Warrants: Exercise of Warrants.


 


7.1.  Method
of Exercise; Payment, Issuance of New Warrant; Transfer and Exchange.


 


7.1.1.  Method of Exercise.


 


7.1.1.1.  Cash Exercise.  Subject to the terms of this Agreement, each
Warrantholder shall have the right to exercise the Warrants evidenced by the
Warrant Certificates it holds, in whole or in part, during normal business
hours on any Business Day on or prior to the Expiration Date, by surrender of
the Warrant Certificates held by it to the Company at its principal office,
accompanied by a subscription substantially in the form attached to the Warrant
Certificates duly executed by such holder and accompanied by (a) wire transfer
of immediately available funds or (b) certified or official bank check payable
to the order of the Company, in each case in the amount obtained by multiplying
(i) the number of shares of Common Stock (without giving effect to any
adjustment thereof pursuant to the provisions of hereof) for which the Warrant
is then being exercised, as designated in such subscription, by (ii) the
Initial Exercise Price.  Thereupon, such
holder shall be entitled to receive the number of duly authorized, validly
issued, fully paid and nonassessable Warrant Shares (or Other Securities) determined
as provided in Sections 7.4 and 7.5 hereof.


 


7.1.1.2.  Conversion.  Subject to the terms of this Agreement, each
Warrantholder shall have the right to convert the Warrants evidenced by the
Warrant Certificates it holds, in whole or in part, into Warrant Shares (or
Other Securities), during normal business hours on any Business Day on or prior
to the Expiration Date, by surrender of the Warrant Certificates held by it to
the Company at its principal office, accompanied by a conversion notice
substantially in the form attached to the Warrant Certificates duly executed by
such holder. Thereupon, such holder shall be


 


7

















 


entitled to
receive a number of duly authorized, validly issued, fully paid and
nonassessable Warrant Shares (or Other Securities) equal to:


 


(a)           the excess of


 


(i) (x) the number of Warrant Shares (or
Other Securities) determined as provided in Sections 7.4 and 7.5 hereof which
such holder would be entitled to receive upon exercise of such Warrant for the
number of Warrant Shares designated in such conversion notice (without giving
effect to any adjustment thereof pursuant to the provisions hereof) for which
the Warrant is then being exercised, as designated in such conversion notice, multiplied
by (y) the Current Market Price of each such Warrant Share (or such
Other Securities) so receivable upon such exercise


 


over


 


(ii) (x) the number of Warrant Shares
(without giving effect to any adjustment thereof pursuant to the provisions
hereof) which such holder would be entitled to receive upon exercise of such
Warrant for the number of Warrant Shares designated in such conversion notice
(without giving effect to any adjustment thereof pursuant to the provisions
hereof), multiplied
by (y) the Initial Exercise Price


 


divided by


 


(b)           such Current Market
Price of each such Warrant Share (or Other Securities).


 


7.1.2.  When Exercise
Effective.  Each exercise of a
Warrant shall be deemed to have been effected immediately prior to the close of
business on the Business Day on which such Warrant shall have been surrendered
to the Company at the office of the Warrant Agent and payment made as provided
in Section 7.1.1 hereof, and at such time the Person or Persons in whose name
or names any certificate or certificates for Warrant Shares (or Other Securities)
shall be issuable upon such exercise as provided in Section 7.1.3 hereof shall
be deemed to have become the holder or holders of record thereof.


 


7.1.3.  Delivery of Stock
Certificates, etc.  As soon as
practicable, but no later than five Business Days after each exercise of a
Warrant, in whole or in part, except as otherwise provided in Section 7.1.4
hereof, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the holder thereof or, subject to the provisions of the Exchange Agreement, as
such holder (upon payment by such holder of any applicable transfer taxes and
subject to Section 6 above) may direct:


 


8

















 


(a)           a certificate or
certificates for the number of duly authorized, validly issued, fully paid and
nonassessable Warrant Shares (or Other Securities) to which such holder shall
be entitled upon such exercise plus, in lieu of any fractional share to which
such holder would otherwise be entitled, cash in an amount equal to the same
fraction of the Current Market Price per share on the Business Day immediately
preceding the date of such exercise; and


 


(b)           in case such
exercise is in part only, a new Warrant or Warrants of like tenor, dated the
date hereof and calling in the aggregate on the face or faces thereof for the
number of Warrant Shares equal (without giving effect to any adjustment thereof
pursuant to the terms hereof) to the number of such shares called for on the
face of such Warrant minus the number of such shares designated by the holder
upon such exercise as provided in Section 7.1.1 hereof.


 


7.1.4.  Company to Reaffirm
Obligations.  The Company will, at
the time of or at any time after each exercise of a Warrant, upon the request
of the holder hereof, acknowledge in writing its continuing obligation to
afford to such holder all rights to which such holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant Agreement
and the Warrants; provided that if any such holder shall fail to make any such
request, the failure shall not affect the continuing obligation of the Company
to afford such rights to such holder.


 


7.2.  Warrantholder Representations.  Prior to the exercise of any Warrant, the
Warrantholder must represent and warrant to the Company, in writing, as
follows:


 


(i)                                      it
is acquiring the Warrant Shares for its own account for investment and not with
a view to, or for sale in connection with, any distribution thereof, nor with
any present intention of distributing or selling the same; and the
Warrantholder has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof;


 


(ii)                                   the
Warrantholder is an “accredited investor” as defined in Rule 501(a) under the
Securities Act; and


 


(iii)                                the
Warrantholder has made such inquiry concerning the Company and its business and
personnel as it has deemed appropriate; and the Warrantholder has sufficient
knowledge and experience in finance and business that is capable of evaluating
the risks and merits of investment in the Company.


 


7.3.  Stock
Fully Paid; Reservation of Shares.  The Company represents, warrants, covenants and agrees that all
Warrant Shares which may be issued upon the exercise of the rights represented
by the Warrants will, upon issuance and payment therefor in


 


9

















 


accordance
with the terms of the Warrant, be duly authorized, validly issued, fully paid
and non-assessable.  The Company further
covenants and agrees that during the period within which the rights represented
by the Warrants may be exercised, the Company will at all times have authorized
and reserved solely for the purpose of the issuance upon exercise of the
Warrants a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by the Warrants.


 


The Company will (a) not increase the par value of any shares of Common
Stock receivable upon the exercise of any Warrant above the amount payable
therefor upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable Warrant
Shares upon the exercise of each Warrant, and (c) use its reasonable efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Agreement and each Warrant.  Without limiting the generality of the
foregoing, the Company will from time to time take all such action as may be
required to assure that the par value per share, if any, of the Common Stock is
at all times equal to or less than the lowest quotient obtained by dividing the
then current exercise price of each Warrant by the number of Warrant Shares
into which such Warrant can from time to time be exercised.


 


7.4.  Adjustment of Exercise Price and Number
of Shares.


 


7.4.1.  General; Number of
Shares; Exercise Price.  The number
of Warrant Shares which the holder of a Warrant shall be entitled to receive
upon each exercise thereof shall be determined by multiplying the number of
shares of Common Stock which would otherwise (but for the provisions of this
Section 7.4) be issuable upon such exercise, as designated by the holder hereof
pursuant to Section 7.1.1 hereof, by a fraction of which (a) the numerator is
the Initial Exercise Price of such Warrant and (b) the denominator is the
Exercise Price of such Warrant in effect on the date of such exercise.  The “Exercise Price” shall initially
be the Initial Exercise Price, and shall be adjusted and readjusted from time
to time as provided in this Section 7.4 and, as so adjusted or readjusted,
shall remain in effect until a further adjustment or readjustment thereof is
required by this Section 7.4.


 


7.4.2.  Issuance of
Additional Warrants due to Issuance of Additional Common Shares.  In case the Company at any time or from time
to time after the date of the final closing of the New Exchange (as defined in
the Exchange Agreement) shall issue or sell Additional Common Shares (including
Additional Common Shares deemed to be issued pursuant to Section 7.4.4 or 7.4.5
hereof), other than an Excluded Issuance, without consideration or for a
consideration per share less than the lower of the Initial Exercise Price or
the then Fair Market Value, then in each such case such Exercise Price shall be
reduced (but not increased), concurrently with such issue or sale, to a price
(calculated to the nearest 0.000001 of a cent) determined by multiplying the
Exercise Price in effect immediately prior to such issue or sale (the “Antidilution
Price”) by a fraction:


 


10

















 


(a)           the numerator of
which shall be the sum of (i) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied
by the Antidilution Price plus
(ii) the consideration, if any, deemed received by the Company upon such issue
or sale; and


 


(b)           the denominator of
which shall be the product of (i) the total number of shares of Common Stock
deemed to be outstanding immediately after such issue or sale multiplied by (ii) the Antidilution Price.


 


In each case, the number of shares of Common Stock shall be calculated
in accordance with Section 7.4.8 hereof.


 


7.4.3.  Dividends and
Distributions.  In case the Company
at any time or from time to time after the date hereof shall declare, order,
pay or make a dividend or other distribution (including without limitation any
distribution of additional stock or other securities or property or Options, by
way of dividend or spin-off, distribution, reclassification, recapitalization
or similar corporate rearrangement or otherwise) on the shares of Common Stock,
other than a dividend payable in (or otherwise deemed to be an issuance
of) Additional Common Shares or periodic cash dividends declared and paid
in the ordinary course of business, then, and in each such case, the holder of
a Warrant shall receive, upon the exercise of such Warrant at any time on or
after such record date, the number of Warrant Shares to be received upon
exercise of such Warrant determined as provided herein and, in addition and
without further payment, and without any additional action required on the part
of such holder, such dividend or other distribution to which such holder would
have been entitled by way of such dividend or other distribution and subsequent
dividends and other distributions through the date of exercise as if such
holder (x) had exercised such Warrant immediately prior to such record date and
(y) had retained such dividend or other distribution in respect of the shares
of Common Stock and all subsequent dividends and other distributions of any
nature whatsoever in respect of any stock or securities paid as dividends and
other distributions and originating directly or indirectly from such shares of
Common Stock.


 


7.4.4.  Treatment of Options
and Convertible Securities.  In case
the Company at any time or from time to time after the date hereof shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, then, and in each such case, the maximum number of
Additional Common Shares (as set forth in the instrument relating thereto,
without regard to any provisions contained therein for a subsequent adjustment
of such number the purpose of which is to protect against dilution) at any time
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 Common Shares issued as of the
time of such issue, sale, grant or assumption or, in case such a record date
shall have been fixed, as of the close of


 


11

















 


business on
such record date.  Notwithstanding the
foregoing, this Section 7.4.4 shall not apply to (i.e., there shall not be a
deemed issuance of Additional Common Shares with respect to) the issuance,
sale, grant or assumption of, or fixing of a record date for determination of
entitlement to receive, an Excluded Issuance. 
In addition:


 


(a)           no further
adjustment of the Exercise Price shall be made upon the exercise of any Options
or the conversion or exchange of Convertible Securities and the consequent
issue or sale of Convertible Securities or shares of Common Stock;


 


(b)           if Options or
Convertible Securities by their terms provide, with the passage of time or
otherwise, for any increase in the consideration payable to the Company, or
decrease in the number of Common Shares issuable, upon the exercise, conversion
or exchange thereof (by change of rate or otherwise), the Exercise Prices
computed upon the original issue, sale, grant or assumption thereof (or upon
the occurrence of the record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, 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, which are outstanding at such time;


 


(c)           if the consideration
provided for in any Option or the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Security shall be reduced,
or the ratio at which any Option is exercisable or any Convertible Security is
convertible into or exchangeable for shares of Common Stock shall be increased,
at any time under or by reason of provisions with respect thereto designed to
protect against dilution, then, effective concurrently with each such change, the
Exercise Price then in effect shall first be adjusted to eliminate the previous
effects (if any) of the issuance (or deemed issuance) of such Option or
Convertible Security on the Exercise Price and then readjusted as if such
Option or Convertible Security had been issued on the date of such change with
the terms in effect after such change; and


 


(d)           upon the expiration
(or purchase by the Company and cancellation or retirement) of any Options
which shall not have been exercised, or the expiration of any rights of
conversion or exchange under any Convertible Securities which (or purchase by
the Company and cancellation or retirement of any Convertible Securities the
rights of conversion or exchange under which) shall not have been exercised,
the Exercise Price computed upon the original issue, sale, grant or assumption
thereof (or upon the occurrence of the record date with respect thereto), and
any subsequent adjustments based thereon, shall, upon (and effective as of)
such expiration (or such cancellation or retirement, as the case may be), be
recomputed as if:


 


12

















 


(i)            in the case of
Options or Convertible Securities, the only Additional Common Shares issued or
sold were the Additional Common Shares, if any, actually issued or sold upon
the exercise of such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was the consideration
actually received by the Company for the issue, sale, grant or assumption of
all such Options, whether or not exercised, plus the additional consideration
actually received by the Company upon any exercise thereof, or the
consideration actually received by the Company for the issue or sale of all
such Convertible Securities, whether or not actually converted or exchanged,
plus the additional consideration actually received by the Company upon any
conversion or exchange thereof, and


 


(ii)           in the case of
Options for Convertible Securities, only the Convertible Securities, if any, actually
issued or sold upon the exercise of such Options were issued at the time of the
issue, sale, grant or assumption of such Options, and the consideration
received by the Company for the Additional Common Shares deemed to have then
been issued was the consideration actually received by the Company for the
issue, sale, grant or assumption of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the Company (pursuant to
Section 7.4.6 hereof) upon the issue or sale of such Convertible Securities
with respect to which such Options were actually exercised.


 


7.4.5.  Treatment of Stock
Dividends, Stock Splits, etc.  In
case the Company at any time or from time to time after the date hereof shall
declare or pay any dividend on the shares of Common Stock payable in shares of
Common Stock or other securities, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock), then, and in each such case, Additional Common Shares shall
be deemed to have been issued (a) in the case of any such dividend, immediately
after the close of business on the record date for the determination of holders
of any class of securities entitled to receive such dividend, or (b) in the
case of any such subdivision, at the close of business on the day immediately
prior to the day upon which such corporate action becomes effective.


 


7.4.6.  Computation of
Consideration.  For the purposes of
this Section 7.4:


 


(a)           the consideration
for the issue or sale of any Additional Common Shares shall, irrespective of
the accounting treatment of such consideration, be computed at the fair value
thereof at the time of such issue or sale, as determined in good faith by the
Board, without deduction


 


13

















 


for any
expenses paid or incurred by the Company or any commissions or compensations
paid or concessions or discounts allowed to underwriters, dealers or others
performing similar services in connection with such issue or sale.  In the event Additional Common Shares are
issued or sold together with other stock or securities or other assets of the
Company for a consideration which covers both, the consideration for the issue
or sale of Additional Common Shares shall be the portion of such consideration
so received, computed as provided in this Section 7.4.6, allocable to such
Additional Common Shares, all as determined in good faith by the Board.  Notwithstanding the foregoing, if Additional
Common Shares are issued (i) to an Affiliate of the Company or (ii) in
connection with any acquisition by the Company of stock or assets of a third
party or parties, the fair value of such Additional Common Shares at the time
of such issue or sale shall be the value as determined in good faith by the
Board, except that in the case of issuances to Affiliates of the Company, or in
connection with acquisitions by the Company of stock or assets of a third
party, such fair value shall be the value set forth in an opinion of
independent accountants or investment bankers selected by the Company, if such
engagement is reasonably requested by the Majority Warrantholders;


 


(b)           Additional Common
Shares deemed to have been issued pursuant to Section 7.4.4 hereof shall be
deemed to have been issued for a consideration per share determined by
dividing:


 


(i)            the total amount of
consideration, if any, received and/or receivable by the Company as direct consideration
for the issue, sale, grant or assumption of the Options or Convertible
Securities in question, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration the purpose of which is to protect against dilution) payable to
the Company upon the exercise in full 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, in each case
computing such consideration as provided in the foregoing clause (a), by


 


(ii)           the maximum number
of shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment
of such number the purpose of which is to protect against dilution) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities; and


 


14

















 


(c)           Additional Common
Shares deemed to have been issued pursuant to Section 7.4.5 hereof shall be
deemed to have been issued for no consideration, unless the Company actually
receives consideration for any such issuance.


 


7.4.7.  Adjustments for
Combinations, etc.  In case the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
the Exercise Price in effect immediately prior to such combination or
consolidation shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.


 


7.4.8.  Shares Deemed
Outstanding.  Unless otherwise
specifically provided herein, for all purposes of the computations to be made
pursuant to this Section 7.4, there shall be deemed to be outstanding all
shares of Common Stock issuable pursuant to the exercise of Options and
conversion of Convertible Securities outstanding at the time as of which such
computation is made.  No adjustment
shall be made in the Exercise Price upon the issuance of shares of Common Stock
pursuant to Options and Convertible Securities so deemed to be outstanding, but
this Section 7.4.8 shall not prevent other adjustments in the Exercise Price
arising by virtue of such outstanding Options or Convertible Securities
pursuant to the provisions of Sections 7.4.2, 7.4.4 and 7.4.5 hereof.


 


7.4.9.  Warrant Agent’s
Disclaimer.  The Warrant Agent shall
have no duties or responsibilities under this Section 7.4, including, but not
limited to, determining when an adjustment under this Section 7.4 should be
made, how such adjustment should be made or what the adjustment should be. The
Warrant Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for the Company’s failure to comply with this Section 7.4.


 


7.4.10.  Filing of
Registration Statement. In the event that the first registration statement
to be filed by the Company pursuant to Section 8.1.1 hereof has not been filed
with the Commission on or prior to the date (the “Filing Date”) that is
thirty (30) days from the date on which the Company receives the notice
described in Section 8.1.1 hereof, on the Filing Date the Exercise Price shall
be reduced to a price equal to the Exercise Price then in effect minus
$.25.  If such registration statement
has not been filed with the Commission on or prior to any subsequent thirty
(30) day period following the Filing Date, on each such date the Exercise Price
shall be further reduced to a price equal to the Exercise Price then in effect minus
$0.10, provided, however, that the Exercise Price shall not be
reduced pursuant to this Section 7.4.10 to an amount less than $0.10.


 


7.4.11.  Declaration of
Effectiveness of Registration Statement. In the event that the first
registration statement filed by the Company pursuant to Section 8.1.1 hereof
has not been declared effective by the Commission on or prior to the date (the
“120 Day Deadline”) that is one hundred twenty (120) days


 


15

















 


from the date
on which the Company receives the notice described in Section 8.1.1 hereof, on
the 120 Day Deadline the Exercise Price shall be reduced to a price equal to
the Exercise Price then in effect minus $0.25.  If such registration statement has not been declared effective by
the Commission on or prior to any subsequent thirty (30) day period following
such 120 Day Deadline, on each such date the Exercise Price shall be further
reduced to a price equal to the Exercise Price then in effect minus
$0.10, provided, however, that the Exercise Price shall not be
reduced pursuant to this Section 7.4.11 to an amount less than $0.10.


 


7.5.  Adjustments for Consolidation,
Merger, Sale of Assets, Reorganization, etc.  In case the Company after the date hereof (a) shall consolidate with
or merge into any other Person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall permit any other
Person to consolidate with or merge into the Company and the Company shall be
the continuing or surviving Person and the holders of a majority of the
Company’s capital stock before such consolidation or merger shall cease to hold
a majority of the Company’s capital stock after such consolidation or merger,
or (c) shall effect a capital reorganization or reclassification of the Common
Stock or Other Securities, then in the case of each such transaction proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Agreement, the holders of the Warrants, upon the exercise
thereof at any time after the consummation of such transaction, shall be
entitled to receive (at the aggregate Exercise Price in effect at the time of
such consummation for all Common Stock or Other Securities issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Stock
or Other Securities issuable upon such exercise prior to such consummation, the
greatest amount of securities, cash or other property to which such holder
would actually have been entitled as a shareholder upon such consummation if
such holder had exercised the rights represented by the Warrant Certificate
held by it immediately prior thereto.


 


7.6.  Notice of Adjustments.  Whenever the Exercise Price is adjusted, the
Company will promptly deliver to the Warrant Agent and to each registered
Warrantholder at the address provided to the Warrant Agent a certificate
setting forth, in reasonable detail, the event that triggered the adjustment or
issuance, the amount of the adjustment or issuance, the method by which such
adjustment or issuance was calculated (including a description of the basis on
which the Board made any determination hereunder), and the Exercise Price after
giving effect to such adjustment. 
Unless and until the Warrant Agent receives such a certificate, it may
assume without inquiry that the Exercise Price of any outstanding Warrants has
not been adjusted.


 


7.7.  No Rights or Liabilities as
Stockholder.  Nothing contained in
this Agreement or in any Warrant shall be construed as conferring upon any
Warrantholder who has not exercised a Warrant any rights as a stockholder of
the Company prior to exercise of any Warrant or as imposing any obligation on
such Warrantholder to purchase any Securities or as imposing any liabilities on
such holder as a stockholder of the Company, whether such obligation or
liabilities are asserted by the Company or by creditors of the Company.


 


16

















 


Section 8. 
Registration Rights.  The
Company will perform and comply, and cause each of its Subsidiaries to perform
and comply, with each of the following provisions as are applicable to it.  Each holder of Warrant Shares will perform
and comply with each of the following provisions as are applicable to such
holder.


 


8.1.  Demand Registration Rights.


 


8.1.1.  General.  One or more holders of Warrants or Warrant
Shares who at such time hold greater than 20% of the Warrant Shares that have
been or may be issued upon exercise, conversion or exchange of the Warrants (“Initiating
Holders”) may request, by written notice to the Company, that the
Company effect the registration under the Securities Act for a Public Offering
of all or a specified part of the Registrable Securities held by such
Initiating Holders, without exercising, converting or exchanging the Warrants
held by such Initiating Holders prior to making such request.  Such notice shall specify the intended
method or methods of distribution. 
Promptly after receipt of such notice from the Initiating Holders, the
Company shall give notice of such requested registration to all other holders
of Registrable Securities and Warrantholders 
in accordance with Section 8.2 hereof.  The Company will then use its reasonable best efforts to effect
the registration under the Securities Act of the Registrable Securities which
the Company has been requested to register by such Initiating Holders, together
with all other Registrable Securities which the Company has been requested to
register pursuant to Section 8.2 hereof or otherwise by notice delivered to the
Company within 20 days after the Company has given the required notice of such
requested registration (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent requisite to permit
the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Securities which the Company has been so
requested to register; provided, however, that the Company shall
not be obligated to take any action to effect any such registration pursuant to
this Section 8.1.1 within 180 days immediately following the effective
date of any registration statement pertaining to an underwritten public
offering of securities of the Company for its own account (other than a Rule 145
Transaction, or a registration relating solely to employee benefit plans).


 


8.1.2.  Form; Limitations.  Except as otherwise provided above, each
registration requested pursuant to Section 8.1.1 hereof shall be effected
by the filing of a registration statement on Form S-1 (or any other form which
includes substantially the same information as would be required to be included
in a registration statement on such form as currently constituted), unless the
use of a different form has been agreed to in writing by holders of at least a
majority of the Registrable Securities to be included in the proposed
registration statement in question (the “Majority Participating Holders”)
or the Company is then eligible to use Form S-3 for a Public Offering by the
Majority Participating Holders of their Warrant Shares; provided, however,
that the Company shall not be required to effect any registration requested
pursuant to Section 8.1.1 hereof on any form other than Form S-3 (or any
successor form) if the Company has previously


 


17

















 


effected three
or more registrations of Registrable Securities under Section 8.1.1 hereof on
any form other than Form S-3 (or any successor form).  No registration of Registrable Securities which shall not have
become and remained effective in accordance with this Section 8.1 shall be
included in the calculation of the number of registrations contemplated by this
Section 8.1.2 (unless the Initiating Holders withdraw their request for such
registration, other than (i) if such withdrawal is a result of information
concerning the business or financial condition of the Company which is made
known after the date on which such registration was requested or (ii) if the
Initiating Holders pay all the expenses of such registration otherwise payable
by the Company pursuant to Section 8.1.3 hereof).  If at the time of any request to register Registrable Securities
pursuant to this Section 8.1, the Company is engaged or has plans to engage in
a registered public offering or is engaged in any other activity which, in the
good faith determination of the Board, would be adversely affected by the
requested registration, then the Company may at its option direct that such
request be delayed for a period not in excess of 30 days from the date of such
request, such right to delay a request to be exercised by the Company not more
than once in any 12-month period.  In
the event that, in the judgment of the Company, it is advisable to suspend use
of a prospectus included in a registration statement due to pending material
developments or other events that have not yet been publicly disclosed and as
to which the Company believes public disclosure would be detrimental to the
Company, the Company shall notify all selling stockholders to such effect, and,
upon receipt of such notice, each such selling stockholder shall immediately
discontinue any sales of Registrable Securities pursuant to such registration
statement until such selling stockholder has received copies of a supplemented
or amended prospectus or until such selling stockholder is advised in writing
by the Company that the then current prospectus may be used and has received
copies of any additional or supplemental filings that are incorporated or
deemed incorporated by reference in such prospectus.  Notwithstanding anything to the contrary herein, the Company
shall not exercise its rights under the foregoing sentence to suspend sales of
Registrable Securities for a period in excess of 30 days consecutively or 60
days in any 365-day period.


 


8.1.3.  Payment of Expenses.  The Company shall pay all reasonable
expenses of holders of Warrant Shares incurred in connection with the first
three registrations of Registrable Securities requested pursuant to this
Section 8.1 (including the reasonable fees and expenses of a single legal
counsel representing all selling stockholders), other than underwriting
discounts and commissions, if any, and applicable transfer taxes, if any.


 


8.1.4.  Additional Procedures.  In the case of a registration pursuant to
this Section 8.1, whenever the Initiating Holders shall request that such
registration shall be effected pursuant to an underwritten offering, the
Company shall include such information in the written notices to holders of
Registrable Securities referred to in Section 8.1.2 hereof.  In such event, the right of any holder of
Registrable Securities to have securities owned by such holder included in such
registration pursuant to this Section 8.1 shall be conditioned upon such
holder’s


 


18

















 


participation
in such underwriting and the inclusion of such holder’s Registrable Securities
in the underwriting (unless otherwise mutually agreed upon by the Majority
Participating Holders and such holder). 
If requested by the underwriters of such registration, the Company,
together with the holders of Registrable Securities proposing to distribute
their securities through such underwriting, will enter into an underwriting
agreement with such underwriters for such offering containing such
representations and warranties by the Company and such holders and such other
terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
customary indemnity and contribution provisions (subject, in each case, to the
limitations on such liabilities set forth in this Agreement).


 


8.2.  Piggyback Registration Rights.


 


8.2.1.  General.  Each time the Company proposes to register
any shares of Common Stock under the Securities Act on a form which would
permit registration of Registrable Securities for sale to the public, for its
own account and/or for the account of any holders of Registrable Securities or
Affiliate of a holder of Registrable Securities (pursuant to Section 8.1
hereof or otherwise), for sale in a Public Offering, the Company will give
notice to all holders of Registrable Securities of its intention to do so.  Any such holder may, by written response
delivered to the Company within 20 days after the effectiveness of such notice,
request that all or a specified part of the Registrable Securities held by such
holder be included in such registration. 
The Company thereupon will use its reasonable efforts to cause to be
included in such registration under the Securities Act all shares of Common
Stock which the Company has been so requested to register by such holders, to
the extent required to permit the disposition (in accordance with the methods
to be used by the Company or other holders of shares of Common Stock in such
Public Offering) of the Registrable Securities to be so registered.  No registration of Registrable Securities
effected under this Section 8.2 shall relieve the Company of any of its
obligations to effect registrations of Registrable Securities pursuant to
Section 8.1 hereof.  The Company
may withdraw or suspend any registration covered by this Section 8.2 at
any time (subject, in the case of any registration also covered by
Section 8.1 hereof, to any limitations set forth therein).


 


8.2.2.  Excluded Transactions.  The Company shall not be obligated to effect
any registration of Registrable Securities under this Section 8.2
incidental to the registration of any of its securities in connection with:


 


(a)           Any Public Offering
relating to employee benefit plans or dividend reinvestment plans; or


 


(b)           Any Public Offering
relating to the acquisition or merger after the date hereof by the Company or
any of its Subsidiaries of or with any other businesses.


 


19

















 


8.2.3.  Payment of Expenses.  The Company shall pay all reasonable fees
and expenses of a single legal counsel representing any and all holders of
Registrable Securities incurred in connection with the first three registrations
of Registrable Securities requested pursuant to this Section 8.2.


 


8.2.4.  Additional Procedures.  Holders of Warrant Shares participating in
any Public Offering pursuant to this Section 8.2 shall take all such
actions and execute all such documents and instruments that are reasonably
requested by the Company to effect the sale of their Warrant Shares in such
Public Offering, including, without limitation, being parties to the
underwriting agreement entered into by the Company and any other selling stockholders
in connection therewith and being liable in respect of the representations and
warranties by, and the other agreements (including without limitation customary
selling stockholder representations, warranties, indemnifications and “lock-up”
agreements) for the benefit of the underwriters; provided, however,
that (a) with respect to individual representations, warranties,
indemnities and agreements of selling holders of Warrant Shares in such Public
Offering, the aggregate amount of such liability shall not exceed such holder’s
net proceeds from such offering and (b) to the extent selling holders of
Warrant Shares give further representations, warranties and indemnities, then
with respect to all other representations, warranties and indemnities of sellers
of shares in such Public Offering, the aggregate amount of such liability shall
not exceed the lesser of (i) such holder’s pro rata portion of any such
liability, in accordance with such holder’s portion of the total number of
Warrant Shares included in the offering or (ii) such holder’s net proceeds
from such offering.


 


8.3.  Certain
Other Provisions.


 


8.3.1.  Underwriter’s Cutback.  In connection with any registration of
Warrant Shares, the underwriter may determine that marketing factors (including,
without limitation, an adverse effect on the per share offering
price) require a limitation of the number of Warrant Shares to be
underwritten.  Notwithstanding any
contrary provision of Section 8.1 or Section 8.2 hereof, and subject to the
terms of this Section 8.3.1, the underwriter may limit the number of
shares which would otherwise be included in such registration by excluding any
or all Registrable Securities from such registration (it being understood that
the number of shares which the Company seeks to have registered in such
registration shall not be subject to exclusion, in whole or in part, under this
Section 8.3.1).  Upon receipt of
notice from the underwriter of the need to reduce the number of shares to be
included in the registration, the Company shall advise all holders of the
Company’s securities that would otherwise be registered and underwritten
pursuant hereto, and the number of shares of such securities, including
Registrable Securities, that may be included in the registration shall be
allocated in the following manner, unless the underwriter shall determine that
marketing factors require a different allocation:  (i) shares, other than Registrable Securities, requested to
be included in such registration by stockholders shall be excluded unless (x)
the Company has, prior to the date hereof, or after the date hereof with


 


20

















 


the consent of
the Majority Holders, granted registration rights which are to be treated on an
equal basis with Registrable Securities for the purpose of the exercise of the
underwriter cutback (with it being specifically agreed and acknowledged that
the registration rights granted (1) to Silicon Valley Bank pursuant to the
Registration Rights Agreement, dated on or around December 30, 2002, between
the Company and Silicon Valley Bank and (2) to certain holders pursuant to the
Amended and Restated Warrant and Registration Rights Agreement, dated February
21, 2003, by and among the Company and the Warrant Agent as warrant agent are
to be treated on an equal basis with Registrable Securities for the purposes of
this underwriting cutback), with it being specifically acknowledged that the
registration rights granted to the holders of any such shares of Common Stock
are to be treated on an equal basis with Registrable Securities for purposes of
this underwriting cutback; and (ii) if further limitation on the number of
shares to be included in the offering is required, the number of Registrable
Securities and other shares of Common Stock that may be included in such
registration shall be allocated among holders thereof in proportion, as nearly
as practicable, to the respective amounts of Common Stock which each
stockholder requested be registered in such registration.  No securities excluded from the underwriting
by reason of the underwriter’s marketing limitation shall be included in such
registration.  Upon delivery of a
written request that Registrable Securities be included in an underwritten
offering pursuant to Section 8.1.1 or Section 8.2.1 hereof, the holder
thereof may not thereafter elect to withdraw therefrom without the written
consent the Company and the Majority Participating Holders.


 


8.3.2.  Registration
Procedures.  If and in each case
when the Company is required to use its reasonable best efforts to effect a
registration of any Registrable Securities as provided in Section 8.1 or
Section 8.2 hereof, the Company shall take appropriate and customary actions in
furtherance thereof, including, without limitation:


 


(a)           promptly filing with
the Commission a registration statement and using best efforts to cause such
registration statement to become effective;


 


(b)           preparing and filing
with the Commission such amendments and supplements to such registration
statements as may be required to comply with the Securities Act and to keep
such registration statement effective for a period not to exceed 270 days from
the date of effectiveness or such earlier time as the Registrable Securities
covered by such registration statement shall have been disposed of in
accordance with the intended method of distribution therefor or the expiration
of the time when a prospectus relating to such registration is required to be
delivered under the Securities Act; provided, however, that if the
registration is effected by the filing of a registration statement on Form S-3,
then the Company shall keep such registration statement effective for a period
not to exceed 3 years from the date of effectiveness or such earlier time as
the


 


21

















 


Registrable
Securities covered by such registration statement have been disposed of in
accordance with the intended method of distribution therefore, the expiration
of the time when a prospectus relating to such registration is required to be
delivered under the Securities Act, or such registration statement no longer
covers Registrable Securities;


 


(c)           using its best
efforts to register or qualify such Registrable Securities under the state
securities or “blue sky” laws of such jurisdictions as the sellers shall
reasonably request; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it would not otherwise be so subject; and


 


(d)           otherwise
cooperating reasonably with, and taking such customary actions as may
reasonably be requested by the holders of Registrable Securities in connection
with, such registration.


 


8.3.3.  Selection of
Underwriters and Counsel.  The
underwriters and legal counsel to be retained in connection with any Public
Offering shall be selected by the Board or, in the case of an offering
following a request therefor under Section 8.1.1 hereof, the Initiating
Holders with the consent of the Company (which consent shall not be
unreasonably withheld).


 


8.3.4.  Lock-Up.  Without the prior written consent of the
underwriters managing any Public Offering, for a period beginning seven days
immediately preceding and ending on the 90th day following the effective date
of the registration statement used in connection with such offering, no holder
of Warrant Shares (whether or not a selling stockholder pursuant to such
registration statement) representing at least 1% of the outstanding Common
Stock shall (a) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for such Common Stock or (b) enter into any
swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of Common Stock, whether any such
transaction described in clause (a) or (b) above is to be settled by
delivery of such Common Stock or such other securities, in cash or otherwise; provided,
however, that the foregoing restrictions shall not apply to (i) the
sale of Common Stock pursuant to any such registration statement filed in
accordance with Section 8.1 or Section 8.2 hereof; (ii) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions; or (iii) the exercise, conversion or exchange of Warrants or
conversions of shares of Common Stock into other classes of Common Stock
without change of holder.


 


22

















 


8.3.5.  Future Registration
Rights.  If, after the date hereof,
the Company enters into an agreement or other commitment with any other Person
that has the effect of establishing registration rights with respect to the
Company’s capital stock the terms of which are more favorable, taken as a
whole, to such Person than the registration rights established in favor of the
holders of Registrable Securities and Warrantholders pursuant to Section 8.1 or
Section 8.2 hereof, then the Company will promptly so notify the such holders
in writing, and the Company shall, without the necessity of any action on the
part of such holders, extend the benefits of such more favorable terms to such
holders as if such terms were contained in this Agreement, or permit such
holders to enter into such other agreement establishing such rights in lieu of
this agreement.


 


8.4.  Indemnification and Contribution.


 


8.4.1.  Indemnities of the
Company.  In the event of any
registration of any Registrable Securities or other debt or equity securities
of the Company or any of its Subsidiaries under the Securities Act pursuant to
Section 8.1, Section 8.2 hereof or otherwise, and in connection with any
registration statement or any other disclosure document produced by or on
behalf of the Company or any of its Subsidiaries including, without limitation,
reports required and other documents filed under the Exchange Act, and other
documents pursuant to which any debt or equity securities of the Company or any
of its Subsidiaries are sold (whether or not for the account of the Company or
its Subsidiaries), the Company will, and hereby does, and will cause each of
its Subsidiaries, jointly and severally, to indemnify and hold harmless each
seller of Registrable Securities, any Person who is or might be deemed to be a
controlling Person of the Company or any of its Subsidiaries within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,
their respective direct and indirect partners, advisory board members,
directors, officers, trustees, members and stockholders, and each other Person,
if any, who controls any such seller or any such controlling Person within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (each such person being referred to herein as a “Covered Person”),
against any losses, claims, damages or liabilities (or actions or proceedings
in respect thereof), joint or several, to which such Covered Person may be or
become subject under the Securities Act, the Exchange Act, any other securities
or other law of any jurisdiction, the common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained or incorporated by
reference in any registration statement under the Securities Act, any
preliminary prospectus or final prospectus included therein, or any related
summary prospectus, or any amendment or supplement thereto, or any document
incorporated by reference therein, or any other such disclosure document
(including without limitation reports and other documents filed under the
Exchange Act and any document incorporated by reference therein) or other
document or report, (ii) any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any violation or 


 


23

















 


alleged
violation by the Company or any of its subsidiaries of any federal, state,
foreign or common law rule or regulation applicable to the Company or any of
its Subsidiaries and relating to action or inaction in connection with any such
registration, disclosure document or other document or report, and will
reimburse such Covered Person for any legal or any other reasonable expenses
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however,
that neither the Company nor any of its Subsidiaries shall be liable to any
Covered Person in any such case to the extent that any such loss, claim,
damage, liability, action or proceeding arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement, incorporated document or other such
disclosure document or other document or report, in reliance upon and in
conformity with written information furnished to the Company or to any of its
Subsidiaries through an instrument duly executed by such Covered Person
specifically stating that it is for use in the preparation thereof.  The indemnities of the Company and of its
subsidiaries contained in this Section 8.4.1 shall remain in full force
and effect regardless of any investigation made by or on behalf of such Covered
Person and shall survive any transfer of securities.


 


8.4.2.  Indemnities to the
Company.  The Company and any of its
Subsidiaries may require, as a condition to including any securities in any
registration statement filed pursuant to this Agreement, that the Company and
any of its Subsidiaries shall have received an undertaking satisfactory to it
from the prospective seller of such securities, to indemnify and hold harmless
the Company and any of its Subsidiaries, each director of the Company or any of
its Subsidiaries, each officer of the Company or any of its Subsidiaries who
shall sign such registration statement and each other Person (other than such
seller), if any, who controls the Company and any of its Subsidiaries within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and each other prospective seller of such securities with respect
to any statement in or omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus included
therein, or any amendment or supplement thereto, or any other disclosure
document (including, without limitation, reports and other documents filed
under the Exchange Act or any document incorporated therein) or other
document or report, if such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company or any of its
Subsidiaries through an instrument executed by such seller specifically stating
that it is for use in the preparation thereof. 
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, any of its Subsidiaries or
any such director, officer or controlling Person and shall survive any transfer
of securities.


 


8.4.3.  Contribution.  If the indemnification provided for in
Section 8.4.1 or Section 8.4.2 hereof is unavailable to a party that
would have been entitled to indemnification pursuant to the foregoing
provisions of this Section 8.4 (an


 


24

















 


 “Indemnitee”) in respect of any
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to therein, then each party that would have been an
indemnifying party thereunder shall, in lieu of indemnifying such Indemnitee,
contribute to the amount paid or payable by such Indemnitee as a result of such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative
fault of such indemnifying party on the one hand and such Indemnitee on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof).  The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such indemnifying
party or such Indemnitee and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.  The parties agree that it
would not be just or equitable if contribution pursuant to this Section 8.4.3
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
preceding sentence.  The amount paid or
payable by a contributing party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 8.4.3 shall include any legal or other expenses
reasonably incurred by such Indemnitee in connection with investigating or
defending any such action or claim.  No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.


 


8.4.4.  Limitation on
Liability of Holders of Registrable Securities.  The liability of each holder of Registrable Securities in respect
of any indemnification or contribution obligation of such holder arising under
this Section 8.4 shall not in any event exceed an amount equal to the net
proceeds to such holder (after deduction of all underwriters’ discounts and
commissions) from the disposition of the Registrable Securities disposed
of by such holder pursuant to such registration.


 


8.5.  Reports Under Exchange Act.  In order to provide to the holders of
Warrant Shares the benefits of Rule 144 and any other rule or regulation of the
Commission that may at any time permit any such holder to sell securities of
the Company to the public without registration, and in order to make it
possible for the holders of Warrant Shares to register the sale of the
Registrable Securities pursuant to a registration on Form S-3 if the Company is
then otherwise eligible to use such Form, the Company agrees to:


 


(a)           make and keep public
information available, as those terms are understood and defined in Rule 144;


 


(b)           take such action,
including the registration of its Common Stock under Section 12 of the
Exchange Act, as is necessary to enable the holders of Warrant Shares to
utilize Form S-3 for the resale of their


 


25

















 


Registrable
Securities (ignoring, for this purpose, the provisions of Items I.A.5 and I.B.3
of the General Instructions thereto);


 


(c)           file with the
Commission in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and


 


(d)           furnish to any
holder of Warrant Shares, so long as the holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a registrant whose
securities may be resold in a secondary offering pursuant to Form S-3;
(ii) a copy of the most recent annual or quarterly report of the Company
filed with the Commission and such other reports and documents so filed by the
Company; and (iii) such other information as may be reasonably requested
in availing any holder of Shares any rule or regulation of the Commission which
permits the selling of any such securities without registration or pursuant to
such form.


 


Section 9.  Definitions.  For the purposes of this Agreement, the
following terms have the meanings below:


 


“Additional
Common Shares” shall mean, subject to Section 7.4.8 hereof, all shares of
Common Stock (including treasury shares) issued or sold (or, pursuant to
Section 7.4.4 or 7.4.5 hereof, deemed to be issued) by the Company after the
date hereof, whether or not subsequently reacquired or retired by the Company,
other than (i) shares of Common Stock issued or issuable upon conversion,
exercise or exchange of the Warrants; and (ii) Excluded Issuances.


 


“Affiliate”
shall mean, with respect to the Company or any of its Subsidiaries (or any
other specified Person), any other Person which, directly or indirectly
controls or is controlled by or is under direct or indirect common control with
the Company or such Subsidiary (or such specified Person), and, without
limiting the generality of the foregoing, shall include (a) any other Person which
beneficially owns or holds 10% of more of any class of voting securities of
such Person or 10% or more of the equity interest in such Person, (b) any other
Person of which such Person beneficially owns or holds 10% or more of any class
of voting securities or in which such Person beneficially owns or holds 10% or
more of the equity interest in such Person and (c) any director or executive
officer of such Person.  For the
purposes of this definition, the term “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”), as used
with respect to any Person, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.


 


“Agreement”
shall have the meaning set forth in the first paragraph of this Agreement.


 


26

















 


“Antidilution
Price” shall have the meaning set forth in Section 7.4.2 hereof.


 


“Board”
shall mean the Board of Directors of the Company.


 


“Business
Day” shall mean any day, excluding Saturday, Sunday and any day which shall
be in New York, New York or Boston, Massachusetts a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close.


 


“Commission”
shall mean the Securities and Exchange Commission.


 


“Common
Stock” shall mean the Company’s common stock, par value $0.001 per share.


 


“Company”
shall have the meaning set forth in the first paragraph of this Agreement.


 


“Covered
Person” shall have the meaning set forth in Section 8.4.1 hereof.


 


“Convertible
Securities” shall mean any evidences of indebtedness, shares of stock
(other than shares of Common Stock) or other securities, including warrants,
directly or indirectly convertible into or exchangeable for shares of Common
Stock.


 


“Current
Market Price” shall mean on any date specified herein, the average daily
Market Price during the period of the most recent 10 days, ending two trading
days immediately preceding such date, on which the national securities
exchanges were open for trading, except that if no Common Stock is then listed
or admitted to trading on any national securities exchange or quoted in the
over-the-counter market, the Current Market Price shall be the Market Price on
such date.


 


“Depository”
shall have the meaning set forth in Section 2 hereof.


 


“Exchange
Act” shall mean the Securities Exchange Act of 1934, as in effect from time
to time.


 


“Exchange
Agreement” shall have the meaning set forth in the second paragraph hereof.


 


“Excluded
Issuance” shall mean the issuance of shares of Common Stock (or options
exercisable therefor) to officers, directors, and employees of the Company,
which shares are either (a) currently subject to the Company’s stock option
plan or (b)
                          
shares that are not currently subject to the Company’s stock option plan.


 


“Exercise
Price” shall have the meaning set forth in Section 7.4.1 hereof.


 


“Expiration
Date” shall mean 5:00 P.M. Boston time
on              ,
2007.


 


27

















 


“Fair
Market Value” shall mean, as of any date, as to any share of Common Stock,
the Board’s good faith determination of the fair value of such shares as of the
applicable reference date.


 


“Filing
Date” shall have the meaning set forth in Section 7.4.10 hereof.


 


“Global
Warrant” Shall have the meaning set froth in Section 2 hereof.


 


“Indemnitee”
shall have the meaning set forth in Section 8.4.3 hereof.


 


“Initial
Exercise Price” shall have the meaning set forth in the second paragraph of
this Agreement.


 


“Initiating
Holders” shall have the meaning set forth in Section 8.1.1 hereof.


 


“Majority
Holders” shall mean, as of any date, the holders of a majority of the
Warrant Shares outstanding on such date.


 


“Majority
Participating Holders” shall have the same meaning set forth in Section
8.1.2 hereof.


 


“Majority
Warrantholders” shall mean at any time holders of more than 50% of the Warrants
or, if the Warrants have been exercised, the Warrant Shares.


 


“Market
Price” shall mean on any date specified herein, the amount per share of
Common Stock equal to (a) the last sale price of Common Stock, regular way, on
such date or, if no such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each case as officially
reported on the principal national securities exchange on which Common Stock is
then listed or admitted to trading, or (b) if Common Stock is not then listed
or admitted to trading on any national securities exchange but is designated as
a national market system security by the NASD, the last trading price of Common
Stock on such date, or (c) if there shall have been no trading on such date or
if Common Stock is not so designated, the average of the closing bid and asked
prices of Common Stock on such date as shown by the NASD automated
quotation  system, or if applicable, the
OTCBB, or (d) if the Common Stock is not then listed or admitted to trading on
any national exchange or quoted in the over-the-counter market, the Market
Price thereof determined by good faith mutual agreement of the Company and the
Majority Warrantholders.  If, in the
case of subsection (d), the Company and the Majority Warrantholders are unable
to agree on the value of such Common Stock within 10 business days, the Market
Price shall be determined in accordance with the following appraisal process:


 


Within the
following five business days, each of the Company and the Majority
Warrantholders shall select and retain a firm of recognized expertise in the
valuation of business to perform a valuation of the Market Price.  Such firms shall then value the shares of
the Common Stock, on a going concern basis, without regard to any minority,
marketability or other discount resulting from consideration of a minority
interest, the Company’s status as a closely held corporation or the existence
of any put or call rights.


 


28

















 


The Company shall provide to both valuation firms any information
reasonably requested by either such firm in connection with its valuation.  Each such firm shall deliver its valuation
report to the Company and the holder within 20 days after receiving all requested
information from the Company.  If the
greater of the valuations of a share of the Common Stock is no more than 110%
of the lesser of such valuations, the Market Price shall be deemed to be the
average of the two valuations.  If the
greater of such valuations exceeds 110% of the lesser of such valuations, the
two valuation firms shall select a third mutually acceptable valuation firm
within five business days of such determination.  Such third valuation firm shall be directed to provide, within 15
business days, its valuation report, and the valuation determined by the first
two valuation firms that is closest to the valuation determined by the third
valuation firm shall be the Market Price as of the reference date.  The Company shall bear all costs and
expenses of this appraisal process.


 


“120 Day
Deadline” shall have the meaning set forth in Section 7.4.11 hereof.


 


“Options”
shall mean options, warrants or other rights to subscribe for, purchase or
otherwise acquire either Common Stock or Convertible Securities.


 


“Other
Securities” shall mean any stock (other than Common Stock) and other
securities of the Company or any other Person which the holders of the Warrants
at any time shall be entitled to receive, or shall have received, upon the
exercise of the Warrants, in lieu of or in addition to Common Stock, or which
at any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 6 hereof or
otherwise.


 


“Person”
shall mean an individual, a corporation, a partnership, a limited liability
company, a trust, an unincorporated organization or a government organization
or an agency or political subdivision thereof.


 


“Physical
Warrant” shall have the meaning set forth in Section 2 hereof.


 


“Public
Offering” shall mean a public offering and sale of Common Stock for cash
pursuant to an effective registration statement under the Securities Act.


 


“Qualified
Institutional Buyer” shall have the meaning set forth in Section 6.1
hereof.


 


“Registrable
Securities” shall mean the Warrant Shares and all shares of Common Stock
directly or indirectly issued or issuable with respect to the Warrant Shares by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization; provided,
however, that shares of Common Stock which are Registrable Shares shall
cease to be Registrable Shares (i) upon any sale pursuant to a registration
statement or Rule 144 under the Securities Act or (ii) at such time as they
become eligible for sale pursuant to Rule 144(k) under the Securities Act.


 


“Rule 144”
shall mean Rule 144 under the Securities Act (or any successor Rule).


 


29

















 


“Rule 145 Transaction”
shall mean a registration on Form S-4 pursuant to Rule 145 of the Securities
Act (or any successor Form or provision, as applicable).


 


“Securities”
shall mean any debt or equity securities of the Company, whether now or
hereafter authorized, and any instrument convertible into or exchangeable for
Securities or a Security.  “Security”
shall mean one of the Securities.


 


“Securities
Act” shall mean the Securities Act of 1933, as in effect from time to time.


 


“Stock”
shall include any and all shares, interests or other equivalents (however
designated) of, or participants in, the capital stock of a corporation of any
class.


 


“Subsidiary”
shall mean, for any Person, (i) a corporation a majority of whose voting stock
is at the time, directly or indirectly, owned by such Person, by one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person, (ii) a partnership in which such Person or a Subsidiary of such
Person is, at the date of determination, a general or limited partner of such
partnership, but only if such Person or its Subsidiary is entitled to receive
more than 50% of the assets of such partnership upon its dissolution, (iii) a
limited liability company, a majority of whose membership interests is, at the time,
directly or indirectly owned by such Person or with respect to which such
Person has a right, under any scenario, to receive 50% or more of the
distributions of the assets of such limited liability company upon its
dissolution, or (iv) any other Person (other than a corporation or partnership)
in which such Person, a Subsidiary of such Person or such Person and one or
more Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (a) at least a majority ownership interest or (b)
the power to elect or direct the election of a majority of the directors or
other governing body of such Person.


 


“Warrant
Agent” shall have the meaning set forth in the first paragraph of this
Agreement.


 


“Warrant
Certificates” shall have the meaning set forth in Section 2 hereof.


 


“Warrant
Register” shall have the meaning set forth in Section 4 hereof.


 


“Warrant
Share Certificates” shall have the meaning set forth in Section 2 hereof.


 


“Warrant
Shares” shall mean the shares received or to be received upon exercise,
conversion or exchange of the Warrants.


 


“Warrants”
shall mean any warrants to purchase shares of Common Stock issued hereunder or
pursuant to the Exchange Agreement.


 


“Warrantholders”
shall mean the holders of the Warrants from time to time, together with any
permitted transferees of such holders who subsequently acquire Warrants.


 


30

















 


Section 10.  Payment of Taxes.  The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or governmental charge which may be payable in respect of any transfer
involved in the issue of any Warrant Certificates or any Warrant Share
Certificates in a name other than that of the registered holder of a Warrant
Share Certificate or a Warrant Certificate surrendered upon the exercise of a
Warrant, and the Company shall not be required to issue or deliver such Warrant
Certificates or Warrant Share Certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or charge or shall have established to the satisfaction of
the Company that such tax or charge has been paid.  The Warrant Agent shall have no duty or obligation to take any
action under any Section of this Agreement which requires the payment by a
Warrantholder of applicable taxes and governmental charges unless and until the
Warrant Agent is satisfied that all such taxes and/or charges have been paid.


 


Section 11. 
Mutilated or Missing Warrant
Certificates and Warrant Share Certificates.  In case any of the Warrant Certificates shall be mutilated, lost,
stolen or destroyed, the Company, at its expense, shall issue and the Warrant
Agent shall countersign, in exchange and substitution for and upon cancellation
of the mutilated Warrant Certificate, or in lieu of and substitution for the
Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of
like tenor and representing an equivalent number of Warrants, but only upon
receipt of evidence reasonably satisfactory to the Company and the Warrant
Agent of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, satisfactory to the Company and the Warrant Agent.


 


Section
12.  Fractional Interests.


 


(a)           The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants or otherwise. If
more than one Warrant shall be presented for exercise in full at the same time
by the same holder, the number of full Warrant Shares which shall be issuable
upon the exercise thereof shall be computed on the basis of the aggregate
number of Warrant Shares purchasable on exercise of the Warrants so presented.
If any fraction of a Warrant Share would, except for the provisions of this
Section 12, be issuable on the exercise of any Warrants (or specified portion
thereof), the Company shall pay an amount in cash equal to the Current Market
Price of such fractional Warrant Share as of the day immediately preceding the
date the Warrant is presented for exercise, multiplied by such fraction.


 


(b)           Warrants may be
issued in fractional interests. Holders of fractional interests in Warrants
will be entitled to purchase a number of Warrant Shares equal to the product
obtained by multiplying the number of Warrant Shares issuable with respect to a
full Warrant multiplied by the fractional interest owned by such holder in the
Warrant.

 


(c)           Whenever
a payment for fractional Warrant Shares is to be made by the Warrant Agent, the
Company shall (i) promptly prepare and deliver to the Warrant Agent a
certificate setting forth in reasonable detail the facts related to such
payment and the prices and/or formulas utilized in calculating such payments,
and (ii) provide sufficient monies to the Warrant Agent in the form of fully
collected funds to make such payments. 
The Warrant Agent shall be fully protected in relying upon such a
certificate and shall have no duty with respect to, and shall not


 


31

















 


be deemed to have knowledge of
any payment for fractional Warrant Shares under any Section of this Agreement
relating to the payment of fractional Warrant Shares unless and until the
Warrant Agent shall have received such a certificate and sufficient monies.


 


Section 13.  Merger,
Consolidation or Change of Name of Warrant Agent.  Any person into which the Warrant Agent may be merged or with
which it may be consolidated, or any person resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any person
succeeding to substantially all of the business of the Warrant Agent (including
the administration of this Agreement), shall be the successor to the Warrant
Agent hereunder without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such person would be
eligible for appointment as a successor warrant agent under the provisions of
Section 15 hereof.  In case at the time
such successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and in case at that time any of the Warrant Certificates shall have
been countersigned but not delivered, any such successor to the Warrant Agent
may adopt the countersignature of the original Warrant Agent; and in case at
that time any of the Warrant Certificates shall not have been countersigned,
any successor to the Warrant Agent may countersign such Warrant Certificates
either in the name of the predecessor Warrant Agent or in the name of the
successor to the Warrant Agent; and in all such cases such Warrant Certificates
shall have the full force and effect provided in the Warrant Certificates and
in this Agreement.


 


In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name, and in all such cases such Warrant Certificates shall have the full
force and effect provided in the Warrant Certificates and in this Agreement.

 


Section 14.  Warrant Agent.  The Warrant Agent undertakes the duties and
obligations imposed by this Agreement (and no implied duties or obligations
shall be read into this Agreement against the Warrant Agent) upon the following
terms and conditions, by all of which the Company and the Warrantholders, by
their acceptance thereof, shall be bound:


 


(a)           The statements contained herein and
in the Warrant Certificates shall be taken as statements of the Company and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except such as describe the Warrant Agent or action taken or to be taken by it.
The Warrant Agent assumes no responsibility with respect to the distribution of
the Warrant Certificates and the Warrant Share Certificates except as herein
otherwise provided.


 


(b)           The Warrant Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrant Certificates to be complied with
by the Company.


 


(c)           The Warrant Agent may consult at any
time with counsel of its own selection (who may be counsel for the Company) and
the Warrant Agent shall incur no liability or


 


32

















 


responsibility to the Company or to any
Warrantholder in respect of any action taken, suffered or omitted to be taken
by it hereunder in accordance with the opinion or the advice of such counsel.


 


(d)           The Warrant Agent shall incur no
liability or responsibility to the Company or to any Warrantholder for any
action taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument (whether in its original or facsimile form) believed by
it to be genuine and to have been signed, sent or presented by the proper party
or parties.


 


(e)           The Company agrees (i) to pay to the
Warrant Agent reasonable compensation for all services rendered by the Warrant
Agent (including fees and expenses of its counsel) and to reimburse the Warrant
Agent for all expenses, taxes and governmental charges and other charges and
disbursements of any kind and nature incurred by the Warrant Agent in the preparation,
delivery, execution, administration and amendment of this Agreement and the
exercise and performance of its duties hereunder and (ii) to indemnify the
Warrant Agent (and any predecessor Warrant Agent) and save it harmless against
any and all claims (whether asserted by the Company, a holder or any other
person), damages, losses, fines, penalties, settlements, expenses (including
taxes other than taxes based on the income of the Warrant Agent), liabilities,
including judgments, costs and counsel fees and expenses, for any action taken,
suffered or omitted to be taken by the Warrant Agent in connection with the
execution of this Agreement and the acceptance and administration of this
Agreement, except as a result of its gross negligence or willful misconduct
(each as finally determined by a court of competent jurisdiction). The costs
and expenses incurred in enforcing this right of indemnification shall be paid
by the Company.  The provisions of this
Section 14 shall survive the expiration of the Warrants, the termination of
this Agreement and the resignation or removal of the Warrant Agent.


 


(f)            The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one or more
registered Warrantholders shall furnish the Warrant Agent with reasonable
security and indemnity satisfactory to it for any costs and expenses which may
be incurred, but this provision shall not limit the power of the Warrant Agent
to take such action as it may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or under any
of the Warrants may be enforced by the Warrant Agent without the possession of
any of the Warrant Certificates or Warrant Share Certificates or the production
thereof at any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent and any recovery of judgment shall be for the ratable benefit
of the registered holders of the Warrants, as their respective rights or
interests may appear.


 


(g)           The Warrant Agent, and any
stockholder, affiliate, director, officer or employee of it, may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.


 


33

















 


(h)           The Warrant Agent shall act hereunder
solely as agent for the Company, and its duties shall be determined solely by
the provisions hereof.  The Warrant
Agent shall not be liable for any action taken, suffered or omitted to be taken
by it in connection with this Agreement except for its own gross negligence or
willful misconduct, each as finally determined by a court of competent
jurisdiction.  Anything to the contrary
notwithstanding, in no event shall the Warrant Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Warrant
Agent has been advised of the likelihood of such loss or damage.


 


(i)            The Warrant Agent shall not at any
time be under any duty or responsibility to any Warrantholder to make or cause
to be made any adjustment of the Exercise Price or number of the Warrant Shares
or other securities or property deliverable as provided in this Agreement, or
to determine whether any facts exist which may require any of such adjustments,
or with respect to the nature or extent of any such adjustments, when made, or
with respect to the method employed in making the same. The Warrant Agent shall
not be accountable with respect to the validity or value or the kind or amount
of any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.


 


(j)            Notwithstanding anything in this
Agreement to the contrary, neither the Company nor the Warrant Agent shall have
any liability to any Warrantholder or other person as a result of its inability
to perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued by
a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation; provided
that the Company must use its reasonable best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.


 


(k)           With respect to the exercise by a
Warrantholder of any Warrants in accordance with the terms of this Agreement
and with respect to any other actions or omissions that may arise as a result
of or under this Agreement, to the extent the Warrant Agent has any questions
or uncertainties as to what actions it should take with respect thereto, the
Warrant Agent may seek written direction from the Company as to what course of
action the Warrant Agent should take and the Warrant Agent shall be fully
protected and incur no liability in refraining from taking any action
thereunder unless and until the Warrant Agent has received such written
direction from the Company.  Any
application by the Warrant Agent for such written instructions from the Company
may, at the option of the Warrant Agent, set forth in writing any action
proposed to be taken or omitted by the Warrant Agent under this Agreement and
the date on and/or after which such action shall be taken or such omission
shall be effective. The Warrant Agent shall not be liable for any action taken
by, or omission of, the Warrant Agent in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than three Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the


 


34

















 


Warrant Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.


 


(l)            No provision of this Agreement shall
require the Warrant Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder or in
the exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.


 


(m)          Whenever in the performance of its
duties under this Agreement the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking, suffering or omitting to take any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the President, a Vice President, the Treasurer
or the Secretary of the Company and delivered to the Warrant Agent; and such
certificate shall be full authorization and protection to the Warrant Agent for
any action taken or suffered by it under the provisions of this Agreement in
reliance upon such certificate.


 


(n)           The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the President, a Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and such instructions
shall be full authorization and protection to the Warrant Agent, and the
Warrant Agent shall not be liable for any action taken, suffered or omitted to
be taken by it in accordance with instructions of any such officer.


 


(o)           The Warrant Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents, and the
Warrant Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, absent
gross negligence or willful misconduct (each as finally determined by a court
of competent jurisdiction) in the selection and continued employment thereof.


 


Section 15. 
Change of Warrant Agent.  The Warrant Agent or any successor Warrant
Agent may resign and be discharged from its duties under this Agreement upon 60
days’ notice in writing mailed to the Company. 
Upon such resignation or if the Warrant Agent shall become incapable of
acting as Warrant Agent, the Company shall appoint a successor to such Warrant
Agent. If the Company shall fail to make such appointment within a period of 60
days after it has been notified in writing of such resignation or incapacity by
the Warrant Agent or by the registered holder of a Warrant Certificate or a
Warrant Share Certificate, then the registered holder of any Warrant
Certificate or Warrant Share Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to such Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. The Majority Warrantholders shall be entitled at any time to remove
the Warrant Agent and appoint a successor to such Warrant Agent. Such successor
to the Warrant Agent must be approved by the Company, which shall not
unreasonably withhold such approval. After appointment the successor to the
Warrant


 


35

















 


Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the former Warrant Agent upon
payment of all fees and expenses due it and its agents and counsel shall
deliver and transfer to the successor to the Warrant Agent any property at the
time held by it hereunder and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided for in this Section 15, however, or any defect therein, shall not
affect the legality or validity of the appointment of a successor to the
Warrant Agent.


 


Section 16.  Notices to
Company and Warrant Agent.  Any notice or demand authorized by this
Agreement to be given or made by the Warrant Agent or by the registered holder
of any Warrant Certificate to or on the Company shall be sufficiently given or
made when and if delivered by facsimile transmission (provided confirmation of
receipt is received immediately thereafter) or when received, if deposited in
the mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent), as follows:


 


iBasis, Inc.


20 Second Avenue


Burlington, MA  01803


Attention: 
Chief Financial Officer


Facsimile No.: 781-505-7304


 


with a copy to:


 


Bingham, McCutchen LLP


150 Federal Street


Boston, MA 02110


Attn:      Johan
V. Brigham


Facsimile No.: 617-951-8736


 


In case the
Company shall fail to maintain such office or agency or shall fail to give such
notice of the location or of any change in the location thereof, presentations
may be made and notices and demands may be served at the office of the Warrant
Agent designated for such purpose.


 


Any notice
pursuant to this Agreement to be given by the Company or by the registered
holder(s) of any Warrant Certificate to the Warrant Agent shall be sufficiently
given when and if delivered by facsimile transmission (provided confirmation of
receipt is received immediately thereafter) or deposited in the mail,
first-class or registered, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:


 


U.S. Bank National Association


2 Avenue de Lafayette – 6th Floor


Boston, MA 
02111


Attention: 
Corporate Trust Services


Facsimile No.: 617-662-1458


 


36

















 


with copies to:


 


Nixon Peabody LLP


101 Federal Street


Boston, MA  02110


Attn: Robert J. Coughlin


Facsimile No.: 617-345-1300


 


and


 


Ropes & Gray LLP


One International Place


Boston, MA 02110


Attn: 
Thomas B. Draper


Facsimile No.: 617-951-7050


 


Section 17. 
Supplements and Amendments.  The Company and the Warrant Agent may from
time to time supplement or amend this Agreement or the Warrant Certificates
without the approval of any Warrantholders in order to cure any ambiguity or to
correct or supplement any provision contained herein or therein which may be
defective or inconsistent with any other provision herein, or to make any other
revisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not in
any way adversely affect the interests of the Warrantholders.  Any supplement or amendment not covered by
the preceding sentence shall require the consent of the Majority
Warrantholders, the Company and the Warrant Agent.  Prior to executing any supplement or amendment, the Warrant Agent
shall be entitled to rely on an officer’s certificate of the Company to the
effect that such amendment or supplement complies with the terms of this
Section 17.  Notwithstanding anything in
this Agreement to the contrary, the prior written consent of the Warrant Agent
must be obtained in connection with any supplement or amendment that alters the
rights or duties of the Warrant Agent.


 


Section 18.  Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.


 


Section 19. 
Survival of Registration Rights Provisions,
Warrant Agent Provisions.  The
provisions of Sections 8 and 14 hereof shall survive the exercise or expiration
of the Warrants.


 


Section 20. 
Governing Law; Submission to Jurisdiction: Waiver
of Jury Trial.  This Agreement and
each Warrant Certificates issued hereunder shall be deemed to be a contract
made under the laws of The Commonwealth of Massachusetts and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State, without regard to principles of conflicts of laws.  Each party hereto hereby submits to the
nonexclusive jurisdiction of the United States District Court for the District
of Massachusetts and of any Massachusetts state court sitting in Boston for
purposes of all legal proceedings arising out of or relating to this agreement
or the transactions contemplated hereby. Each party hereto irrevocably waives,
to the


 


37

















 


fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.


 


TO THE EXTENT
NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO
HEREBY WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT
OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR
OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING. 
EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES
HERETO THAT THIS SECTION 20 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY
ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT.   Any party hereto may file an original
counterpart or a copy of this Section 20 with any court as written evidence of
the consent of each party hereto to the waiver of its right to trial by jury.


 


Section 21. 
Exercise of Rights and Remedies.  No delay of or omission in the exercise of
any right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in
any such breach or default, or of any similar breach or default occurring
later; nor shall any such delay, omission or waiver of any single breach or
default be deemed a waiver of any other breach or default occurring before or
after that waiver.


 


Section 22. 
Benefits of This Agreement.  Nothing in this Agreement shall be construed
to give to any Person or corporation other than the Company, the Warrant Agent
and the Warrantholders (including any holder of a beneficial interest in any
Warrant) any legal or equitable right, remedy or claim under this Agreement,
and this Agreement shall be for the sole and exclusive benefit of the Company,
the Warrant Agent and the Warrantholders (including any holder of a beneficial
interest in any Warrant).


 


Section 23.  Counterparts.  This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.


 


[Signature page follows]


 


38

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed, as
of the day and year first above written.


 


 


	
   

  	
  iBASIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION,

  as Warrant Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 

















 


Exhibit A


 


FORM OF WARRANT CERTIFICATE


 


THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE 2004 WARRANT AND REGISTRATION
RIGHTS AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.  THIS SECURITY IS NOT EXCHANGABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE 2004 WARRANT AND
REGISTRATION RIGHTS AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE 2004 WARRANT AND REGISTRATION RIGHTS
AGREEMENT.  UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.


 


THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH BELOW.  BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER) AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.


 


THE SHARES OF
STOCK PURCHASABLE UPON EXERCISE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE
ARE ALSO SUBJECT TO THE 2004 WARRANT AND REGISTRATION RIGHTS AGREEMENT AND THE
SECURITIES


 

















 


EXCHANGE
AGREEMENT TO WHICH THE ISSUER AND THE WARRANT AGENT ARE PARTY, A COPY OF WHICH
MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE ISSUER OR OBTAINED FROM THE
ISSUER WITHOUT CHARGE.


 


2

















 


iBASIS, INC.


 


	
  No.

  	
   

  	
  5,176,065 Warrants

  



 


CUSIP NO: 450732 11 0


 


WARRANT CERTIFICATE


 


This Warrant
Certificate certifies that CEDE & Co., or its registered assigns, is the
registered holder of warrants expiring              , 2007 (the “Warrants”) to purchase shares of Common
Stock, par value $0.001 per share (the “Common Stock”), of iBasis, Inc., a
Delaware Corporation (the “Company”). 
Each Warrant entitles the holder upon exercise to receive from the
Company on or after the date of issuance of such Warrant and on or before 5:00
P.M. Boston Time on             , 2007
(the “Expiration Date”), one fully paid and nonassessable share of Common Stock
(a “Warrant Share”) at the initial exercise price (the “Exercise Price”) of $1.85
payable in lawful money of the United States of America upon surrender of this
Warrant Certificate and payment of the Exercise Price at the office or agency
of the Warrant Agent, but only subject to the conditions set forth herein and
in the 2004 Warrant and Registration Rights Agreement referred to on the
reverse hereof.  The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the 2004 Warrant
and Registration Rights Agreement.


 


No Warrant may
be exercised after the Expiration Date, and to the extent not exercised by such
time such warrants shall become void.


 


This Warrant
Certificate shall not be valid unless countersigned by the Warrant Agent, as
such term is used in the 2004 Warrant and Registration Rights Agreement.


 


This Warrant
Certificate, and all actions, claims and conduct relating thereto, shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts, without regard to the principles of conflicts of laws.


 


3

















 


IN WITNESS
WHEREOF, iBasis, Inc., has caused this Warrant Certificate to be duly executed.


 


	
  Dated:

  	
  , 2004

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  iBASIS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


WARRANT AGENT’S CERTIFICATE OF
AUTHENTICATION


This is one of the Warrants
described in the within-named 2004 Warrant and Registration Rights Agreement.


 


U.S. BANK NATIONAL ASSOCIATION,
as Warrant Agent


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  As
  Authenticating Agent

  
	
   

  	
  (if different
  from Warrant Agent)

  
				



 


4

















 


The Warrants
evidenced by this Warrant Certificate are part of a duly authorized issue of
Warrants expiring             , 2007,
entitling the holder on exercise to receive shares of Common Stock and are
issued or to be issued pursuant to a 2004 Warrant and Registration Rights
Agreement dated as of              ,
2004 (the “2004 Warrant and Registration Rights Agreement”), duly executed and delivered
by the Company to U.S. Bank National Association, as warrant agent (the
“Warrant Agent”), which 2004 Warrant and Registration Rights Agreement is
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Warrant Agent, the Company
and the holders (the words “holders” or “holder” meaning the registered holders
or registered holder) of the Warrants. 
A copy of the 2004 Warrant and Registration Rights Agreement may be
obtained by the holder hereof upon written request to the Company.  Capitalized terms used herein without being
otherwise defined shall have the meaning ascribed to them in the 2004 Warrant
and Registration Rights Agreement.


 


Each Warrant
may be exercised at any time on or after the date of issuance of such Warrant
and on or before the Expiration Date. 
The holder of Warrants evidenced by this Warrant Certificate may
exercise them as follows:


 


(I)            The Warrants
evidenced by this Warrant Certificate may be exercised by the holder hereof, in
whole or in part, during normal business hours on any Business Day on or prior
to the Expiration Date, by surrender of this Warrant Certificate to the Company
at its principal office, accompanied by a subscription substantially in the
form attached to this Warrant Certificate duly executed by such holder and
accompanied by (a) wire transfer of immediately available funds or (b)
certified or official bank check payable to the order of the Company, in each
case in the amount obtained by multiplying (i) the number of shares of Common
Stock (without giving effect to any adjustment thereof pursuant to the
provisions of the 2004 Warrant and Registration Rights Agreement) for which the
Warrant evidenced by this Warrant Certificate is then being exercised, as
designated in such subscription, by (ii) the Initial Exercise Price.  Thereupon, such holder shall be entitled to
receive the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (or Other Securities) determined as
provided in Sections 6 and 7 of the 2004 Warrant and Registration Rights
Agreement.


 


(II)          The Warrants
evidenced by this Warrant Certificate may be converted by the holder hereof, in
whole or in part, into shares of Common Stock (or Other Securities), during
normal business hours on any Business Day on or prior to the Expiration Date,
by surrender of this Warrant Certificate to the Company at its principal
office, accompanied by a conversion notice substantially in the form attached
to this Warrant Certificate duly executed by such holder. Thereupon, such
holder shall be entitled to receive a number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (or Other
Securities) equal to:


 


(a)           the excess of


 


5

















 


(i) (x) the number of shares of Common Stock (or Other Securities)
determined as provided in Sections 6 and 7 of the 2004 Warrant and Registration
Rights Agreement which such holder would be entitled to receive upon exercise
of the Warrants represented by this Warrant Certificate for the number of
shares of Common Stock designated in such conversion notice (without giving
effect to any adjustment thereof pursuant to Sections 6 or 7 of the 2004
Warrant and Registration Rights Agreement) multiplied by (y) the Current Market Price
of each such share of Common Stock (or such Other Securities) so receivable
upon such exercise


 


over


 


(ii) (x) the number of shares of Common Stock (without giving effect to
any adjustment thereof pursuant to Sections 6 or 7 of the 2004 Warrant and
Registration Rights Agreement or other provisions thereof) which such holder
would be entitled to receive upon exercise of the Warrants represented by this
Warrant Certificate for the number of shares of Common Stock designated in such
conversion notice (without giving effect to any adjustment thereof pursuant to
Sections 6 or 7 of the 2004 Warrant and Registration Rights Agreement) multiplied
by (y) the Initial Exercise Price


 


divided by


 


(b) such
Current Market Price of each such share of Common Stock (or Other Securities).


 


In the event that upon any exercise of Warrants evidenced hereby the
number of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or its assignee a
new Warrant Certificate of like tenor, dated the date hereof and calling in the
aggregate on the face or faces thereof for the number of Warrants (without
giving effect to any adjustment thereof pursuant to the terms of the 2004
Warrant and Registration Rights Agreement) to the number of Warrants called for
on the face of this Warrant Certificate minus the number of Warrants designated
by the holder upon such exercise.


 


Upon the exercise of the Warrants evidenced by this Warrant Certificate
as provided above, the Company may elect either (i) to comply with the
requirements of Section 7.1.3 of the 2004 Warrant and Registration Rights
Agreement with respect to the issuance of shares of Common Stock in connection
with such exercise or (ii) upon written notice to the holder not more than two
Business Days following the date of exercise, to pay to the holder an amount
equal to the Market Price for each share of Common Stock issuable upon such
exercise (the “Cash Close Out”) in lieu of issuing such Common Stock.  Any Cash Close Out made in accordance with
this paragraph shall be paid within two Business Days of the exercise of the
Warrants evidenced by this Warrant Certificate by (a) wire transfer of
immediately available funds or (b) certified or official bank check payable to
the order of the holder hereof.


 


The Company
will not be required to issue fractional shares of Common Stock upon exercise
of the Warrants or distribute share certificates that evidence fractional
shares of Common Stock.  In lieu of
fractional shares of Common Stock, there may be paid to the registered Holder
of this Warrant Certificate at the time such Warrant Certificate is exercised
an amount in cash equal to the same fraction of the Current Market Value per
share of Common


 


6

















 


Stock on the
Business Day immediately proceeding the date this Warrant Certificate is
surrendered for exercise.


 


The holders of
the Warrants are entitled to certain registration rights with respect to the
Common Stock purchasable upon exercise thereof.  Such registration rights are set forth in Section 8 of the 2004
Warrant and Registration Rights Agreement.


 


Warrant
Certificates, when surrendered at the office of the Warrant Agent by the
registered holder thereof in person or by legal representative or attorney duly
authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the 2004 Warrant and Registration Rights Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.


 


Upon due
presentation for registration of transfer of this Warrant Certificate at the
office of the Warrant Agent a new Warrant Certificate or Warrant Certificates
of like tenor and evidencing in the aggregate a like number of Warrants shall
be issued to the transferee(s) in exchange for this Warrant Certificate, subject
to the limitations provided in the 2004 Warrant and Registration Rights
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.


 


The Company
and the Warrant Agent may deem and treat the registered holder(s) thereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof, and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary.  Neither the
Warrants nor this Warrant Certificate entitled any holder hereof to any rights
of a stockholder of the Company.


 


7

















 


FORM OF SUBSCRIPTION


 


[To be executed only upon exercise of
Warrant]


 


To iBasis,
Inc.:


 


The
undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to receive
                       (1)
shares of the Common Stock and herewith makes payment of
$            in
accordance with the terms hereof, and requests that the certificates for such
shares be issued in the name of, and delivered to
                             ,
whose address is as follows:


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street
  Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
						



 


 












(1) Insert here the number of
shares called for on the face of this Warrant Certificate (or, in the case of a
partial exercise, the portion thereof as to which the Warrant evidenced by this
Warrant Certificate is being exercised), in either case without making any
adjustment for any stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant evidenced by this Warrant
Certificate, may be delivered upon exercise. 
In the case of a partial exercise, a new Warrant Certificate will be
issued and delivered, representing the unexercised portion of the Warrant
evidenced by this Warrant Certificate, to the holder surrendering the Warrant
Certificate.


 


8

















 


FORM OF ASSIGNMENT


 


[To be executed only upon transfer of
Warrant]


 


For value
received, the undersigned registered holder of the Warrants evidenced by this
Warrant Certificate hereby sells, assigns and transfers unto
                              the
right represented by such Warrant Certificate to purchase
              (2)
shares of Common Stock of iBasis, Inc. to which such Warrant Certificate
relates, and appoints
                                   Attorney
to make such transfer on the books of iBasis, Inc. maintained for such purpose,
with full power of substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street
  Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  
	
   

  
	
  Signed in the presence of:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Name:

  
							



 












(2) Insert here the number of
shares called for on the face of this Warrant Certificate (or, in the case of a
partial transfer, the portion thereof as to which the Warrant evidenced by this
Warrant Certificate is being transferred), in either case without making any
adjustment for any stock or other securities or property or cash which,
pursuant to the adjustment provisions of the Warrant evidenced by this Warrant
Certificate, may be delivered upon exercise. 
In the case of a partial transfer, a new Warrant Certificate will be
issued and delivered, representing the non-transferred portion of the Warrants
evidenced by this Warrant Certificate, to the holder transferring the Warrants.


 


9

















 


FORM OF CONVERSION NOTICE


 


To iBasis,
Inc.:


 


The undersigned
registered holder of the Warrants evidenced by this Warrant Certificate hereby
irrevocably converts such Warrants with respect to
                   (3)
shares of the Common Stock which such holder would be entitled to receive upon
the exercise hereof, and requests that the certificates for such shares be
issued in the name of, and delivered to
                                     ,
whose address is as follows:


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of holder as specified on the face of
  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street
  Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
						



 












(3) Insert here the number of
shares called for on the face of this Warrant Certificate (or, in the case of a
partial conversion, the portion thereof as to which the Warrants evidenced by
this Warrant Certificate are being converted), in either case without making
any adjustment for additional shares of Common Stock or any other stock or
other securities or property or cash which, pursuant to the adjustment
provisions of the Warrant evidenced by this Warrant Certificate, may be
delivered upon exercise.  In the case of
a partial conversion, a new Warrant Certificate will be issued and delivered,
representing the unconverted portion of the Warrants, to the holder
surrendering this Warrant Certificate.


 


10

















 


SCHEDULE OF EXCHANGES


 


The following
exchanges of a part of this Global Warrant for Physical Warrants (or of
Physical Warrants for an interest in the Global Warrant) have been made:


 


	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Number of

  Warrants this

  Global Warrant

  	
   

  	
  Amount of

  increase in

  Number of

  Warrants of this

  Global Warrant

  	
   

  	
  Number of

  Warrants of this

  Global Warrant

  following such

  decrease (or

  increase)

  	
   

  	
  Signature of

  authorized

  officer of

  Warrant Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


11

















 


Exhibit B


 


FORM OF COMMON STOCK CERTIFICATE


 


To be provided


 

















 


Exhibit C


 


FORM OF QIB CERTIFICATION


 


To be provided