Document:

exaplan08.htm

EXHIBIT A

 

A. M. CASTLE & CO

2008 RESTRICTED STOCK, STOCK OPTION AND EQUITY COMPENSATION PLAN

(amended and restated as of December  9, 2010)

 

I. GENERAL

 

1. Purpose.  The A. M. Castle & Co. 2008 Restricted Stock, Stock Option and Equity Compensation Plan (the “2008 Plan”) has been established by A. M. Castle & Co. (“Castle”) to:

 

	
(a)  

	
attract and retain key executive, managerial, supervisory and professional employees;

 

(b) attract and align the interest of directors with the long - term interests of Castle and its stockholders;

 

(c) motivate participating employees to put forth their maximum effort for the continued growth of Castle and its Subsidiaries;

 

	
(d)  

	
further identify Participants’ interests with those of Castle’s shareholders; and

 

(e) provide incentive compensation opportunities which are competitive with those of other corporations in the same industries as Castle and its Subsidiaries;

 

and thereby promote the long-term financial interest of Castle and its Subsidiaries, including the growth in value of Castle’s equity and enhancement of long-term shareholder return.

 

2. Effective Date.  The 2008 Plan became effective upon the ratification by the holders of the majority of those shares present in person or by proxy at Castle’s 2008 annual meeting of its shareholders on April 24, 2008, and was thereafter amended and restated on March 5, 2009.  The 2008 Plan shall be further amended and restated effective as of December 9, 2010. The 2008 Plan shall be limited in duration to ten (10) years and shall expire on April 23, 2018.  In the event of the termination of the 2008 Plan, the 2008 Plan shall remain in effect as long as any awards under it are outstanding.

 

	
3.  

	
Definitions.  The following definitions are applicable to the 2008 Plan:

 

“Board” means the Board of Directors of Castle.

 

“Code” means the Internal Revenue Code of 1986, as amended , and any regulations and other applicable authorities promulgated thereunder .

 

“Committee” means the Human Resources Committee of the Board and its Subcommittee, or such other committee as may be designated from time to time by the Board comprising of at least three (3) or more members of the Board, each of whom shall satisfy such requirements as (a) the U.S. Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 or its successor under the Securities Exchange Act of 1934, as amended,  (b) the New York Stock Exchange may establish pursuant to its rule-making authority; and  (c) the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Code Section 162(m). 

 

 “Director” means any individual who is a  member of the Board and who is not an employee of Castle or any of its Related Companies.   

 

“Equity Performance Award” has the meaning ascribed to it in Part V.

 

“Fair Market Value” of any Stock means, except as otherwise specified in the 2008 Plan or applicable law, as of any date, the closing market composite price for such Stock as reported for the New York Stock Exchange-Composite Transactions on that date or, if Stock is not traded on that date, on the next preceding date on which Stock was traded.

  

  

A. M. Castle & Co. 

Page 2

 

 

 “Fiscal Year”  means the fiscal year of Castle. 

 

“Participant” means any Director or employee of Castle or any Subsidiary who is selected by the Committee to participate in the 2008 Plan.

 

“Related Company” means any corporation during any period in which it is a Subsidiary, or during any period in which it directly or indirectly owns fifty percent (50%) or more of the total combined voting power of all classes of stock of Castle that are entitled to vote.

 

	
  

	
“Restricted Period” has the meaning ascribed to it in Part IV.

 

	
  

	
“Restricted Stock” has the meaning ascribed to it in Part IV.

 

	
  

	
 “  Restricted Stock Units ” has the meaning ascribed to it in Part IV. 

 

	
  

	
“Stock” means A. M. Castle & Co. common stock.

 

	
  

	
“Stock Option” means the right of a Participant to purchase Stock pursuant to an Incentive Stock Option or Non-Qualified Option awarded pursuant to the provision of Part II or Part III.

 

	
  

	
“Subsidiary” means any corporation during any period in which fifty percent (50%) or more of the total combined voting power of all classes of stock entitled to vote is owned, directly or indirectly, by Castle.

 

	
  

	
 “Qualified Retirement” means with respect to an employee a termination from employment from Castle and all of its Related Companies that occurs after the employee attains at least age 65 and completes at least 5 years of continuous service as a full-time employee. 

 

4. Administration.  The authority to manage and control the operation and administration of the 2008 Plan shall be vested in the Committee.  Subject to the provisions of the 2008 Plan, the Committee will have authority to select employees and, with respect to any award other than an Incentive Stock Option , Directors to receive awards hereunder , to determine the time or times of receipt, to determine the types of awards and the number of shares covered by the awards, to establish the terms, conditions, performance criteria, restrictions and other provisions of such awards (including but not limited to the authority to provide that , in the event of certain changes in the beneficial ownership of Castle’s Stock , such awards shall become fully exercisable and/or vested), and to cancel or suspend awards. In making such award determinations, the Committee may take into account the nature of services rendered by the respective employee or Director , his or her present and potential contribution to Castle’s success, and such other factors as the Committee deems relevant.  The Committee is authorized to interpret the 2008 Plan, to establish, amend and rescind any rules and regulations relating to the 2008 Plan, to determine the terms and provisions of any agreements made pursuant to the 2008 Plan and make all other determinations that may be necessary or advisable for the administration of the 2008 Plan.  Any interpretation of the 2008 Plan by the Committee and any decision made by it under the 2008 Plan is final and binding on all persons.

 

5. Participation.  Subject to the terms and conditions of the 2008 Plan, Directors shall participate in the 2008 Plan and the Committee shall determine and designate from time to time, the key executive, managerial, supervisory and professional employees of Castle and its Subsidiaries who will participate in the 2008 Plan.  In the discretion of the Committee, a Participant may be awarded Stock Options, Restricted Stock ,  Restricted Stock Units or Equity Performance Awards, and more than one (1) award may be granted to a Participant.  Except as otherwise agreed to by Castle and the Participant, any award(s) under the 2008 Plan shall not affect any previous award to the Participant under the 2008 Plan or any other plan maintained by Castle or its Subsidiaries.  The Committee may consider all factors that it deems relevant in selecting Participants and in determining the type and amount of their respective  awards granted hereunder .

 

  

  

A. M. Castle & Co.

Page 3

 

 

6. Shares Subject to the 2008 Plan.  The shares of Stock with respect to which awards may be made under the 2008 Plan shall be either authorized and unissued shares or issued and outstanding shares (including, in the discretion of the Board, shares purchased in the market).  Subject to the provisions of paragraph 10 of this Section I, the number of shares of Stock which may be issued with respect to awards under the 2008 Plan , including through Incentive Stock Options, shall not exceed 2,000,000 shares in the aggregate.  If, for any reason, any award under the 2008 Plan otherwise distributable in shares of Stock, or any portion of the award, shall expire, terminate or be forfeited or cancelled, or be settled in cash pursuant to the terms of the 2008 Plan and, therefore, any such shares are no longer distributable under the award, such shares of Stock shall again be available for award to an eligible employee or Director  (including the holder of such former award) under the 2008 Plan.

 

7. Compliance with Applicable Laws and Withholding Taxes.  Notwithstanding any other provision of the 2008 Plan, Castle shall have no liability to issue any shares of Stock under the 2008 Plan unless such issuance would comply with all applicable laws and the applicable requirements of the Security Exchange Commission (“SEC”), New York Stock Exchange, or similar entity.  Prior to the issuance of any shares of Stock under the 2008 Plan, Castle may require a written statement that the recipient is acquiring the shares for investment and not for the purpose or with the intention of distributing the shares.  In the case of a Participant who is subject to Section 16(a) and 16(b) of the Securities Exchange Act of 1934, the Committee may, at any time, add such conditions and limitations to any election to satisfy tax withholding obligations through the withholding or surrender of shares of Stock as the Committee, in its sole discretion, deems necessary or desirable to comply with Section 16(a) or 16(b) and the rules and regulations thereunder or to obtain any exemption therefrom.  All awards and payments under the 2008 Plan are subject to withholding of all applicable taxes, which withholding obligations may be satisfied, with the consent of the Committee, through the surrender of shares of Stock which the Participant already owns, or to which a Participant is otherwise entitled under the 2008 Plan.

 

8. Transferability.  Stock Options, Equity Performance Awards and, during the Restricted Period, Restricted Stock and Restricted Stock Units awarded under the 2008 Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution.  Stock Options may be exercised during the lifetime of the Participant only by the Participant.

 

9. Employment and Shareholder Status.  The 2008 Plan does not constitute a contract of employment and selection as a Participant does not give any employee the right to be retained in the employ of Castle or any Subsidiary.  No award under the 2008 Plan shall confer upon the holder thereof any right as a shareholder of Castle prior to the date on which he fulfills all service requirements and other conditions for receipt of shares of Stock.  If the redistribution of shares is restricted pursuant to paragraph 7 above, certificates representing such shares may bear a legend referring to such restrictions.

 

10. Adjustments to Number of Shares Subject to the 2008 Plan.  In the event of any change in the outstanding shares of Stock of Castle by reason of any stock dividend, split, spinoff, recapitalization, merger, consolidation, combination, exchange of shares or other similar change, the aggregate number of shares of Stock with respect to which awards may be made under the 2008 Plan, and the terms and the number of shares of any outstanding Stock Options , Restricted Stock , Restricted Stock Units, or other equity-based  awards granted by the Committee under the 2008 Plan  shall be equitably adjusted by the Committee.  Any such adjustment in any outstanding option shall be made without change in the aggregate option price applicable to the unexercised portion of such option but with a corresponding adjustment in the price for each share covered by such option as well as the adjustment in the number and kind of Stock Options mentioned above.  Adjustments under this paragraph 10 shall be made by the Committee, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive.  In no event shall the exercise price for a Stock Option be adjusted below the par value of such Stock, nor shall any fraction of a share be issued upon the exercise of an option.

 

11. Agreement with Company.  At any time of any awards under the 2008 Plan, the Committee will require a Participant to enter into an agreement with Castle in a form specified by the Committee, agreeing to the terms and conditions of the 2008 Plan and to such additional terms and conditions, not inconsistent with the 2008 Plan, as the Committee may, in its sole discretion, prescribe.

 

  

  

A. M. Castle & Co.

Page 4

 

 12.   Code Section 162(m).   The 2008 Plan is designed and intended, and all provisions shall be construed in a manner, to comply, to the extent applicable, with Code   Section 162(m) .  To the extent permitted by Code Section 162(m), the Committee shall have sole discretion to reduce or  eliminate or defer payment of the amount of any award which might otherwise become payable upon attainment of a performance measure.   Subject to the provisions of paragraph 6 of this Section I, awards that are designed to comply with the performance-based exception from the tax deductibility limitation of  Code  Section 162(m)  shall be subject to the following rules: 

 

 (a)   The number of shares of Stock that may be granted in the form of Stock Options in a single Fiscal Year to a Participant may not exceed  400,000 shares , as adjusted pursuant to   paragraph 10 of this Section I . 

 

 (b)   The number of shares of Stock that may be granted in the form of Restricted Stock or Restricted Stock Units in a single Fiscal Year to a Participant may not exceed 400,000 shares , as adjusted pursuant to   paragraph 10 of this Section I . 

 

 (c)   The number of shares of Stock that may be granted in the form of stock appreciation rights (SARs) in a single Fiscal Year to a Participant may not exceed  400,000 shares , as adjusted pursuant to   paragraph 10 of this Section I . 

 

 (d)   The number of shares of Stock that may be granted in the form of Equity Performance Awards in a single Fiscal Year to a Participant may not exceed  400,000 shares , as adjusted pursuant to   paragraph 10 of this Section I . 

 

 (e)   The maximum amount that may be paid to a Participant for Equity Performance Awards granted in a single Fiscal Year to the Participant may not exceed $2,000,000. 

 

 13.   Code Section 409A.  Payments and benefits under the 2008 Plan are intended to be exempt from Code Section 409A.  If and to the extent any such payment or benefit is determined to be subject to Code Section 409A, such payment or benefit shall comply with Code Section 409A, including, without limitation, the 6-month payment delay applicable to a specified employee (within the meaning of Code Section 409A), and, accordingly, to the maximum extent permitted, such payment or benefit shall be paid or provided under such other conditions determined by Committee that cause such payment or benefit to be in compliance with, or not be subject to, Code Section 409A and the 2008 Plan shall be construed and administered accordingly to achieve that objective.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original economic benefit to the Participant of the applicable provision without violating the provisions of Code Section 409A.  Castle makes no representation that any or all of the payments or benefits provided under the 2008 Plan will be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to any such payments or benefits.  In no event whatsoever shall Castle be liable for any additional tax, interest or penalty that may be imposed on a Participant by Code Section 409A or damages for failing to comply with Code Section 409A. 

 

 14.  Amendment and Termination of 2008 Plan.  Subject to the following limitation of this paragraph 14 , the Board may at any time amend, suspend, or terminate the 2008 Plan.  No amendment of the 2008 Plan and, except as provided in paragraph 10 above, no action by the Board or the Committee shall, without further approval of the shareholders of Castle, increase the total number of shares of Stock with respect to which awards may be made under the 2008 Plan , materially amend the 2008 Plan , or otherwise amend the 2008 Plan if shareholder approval is required under applicable law .  No amendment, suspension, or termination of the 2008 Plan shall alter or impair any Stock Option , Restricted Stock , Restricted Stock Units, or other equity based awards previously awarded under the 2008 Plan without the consent of the holder thereof.

 

 15.   Applicable Law.  To the extent not preempted by or inconsistent with federal law, the laws of the State of  Maryland, without regard to the conflict of law provisions of any jurisdiction, shall apply and govern the interpretation and administration of the 2008 Plan. 

 

  

  

A. M. Castle & Co.

Page 5

 

 16.   Severability .   The invalidity or unenforceability of any provision of the 2008 Plan will not affect the validity or enforceability of any other provisions of the 2008 Plan, and the 2008 Plan will be construed as if such invalid or unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified). 

 

 17.   Prohibition on Repricing.  Except in connection with any corporate transaction involving Castle (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding awards may not be amended to reduce the exercise price of outstanding Stock Options or SARs or cancel outstanding Stock Options or SARs in exchange for cash, other awards or Stock Options or SARs with an exercise price that is less than the exercise price of the original Stock Options or SARs without shareholder approval. 

 

II.  INCENTIVE STOCK OPTIONS

 

1. Definitions.  The award of an Incentive Stock Option under the 2008 Plan entitles the Participant to purchase shares of Stock at a price fixed at the time the option is awarded, subject to the following terms of this Section II.

 

2. Eligibility.  The Committee shall designate the Participants to whom Incentive Stock Options, as described in Section 422(b) of the Code or any successor section thereto, are to be awarded under the 2008 Plan and shall determine the number of option shares to be offered to each of them.   Incentive Stock Options shall not be granted to Directors.   In no event shall the aggregate Fair Market Value (determined at the time the option is awarded and taking options into account in the order granted) of Stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year (under all plans of Castle and all of its Related Companies) exceed One Hundred Thousand Dollars ($100,000).    Notwithstanding any provision in the 2008 Plan to the contrary, no term of the 2008 Plan relating to Incentive Stock Options shall be interpreted, amended, or altered, nor shall any discretion or authority granted under the 2008 Plan be exercised so as to disqualify the 2008 Plan under Code Section 422, or, without the consent of the affected Participant, to cause any Incentive Stock Option previously granted to fail to qualify for the federal income tax treatment afforded under Code Section 421. 

 

3. Price.  The purchase price of a share of Stock under each Incentive Stock Option shall be determined by the Committee ; provided, however, that in no event shall such price be less than the greater of (a) one hundred percent (100%) of the average Fair Market Value of a share of Stock for the ten (10) trading days preceding the date on which the option is granted  (one hundred ten percent (110%) of Fair Market Value with respect to Participants who at the time of the award are deemed to own at lest ten percent (10%) of the voting power of Castle); or (b) the par value of a share of Stock on such date.  To the extent provided by the Committee, the full purchase price of such share of Stock purchased upon the exercise of any Incentive Stock Option shall be paid in cash or in shares of Stock (valued at Fair Market Value as of the date of exercise), or in any combination thereof, at the time of such exercise and, as soon as practicable thereafter, a certificate representing the shares so purchased shall be delivered to the person entitled thereto.  Notwithstanding the foregoing provisions of this paragraph 3, the Committee may, in its sole discretion, by the terms of the agreement granting Stock Options to a Participant, or thereafter, permit Incentive Stock Options to be exercised by a Participant through one (1) or more loans from a stock brokerage firm upon assurance from the brokerage firm that any such loans shall be made in accordance with applicable margin requirements.

 

4. Exercise.  The Committee may impose such rules relating to the time and manner in which Incentive Stock Options may be exercised as the Committee deems appropriate; provided, however, that no Incentive Stock Option may be exercised by a Participant (a) prior to the date on which he completes one continuous year of employment with Castle or any Related Company after the date of the award thereof; or (b) after the Expiration Date applicable to that option.

 

5. Option Expiration Date.  The “Expiration Date” with respect to an Incentive Stock Option on any portion thereof awarded to a Participant under the 2008 Plan means the earliest of:

(a) the date that is  ten (10) years after the date on which the Incentive Stock Option is awarded (five (5) years with respect to Participants who at the time of the award are deemed to own at least ten percent (10%) of the voting power of Castle);

 

(b) the date that is three (3) months after the Participant’s continuous employment with Castle and all of its Related Companies terminates (for any reason other than the Participant’s death) , except in the case of disability (within the meaning of Code Section 22(e)(3)), the first anniversary of the date of such disability; or

 

 

A. M. Castle & Co.

Page 6

(c) the date established by the Committee, or the date determined under a method established by the Committee, at the time of the award.

 

All rights to purchase shares of Stock pursuant to an Incentive Stock Option shall cease as of such option’s Expiration Date.

 

III. NON-QUALIFIED STOCK OPTIONS

 

1. Definition.  The award of a Non-Qualified Stock Option under the 2008 Plan entitles the Participant to purchase shares of Stock at a price fixed at the time the option is awarded, subject to the following terms of this Section III.

 

2. Eligibility.  The Committee shall designate the Participants to whom Non-Qualified Stock Options are to be awarded under the 2008 Plan and shall determine the number of option shares to be offered to each of them.  

 

3. Price.  The purchase price of a share of Stock under each Non-Qualified Stock Option shall be determined by the Committee; provided however, that in no event shall such price be less than the greater of (a) one hundred percent (100%) of the average Fair Market Value of a share of Stock for the ten (10) trading days preceding the date on which the option is granted ; provided the recipient of the option, the number of shares of Stock that are subject to the option, and such average Fair Market Value of a share of Stock must be designated by the Committee before the beginning of the ten (10) trading day averaging period preceding the date on which the option is granted; or (b) the par value of a share of such Stock on such date.  To the extent provided by the Committee, the full purchase price of each share of Stock purchased upon the exercise of any Non-Qualified Stock Option shall be paid in cash or in shares of Stock (valued at Fair Market Value as of the day of exercise), or in any combination thereof, at the time of such exercise and; as soon as practicable thereafter, a certificate representing the shares so purchased shall be delivered to the person entitled thereto.  Notwithstanding the foregoing provisions of this paragraph 3, the Committee may, in its sole discretion, by the terms of the agreementgranting Non-Qualified Stock Options permit Non-Qualified Stock Options to be exercised by a Participant through one (1) or more loans from a stock brokerage firm upon assurance from the brokerage firm that any such loans shall be made in accordance with applicable margin requirements.  Upon the exercise of an option or part thereof, the full option price of the Stock purchased pursuant to the exercise of a stock option together with any required state or federal withholding taxes shall be paid in the form of: (a) cash, certified check, bank draft or postal or express money order made payable to the order of Castle; or (b) Stock at the Fair Market Value.

 

4. Exercise.  The Committee may impose such rules relating to the time and manner in which Non-Qualified Stock Options may be exercised as the Committee deems appropriate; provided, however, that no Non-Qualified Stock Option may be exercised by a Participant (a) prior to the date on which the Participant completes one (l) continuous year of employment with Castle or any Related Company after the date of the award thereof, or in the case of a Director, on the first anniversary of the date of the award; or (b) after the Expiration Date applicable to that option.

 

5. Option Expiration Date.  The “Expiration Date” with respect to a Non-Qualified Stock Option or any portion thereof awarded to a Participant under the 2008 Plan means the earliest of:

 

	
(a)  

	
the date that is  ten (10) years after the date on which the Non-Qualified Option is awarded;

 

 (b)   in the case of an employee, the date, if any, on which the Participant’s continuous employment with Castle and all of its Related Companies terminates, except in the case of a Qualified R etirement or a total and permanent disability (as defined by Castle’s long term disability programs) , the third anniversary of the date of such Qualified R etirement or total and permanent disability ; 

 

(c) the date established by the Committee, or the date determined under a method established by the Committee, at the time of the award ; or 

 

(d) in the case of a Director, the date the Director resigns from the Board, or in the event the Director retires at or after attaining retirement age (as determined under the applicable policy established by the Board) or becomes totally and permanently disabled (as defined by Castle’s long term disability programs) , the third anniversary of such retirement or disability.

 

All rights to purchase shares of Stock pursuant to a Non-Qualified Stock Option shall cease as of such option’s Expiration Date.

  

A. M. Castle & Co.

Page 7

 

IV.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS 

 

1. Definition.  Restricted Stock and Restricted Stock Units awards are grants of Stock or units for Restricted Stock, respectively, to Participants, the vesting of which is subject to a required period of   employment or service , any other conditions or performance criteria established by the Committee, or any combination thereof, subject to the following terms of this Section IV.

 

2. Eligibility.  The Committee shall designate the Participants to whom Restricted Stock or Restricted Stock Units are to be awarded and the number of shares of Stock that are subject to the award . 

 

3. Terms and Conditions of Awards.  All shares of Restricted Stock or Restricted Stock Units awarded to Participants under the 2008 Plan shall be subject to the following terms and conditions and to such other terms and conditions, not inconsistent with the 2008 Plan, as shall be prescribed by the Committee in its sole discretion and as shall be contained in the agreement referred to in paragraph 11 of Section I.

 

(a) Restricted Stock or Restricted Stock Units awarded to Participants may not be sold, assigned, transferred, pledged or otherwise encumbered, except as hereinafter provided, for a period determined by the Committee after the time of the award of such stock (the “Restricted Period”).  Except for such restrictions, with respect to all shares of Restricted Stock awarded under the 2008 Plan, the Participant as owner of such Restricted Stock shall have all the rights of a shareholder, including but not limited to the right to vote such Restricted Stock and, except as otherwise provided by the Committee, the right to receive all dividends paid on such  Restricted Stock during the Restricted Period .

 

(b) The Committee may, in its discretion, at any time after the date of the award of Restricted Stock or Restricted Stock Units adjust the length of the Restricted Period to account for individual circumstances of a Participant or group of Participants, but in no case shall the length of the Restricted Period be less than one (1) year.

 

(c) Except as otherwise determined by the Committee in its sole discretion, a Participant whose employment or service with Castle and all of its Related Companies terminates prior to the end of the Restricted Period for any reason shall forfeit all shares of Restricted Stock or Restricted Stock Units remaining subject to any outstanding Restricted Stock or Restricted Stock Unit award.

 

(d) Each certificate issued in respect of shares of Restricted Stock awarded under the 2008 Plan shall be registered in the name of the Participant and, at the discretion of the Committee, each such certificate may be deposited in a bank designated by the Committee.  Each such certificate shall bear the following  (or a similar) legend;

 

“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in the A. M. Castle & Co. 2008 Restricted Stock , Stock Option and Equity Compensation Plan and an agreement entered into between the registered owner and A. M. Castle & Co.  A copy of such Plan and agreement is on file in the office of the Secretary of A. M. Castle & Co., 3400 N. Wolf Road, Franklin Park, Illinois 60131.”

 

(e) At the end of the Restricted Period for Restricted Stock, and subject to satisfaction of the applicable vesting provisions, such Restricted Stock will be transferred free of all restrictions to the Participant (or his or her legal representative, beneficiary or heir). At the end of the Restricted Period for Restricted Stock Units, and subject to satisfaction of the applicable vesting provisions, payment will be made in cash, stock or other equity based property or any combination thereof. 

 

V.  EQUITY PERFORMANCE AWARDS

 

1. Definition.  Equity Performance Awards (“P-Awards”) are grants of Stock Appreciation Rights (SAR), phantom stock, stock , stock units (other than Restricted Stock Units) and cash, or any combination thereof, the vesting of which is subject to a required period of employment, the attainment of certain designated measures of c ompany or personal performance objectives and any other conditions established by the Committee, subject to the following terms of this Section V.

 

2. Eligibility.  The Committee shall designate the Participants to whom P-Awards are to be awarded and the number of shares of Stock that underlay or are contingent on the P-Awards and any stock delivered pursuant thereto.

  

A. M. Castle & Co.

Page 8

 

3. Terms and Conditions of Awards.  All Participants under the 2008 Plan shall be subject to the following terms and conditions and to such other terms and conditions, not inconsistent with the 2008 Plan, as shall be prescribed by the Committee in its sole discretion and as shall be contained in the agreement referred to in paragraph 11 of Section I.

 

(a) P-Awards ,  which might otherwise become payable upon attainment of one or more performance measures , shall have the performance measure or measures  designated by the Committee based , in whole or part , among any or a combination of the following: gross profit on sales, material gross profit (gross profit on material portion of sales), DSO (days sales outstanding on receivables), DSI (days sales outstanding on inventory), working capital employed, purchase variance, delivery variance, sales, earnings, earnings per share, pre-tax earnings, share price (including, but not limited to, total shareholder return, relative total shareholder return and other measures of shareholder value creation), return on equity, return on investments, and asset management, and may include or exclude specified items of an unusual, non-recurring or extraordinary nature including, without limitation, changes in accounting methods, changes in inventory methods, changes in corporate taxation, unusual accounting gains and losses, changes in financial accounting standards or other extraordinary events causing dilution or diminution in Castle’s earnings.  Performance objectives need not be the same for all  Participants , and may be established for Castle as a whole or for its various groups, divisions, subsidiaries and affiliates.  The Committee at the time of establishing performance objectives may prescribe adjustments to the otherwise applicable performance measures in the event of certain changes in the beneficial ownership of Castle’s Stock, establish a minimum performance target (including adjustments thereto in the event of certain changes in the beneficial ownership of Castle’s Stock), and provide for reduced payment if the performance objective is not achieved but the minimum performance target is met.

 

(b) The period for performance for P-Awards may not be less than three (3) years, subject to acceleration in the event of certain changes in the beneficial ownership of Castle’s Stock, as determined by the Committee in its sole discretion. 

 

(c) P-Awards to Participants may not be sold, assigned, transferred, pledged or otherwise encumbered.

 

(d) The Committee may, in its discretion, at any time after the date of the P-Award adjust the length of the designated period a Participant must hold any Stock delivered in accordance with the vesting of an award to account for individual circumstances of a Participant or group of Participants, but in no case shall the length of such period be less than one (1) year.

 

(e) Except as otherwise determined by the Committee in its sole discretion, a Participant whose employment or service with Castle and all of its Related Companies terminates prior to the end of any vesting period or fails to achieve the applicable performance measures for any reason shall forfeit all P-Awards remaining subject to any such vesting period or applicable performance  measures .

 

(f) Upon satisfaction of the applicable vesting conditions and the applicable performance measures , as appropriate, the P-Award will fully vest and not be forfeited.  Payment will be made in cash, stock or other equity based property or any combination thereof.Exhibit 4.7

THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES LAWS AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
(1) AN EFFECTIVE REGISTRATION STATEMENT COVERING SUCH SECURITIES UNDER THE
SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

IN ADDITION, THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
OR HYPOTHECATED, OR BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT,
OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF
SUCH SECURITIES BY ANY PERSON FOR A PERIOD OF SIX (6) MONTHS IMMEDIATELY
FOLLOWING THE DATE OF EFFECTIVENESS OF THE COMPANY’S REGISTRATION STATEMENT
NO.: 333-164791 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, EXCEPT IN
ACCORDANCE WITH FINRA RULE 5110(G)(2).

WAVE2WAVE
COMMUNICATIONS, INC.

UNDERWRITER’S WARRANT

 [                     ] shares of Common Stock

____________, 2010

          This UNDERWRITER’S WARRANT (this “Warrant”) of Wave2Wave Communications, Inc., a corporation
duly organized and validly existing under the laws of the State of Delaware
(the “Company”), is being issued
pursuant to that certain Underwriting Agreement, dated as of ______________,
2010 (the “Underwriting Agreement”),
by and among the Company and Aegis Capital Corp., as the representative of the
underwriters named therein (the “Representatives”)
relating to a firm commitment public offering (the “Offering”) of ______ shares (the “Shares”) of Common Stock, $0.0001 par value per share (the “Common Stock”) and _____ warrants (the “Warrant”)
to purchase shares Common Stock, of the Company, underwritten by the
Representative and the underwriters named in the Underwriting Agreement.

          FOR
VALUE RECEIVED, the Company hereby grants to _____ and
its permitted successors and assigns (collectively, the “Holder”) the right to purchase from the
Company up to _____ (____) shares of Common Stock [3% of number of Shares sold]
(such shares underlying this Warrant, the “Warrant
Shares”), at a per share purchase price equal to $5.80 (the “Exercise Price”), subject to the terms,
conditions and adjustments set forth below in this Warrant.

          1. Date
of Warrant Exercise. This Warrant shall become exercisable on the date that
is one (1) year from the Base Date (the “Exercise
Date”). As used in this Warrant, the term “Base Date” shall mean _____, 2010 (the
effective date of the Post-Effective Amendment to the Registration Statement –
File No.333-164791). Except as otherwise provided for herein or as permitted by
applicable rules of the Financial Industry Regulatory Authority, Inc., this
Warrant shall not be sold, transferred, assigned, pledged or hypothecated prior
to the Exercise Date.

          2. Expiration
of Warrant. This Warrant shall expire on the five (5) year anniversary of
the Base Date (the “Expiration Date”).

          3. Exercise
of Warrant. This Warrant shall be exercisable pursuant to the terms of this
Section 3.

                    3.1
Manner of Exercise.

                    (a)
This Warrant may only be exercised by the Holder hereof on or after the
Exercise Date and on or prior to the Expiration Date, in accordance with the
terms and conditions hereof, in whole or in part (but not as to fractional
shares) with respect to any portion of this Warrant, during the Company’s
normal business hours on any day other than a Saturday or a Sunday or a day on
which commercial banking institutions in New York, New York are authorized by
law to be closed (a “Business Day”),
by surrender of this Warrant to the Company at its office maintained pursuant
to Section 10.2(a) hereof, accompanied by a written exercise notice in the form
attached as Exhibit A to this Warrant (or a reasonable facsimile
thereof) duly executed by the Holder, together with the payment of the
aggregate Exercise Price for the number of Warrant Shares purchased upon
exercise of this Warrant. Upon surrender of this Warrant, the Company shall
cancel this Warrant document and shall, in the event of partial exercise,
replace it with a new Warrant document in accordance with Section 3.3

                    (b)
Except as provided for in Section 3.1(c) below, each exercise of this Warrant
must be accompanied by payment in full of the aggregate Exercise Price in cash
by check or wire transfer in immediately available funds for the number of
Warrant Shares being purchased by the Holder upon such exercise.

                    (c)
The aggregate Exercise Price for the number of Warrant Shares being purchased
may also, in the sole discretion of the Holder, be paid in full or in part on a
“cashless basis” at the election of the Holder:

                    (i)
in the form of Common Stock owned by the Holder (based on the Fair Market Value
(as defined below) of such Common Stock on the date of exercise);

                    (ii)
in the form of Warrant Shares withheld by the Company from the Warrant Shares
otherwise to be received upon exercise of this Warrant having an aggregate Fair
Market Value on the date of exercise equal to the aggregate Exercise Price of
the Warrant Shares being purchased by the Holder; or

                    (iii)
by a combination of the foregoing, provided that the combined value of all cash
and the Fair Market Value of any shares surrendered to the Company is at least
equal to the aggregate Exercise Price for the number of Warrant Shares being
purchased by the Holder.

                    For
purposes of this Warrant, the term “Fair
Market Value” means with respect to a particular date, the average
closing price of the Common Stock for the five (5) trading days immediately
preceding the applicable exercise date herein as officially reported by the
principal securities exchange on which the Common Stock is then listed or
admitted to trading, or, if the Common Stock is not listed or admitted to
trading on any securities exchange as determined in good faith by resolution of
the Board of Directors of the Company, based on the best information available
to it.

                    For
purposes of illustration of a cashless exercise of this Warrant under Section
3.1(c)(ii) (or for a portion thereof for which cashless exercise treatment is
requested as contemplated by Section 3.1(c)(iii) hereof), the calculation of
such exercise shall be as follows:

	
  

 	
  

 	
  

 
	
 X = Y
 (A-B)/A

 
	
  

 
	
 where:

 
	
  

 	
  

 	
  

 
	
  

 	
 X =

 	
 the number of Warrant Shares to be issued to the Holder (rounded to
 the nearest whole share).

 
	
  

 	
  

 	
  

 
	
  

 	
 Y =

 	
 the number of Warrant Shares with respect to which this Warrant
 is being exercised.

 
	
  

 	
  

 	
  

 
	
  

 	
 A =

 	
 the Fair Market Value of the Common Stock.

 
	
  

 	
  

 	
  

 
	
  

 	
 B =

 	
 the Exercise Price.

 

                    (d)
For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended,
understood, and acknowledged that the Common Stock issuable upon exercise of
this Warrant in a cashless exercise transaction as described in Section 3.1(c)
above shall be deemed to have been acquired at the time this Warrant was
issued. Moreover, it is intended, understood, and acknowledged that the holding
period for the Common Stock issuable upon exercise of this Warrant in a
cashless exercise transaction as described in Section 3.1(c) above shall be
deemed to have commenced on the date this Warrant was issued.

                    3.2
When Exercise Effective. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been duly surrendered to the
Company as provided in Sections 3.1 and 12 hereof, and, at such time, the
Holder in whose name any certificate or certificates for Warrant Shares shall
be issuable upon exercise as provided in Section 3.3 hereof shall be deemed to
have become the holder or holders of record thereof of the number of Warrant
Shares purchased upon exercise of this Warrant.

                    3.3
Delivery of Common Stock Certificates and New Warrant. As soon as
reasonably practicable after each exercise of this Warrant, in whole or in
part, and in any event within five (5) Business Days thereafter, 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 hereof or,
subject to Sections 9 and 10 hereof, as the Holder (upon payment by the Holder
of any applicable transfer taxes) may direct:

                    (a)
a certificate or certificates (with appropriate restrictive legends, as
applicable) for the number of duly authorized, validly issued, fully paid and
nonassessable Warrant Shares to which the Holder shall be entitled upon
exercise; and

                    (b)
in case exercise is in part only, a new Warrant document of like tenor, dated
the date hereof, for the remaining number of Warrant Shares issuable upon
exercise of this Warrant after giving effect to the partial exercise of this
Warrant (including the delivery of any Warrant Shares as payment of the
Exercise Price for such partial exercise of this Warrant).

          4. Certain
Adjustments. For so long as this Warrant is outstanding:

                    4.1
Mergers or Consolidations. If at any time after the date hereof there
shall be a capital reorganization (other than a combination or subdivision of
Common Stock otherwise provided for herein) resulting in a reclassification to
or change in the terms of securities issuable upon exercise of this Warrant (a
“Reorganization”), or a merger or
consolidation of the Company with another corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or a governmental agency (a “Person” or the “Persons”)
(other than a merger with another Person in which the Company is a continuing
corporation and which does not result in any reclassification or change in the
terms of securities issuable upon exercise of this Warrant or a merger effected
exclusively for the purpose of changing the domicile of the Company) (a “Merger”), then, as a part of such
Reorganization or Merger, lawful provision and adjustment shall be made so that
the Holder shall thereafter be entitled to receive, upon exercise of this
Warrant, the number of shares of stock or any other equity or debt securities
or property receivable upon such Reorganization or Merger by a holder of the
number of shares of Common Stock which might have been purchased upon exercise
of this Warrant immediately prior to such Reorganization or Merger. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Warrant with respect to the rights and interests of the Holder after
the Reorganization or Merger to the end that the provisions of this Warrant
(including adjustment of the Exercise Price then in effect and the number of
Warrant Shares) shall be applicable after that event, as near as reasonably may
be, in relation to any shares of stock, securities, property or other assets
thereafter deliverable upon exercise of this Warrant. The provisions of this
Section 4.1 shall similarly apply to successive Reorganizations and/or Mergers.

                    4.2
Splits and Subdivisions; Dividends. In the event the Company should at
any time or from time to time effectuate a split or subdivision of the
outstanding shares of Common Stock or pay a dividend in or make a distribution
payable in additional shares of Common Stock or Common Stock Equivalents
without payment of any consideration by such holder for the additional shares
of Common Stock or Common Stock Equivalents (including the 

additional shares of Common Stock issuable upon conversion or exercise
thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share
Exercise Price shall be appropriately decreased and the number of Warrant
Shares shall be appropriately increased in proportion to such increase (or
potential increase) of outstanding shares; provided, however, that no adjustment
shall be made in the event the split, subdivision, dividend or distribution is
not effectuated.

                    4.3
Combination of Shares. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, the per share Exercise Price shall be
appropriately increased and the number of shares of Warrant Shares shall be
appropriately decreased in proportion to such decrease in outstanding shares.

                    4.4
Adjustments for Other Distributions. In the event the Company shall
declare a distribution payable in securities of other Persons, evidences of
indebtedness issued by the Company or other Persons, assets (excluding cash
dividends or distributions to the holders of Common Stock paid out of current
or retained earnings and declared by the Company’s board of directors) or
options or rights not referred to in Sections 4.2, 4.3 or 4.4, then, in each
such case for the purpose of this Section 4.5, upon exercise of this Warrant,
the Holder shall be entitled to a proportionate share of any such distribution
as though the Holder was the actual record holder of the number of Warrant
Shares as of the record date fixed for the determination of the holders of Common
Stock of the Company entitled to receive such distribution.

          5. No
Impairment. The Company will not, by amendment of its articles of
incorporation or by-laws or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all of the terms and in the taking of all actions necessary or
appropriate in order to protect the rights of the Holder against impairment.

          6. Chief
Financial Officer’s Report as to Adjustments. With respect to each
adjustment pursuant to Section 4 of this Warrant, the Company, at its expense,
will promptly compute the adjustment or re-adjustment in accordance with the
terms of this Warrant and cause its Chief Financial Officer to certify the
computation (other than any computation of the fair value of property of the
Company, as the case may be) and prepare a report setting forth, in reasonable
detail, the event requiring the adjustment or re-adjustment and the amount of
such adjustment or re-adjustment, the method of calculation thereof and the
facts upon which the adjustment or re-adjustment is based, and the Exercise
Price and the number of Warrant Shares or other securities purchasable
hereunder after giving effect to such adjustment or re-adjustment, which report
shall be mailed by first class mail, postage prepaid to the Holder. The Company
will also keep copies of all reports at its office maintained pursuant to
Section 10.2(a) hereof and will cause them to be available for inspection at
the office during normal business hours upon reasonable notice by the Holder or
any prospective purchaser of the Warrant designated by the Holder thereof.

          7. Reservation
of Shares. The Company shall, solely for the purpose of effecting the
exercise of this Warrant, at all times during the term of this Warrant, reserve
and keep available out of its authorized shares of Common Stock, free from all
taxes, liens and charges with respect to the issue thereof and not subject to
preemptive rights or other similar rights of shareholders of the Company, such
number of its shares of Common Stock as shall from time to time be sufficient
to effect in full the exercise of this Warrant. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to
effect in full the exercise of this Warrant, in addition to such other remedies
as shall be available to Holder, the Company will promptly take such corporate
action as may, in the opinion of its counsel, be necessary to increase the
number of authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes, including without limitation,
using its Reasonable Best Efforts (as defined in Section 14 hereof) to obtain
the requisite shareholder approval necessary to increase the number of
authorized shares of Common Stock. The Company hereby represents and warrants
that all shares of Common Stock issuable upon exercise of this Warrant shall be
duly authorized and, when issued and paid for upon exercise, shall be validly
issued, fully paid and nonassessable.

          8. Registration
and Listing.

                    8.1
Definition of Registrable Securities; Majority. As used herein, the term
“Registrable Securities” means any
shares of Common Stock issuable upon the exercise of this Warrant, until the
date (if any) on which such shares shall have been transferred or exchanged and
new certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the Securities
Act or any similar state law then in force. For purposes of this Warrant, the
term “Majority”, in reference to
the holders of Registrable Securities, shall mean in excess of fifty percent
(50%) of the then outstanding Warrant Shares (assuming the exercise of the
entire Warrant) that: (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, Persons acting as nominees or in conjunction therewith
and (ii) have not be resold to the public pursuant to a registration statement
filed under the Securities Act.

                    8.2
Incidental Registration Rights.

                    (a)
If the Company, at any time on or after the Base Date through the fifth
anniversary of the Base Date, proposes to register any of its securities under
the Securities Act (other than in connection with a registration on Form S-4 or
S-8 or any successor forms) whether for its own account or for the account of
any holder or holders of its shares other than Registrable Securities (any
shares of such holder or holders (but not those of the Company and not
Registrable Securities) with respect to any registration are referred to herein
as, “Other Shares”), the Company
shall each such time give prompt (but not less than thirty (30) days prior to
the anticipated effectiveness thereof) written notice to the holders of
Registrable Securities of its intention to do so. Upon the written request of
any such holder of Registrable Securities made within ten (10) days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder), except as set forth in
Section 8.2(b), the Company will use its Reasonable Best Efforts to effect the
registration under the

Securities Act of all of the Registrable Securities which the Company
has been so requested to register by such holder, to the extent requisite to
permit the disposition of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register; provided, however, that if, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason in its sole
discretion either to not register, to delay or to withdraw registration of such
securities, the Company may, at its election, give written notice of such
determination to such holder and, thereupon: (i) in the case of a determination
not to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), (ii) in
the case of a determination to delay registration, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities (including the Other Shares), and (iii) in
the case of a determination to withdraw registration, shall be permitted to
withdraw registration. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities pursuant to this
Section 8.2. 

                    (b)
If the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by this Section 8.2 and such securities are to
be distributed by or through one or more underwriters, the Company will, if
requested by a holder of Registrable Securities, use its Reasonable Best
Efforts to arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder among the securities to be distributed
by such underwriters, provided that if the managing underwriter of such
underwritten offering shall inform the Company by letter of its belief that
inclusion in such distribution of all or a specified number of such securities
proposed to be distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such letter to state the basis of such belief and the approximate number of
such Registrable Securities, such Other Shares and shares held by the Company
proposed so to be registered which may be distributed without such effect),
then the Company may, upon written notice to such holder, the other holders of
Registrable Securities, and holders of such Other Shares, reduce pro rata in
accordance with the number of shares of Common Stock desired to be included in
such registration (if and to the extent stated by such managing underwriter to
be necessary to eliminate such effect) the number of such Registrable
Securities and Other Shares the registration of which shall have been requested
by each holder thereof so that the resulting aggregate number of such
Registrable Securities and Other Shares so included in such registration,
together with the number of securities to be included in such registration for
the account of the Company, shall be equal to the number of shares stated in
such managing underwriter’s letter. 

                    8.3
Registration Procedures. Whenever the holders of Registrable Securities
have properly requested that any Registrable Securities be registered pursuant
to the terms of this Warrant, the Company shall use its Reasonable Best Efforts
to effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible: 

                    (a)
prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use its Reasonable Best Efforts to cause such
registration statement to become effective; 

                    (b)
notify such holders of the effectiveness of each registration statement filed
hereunder and prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to (i) keep such registration statement effective and the
prospectus included therein usable for a period commencing on the date that
such registration statement is initially declared effective by the SEC and
ending on the date when all Registrable Securities covered by such registration
statement have been sold pursuant to the registration statement or cease to be
Registrable Securities, and (ii) comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement; 

                    (c)
furnish to such holders such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such holders; 

                    (d)
use its Reasonable Best Efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
as such holders reasonably request and do any and all other acts and things
which may be reasonably necessary or advisable to enable such holders to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such holders; provided, however,
that the Company shall not be required to: (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this subparagraph; (ii) subject itself to taxation in any such jurisdiction; or
(iii) consent to general service of process in any such jurisdiction; 

                    (e)
notify such holders, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement contains
an untrue statement of a material fact or omits any material fact necessary to
make the statements therein, in light of the circumstances in which they are
made, not materially misleading, and, at the reasonable request of such
holders, the Company shall prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances in which they are made, not materially
misleading; 

                    (f)
provide a transfer agent and registrar for all such Registrable Securities not
later than the effective date of such registration statement; 

                    (g)
make available for inspection by any underwriter participating in any
disposition pursuant to such registration statement, and any attorney,
accountant or other agent 

retained
by any such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, managers, employees and independent accountants to supply all
information reasonably requested by any such underwriter, attorney, accountant
or agent in connection with such registration statement; 

                    (h)
otherwise use its Reasonable Best Efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable, an earnings statement of the Company, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and, at the option of the Company, Rule 158 thereunder; 

                    (i)
in the event of the issuance of any stop order suspending the effectiveness of
a registration statement, or of any order suspending or preventing the use of
any related prospectus or suspending the qualification of any Registrable
Securities included in such registration statement for sale in any
jurisdiction, the Company shall use its Reasonable Best Efforts promptly to
obtain the withdrawal of such order; 

                    (j)
use its Reasonable Best Efforts to cause any Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities; and 

                    (k)
if the offering is underwritten, use its Reasonable Best Efforts to furnish on
the date that Registrable Securities are delivered to the underwriters for sale
pursuant to such registration, an opinion dated such date of counsel
representing the Company for the purposes of such registration, addressed to
the underwriters covering such issues as are reasonably required by such
underwriters. 

                    8.4
Listing. The Company shall secure the listing of the Common Stock
underlying this Warrant upon each national securities exchange or automated
quotation system upon which shares of Common Stock are then listed or quoted
(subject to official notice of issuance) and shall maintain such listing of
shares of Common Stock. The Company shall at all times comply in all material
respects with the Company’s reporting, filing and other obligations under the
by-laws or rules of The Nasdaq Capital Market (or such other national
securities exchange or market on which the Common Stock may then be listed, as
applicable). 

                    8.6
Expenses. The Company shall pay all Registration Expenses relating to
the registration and listing obligations set forth in this Section 8. For
purposes of this Warrant, the term “Registration
Expenses” means: (a) all registration, filing and FINRA (as defined
below) fees, (b) all reasonable fees and expenses of complying with securities
or blue sky laws, (c) all word processing, duplicating and printing expenses,
(d) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits or
“cold comfort” letters required by or incident to such performance and compliance,
and (e) premiums and other costs of policies of insurance (if any) against
liabilities arising out of the public offering of the Registrable Securities
being registered if the Company 

desires
such insurance, if any; provided however,
that, in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include (and such expenses shall be borne by
the Company): (i) salaries of Company personnel or general overhead expenses of
the Company, (ii) auditing fees, (iii) premiums or other expenses relating to
liability insurance required by underwriters of the Company, or (iv) other
expenses for the preparation of financial statements or other data, to the
extent that any of the foregoing either is normally prepared by the Company in
the ordinary course of its business or would have been incurred by the Company
had no public offering taken place. Registration Expenses shall not include any
underwriting discounts and commissions which may be incurred in the sale of any
Registrable Securities and transfer taxes of the selling holders of Registrable
Securities. 

                    8.7
Information Provided by Holders. Any holder of Registrable Securities
included in any registration shall furnish to the Company such information as
the Company may reasonably request in writing to enable the Company to comply
with the provisions hereof in connection with any registration referred to in
this Warrant. 

                    8.8
FINRA Cobradesk Filings. In the event that a registration statement
covering the Registrable Securities is filed, within one (1) Business Day of
the filing of such registration statement, the Company will prepare and file
the selling stockholder resale offering described in such registration
statement for review by the Financial Industry Regulatory Authority (“FINRA”) via the FINRA’s CobraDesk filing
system (“CobraDesk Filing”) for
the purpose of having the prospectus contained within such registration
statement treated as a “base prospectus” in connection with such resale
offering. The Company will use its Reasonable Best Efforts to have the
CobraDesk Filing approved by FINRA within thirty (30) days of such filing date.
The Company shall bear all expenses of the CobraDesk Filing, including fees and
expenses of counsel or other advisors to the Holder. In all circumstances, the
Company shall pay for all FINRA filing fees associated with the CobraDesk
Filing. 

                    8.9
Effectiveness Period. The Company shall use its Reasonable Best Efforts
to keep each registration statement contemplated hereunder continuously
effective under the Securities Act until the date which is the earlier date of
when (i) all Registrable Securities covered by such Registration Statement have
been sold or (ii) all Registrable Securities covered by such Registration
Statement may be sold immediately without registration under the Securities Act
and without volume restrictions pursuant to Rule 144 under the Securities Act,
as determined by the counsel to the Company pursuant to a written opinion
letter to such effect, addressed and reasonably acceptable to the Company’s
transfer agent and the affected holders of Registrable Securities. 

                    8.10
Net Cash Settlement. Notwithstanding anything herein to the contrary, in
no event will the Holder hereof be entitled to receive a net-cash settlement as
liquidated damages in lieu of physical settlement in shares of Common Stock,
regardless of whether the Common Stock underlying this Warrant is registered
pursuant to an effective registration statement; provided, however, that the
foregoing will not preclude the Holder from seeking other remedies at law or
equity for breaches by the Company of its registration obligations hereunder. 

          9.
Restrictions on Transfer. 

                    9.1
Restrictive Legends. This Warrant and each Warrant issued upon transfer
or in substitution for this Warrant pursuant to Section 10 hereof, each
certificate for Common Stock issued upon the exercise of the Warrant and each
certificate issued upon the transfer of any such Common Stock shall be
transferable only upon satisfaction of the conditions specified in this Section
9. Each of the foregoing securities shall be stamped or otherwise imprinted
with a legend reflecting the restrictions on transfer set forth herein and any
restrictions required under the Securities Act or other applicable securities
laws. 

                    9.2
Notice of Proposed Transfer. Prior to any transfer of any securities which
are not registered under an effective registration statement under the
Securities Act (“Restricted Securities”),
which transfer may only occur if there is an exemption from the registration
provisions of the Securities Act and all other applicable securities laws, the
Holder will give written notice to the Company of the Holder’s intention to
effect a transfer (and shall describe the manner and circumstances of the
proposed transfer). The following provisions shall apply to any proposed
transfer of Restricted Securities: 

                              (i)
If in the opinion of counsel for the Holder reasonably satisfactory to the
Company the proposed transfer may be effected without registration of the
Restricted Securities under the Securities Act (which opinion shall state in
detail the basis of the legal conclusions reached therein), the Holder shall
thereupon be entitled to transfer the Restricted Securities in accordance with
the terms of the notice delivered by the Holder to the Company. Each
certificate representing the Restricted Securities issued upon or in connection
with any transfer shall bear the restrictive legends required by Section 9.1
hereof. 

                              (ii)
If the opinion called for in (i) above is not delivered, the Holder shall not
be entitled to transfer the Restricted Securities until either: (x) receipt by
the Company of a further notice from such Holder pursuant to the foregoing
provisions of this Section 9.2 and fulfillment of the provisions of clause (i)
above, or (y) such Restricted Securities have been effectively registered under
the Securities Act. 

                    9.3
Certain Other Transfer Restrictions. Notwithstanding any other provision
of this Section 9: (i) prior to the Exercise Date, this Warrant or the
Restricted Securities thereunder may only be transferred or assigned to the
persons permitted under FINRA Rule 5110(g), and (ii) no opinion of counsel
shall be necessary for a transfer of Restricted Securities by the holder
thereof to any Person employed by or owning equity in the Holder, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if the transferee were the original purchaser hereof and such
transfer is permitted under applicable securities laws. 

                    9.4
Termination of Restrictions. Except as set forth in Section 9.3 hereof,
the restrictions imposed by this Section 9 upon the transferability of
Restricted Securities shall cease and terminate as to any particular Restricted
Securities: (a) which shall have been effectively registered under the
Securities Act, or (b) when, in the opinions of both counsel for the holder
thereof and counsel for the Company, such restrictions are no longer required
in order to insure compliance with the Securities Act or Section 10 hereof. Whenever
such restrictions 

shall
cease and terminate as to any Restricted Securities, the Holder thereof shall
be entitled to receive from the Company, without expense (other than applicable
transfer taxes, if any), new securities of like tenor not bearing the
applicable legends required by Section 9.1 hereof. 

          10.
Ownership, Transfer, Sale and Substitution of Warrant. 

                    10.1
Ownership of Warrant. The Company may treat any Person in whose name
this Warrant is registered in the Warrant Register maintained pursuant to
Section 10.2(b) hereof as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, except that, if and when any
Warrant is properly assigned in blank, the Company may (but shall not be obligated
to) treat the bearer thereof as the owner of such Warrant for all purposes,
notwithstanding any notice to the contrary. Subject to Sections 9 and 10
hereof, this Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued. 

                    10.2
Office; Exchange of Warrant. 

                    (a)
The Company will maintain its principal office at the location identified in
the prospectus relating to the Offering or at such other offices as set forth
in the Company’s most current filing (as of the date notice is to be given)
under the Exchange Act or as the Company otherwise notifies the Holder. 

                    (b)
The Company shall cause to be kept at its office maintained pursuant to Section
10.2(a) hereof a Warrant Register for the registration and transfer of the
Warrant. The name and address of the holder of the Warrant, the transfers
thereof and the name and address of the transferee of the Warrant shall be
registered in such Warrant Register. The Person in whose name the Warrant shall
be so registered shall be deemed and treated as the owner and holder thereof
for all purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary. 

                    (c)
Upon the surrender of this Warrant, properly endorsed, for registration of
transfer or for exchange at the office of the Company maintained pursuant to
Section 10.2(a) hereof, the Company at its expense will (subject to compliance
with Section 9 hereof, if applicable) execute and deliver to or upon the order
of the Holder thereof a new Warrant of like tenor, in the name of such holder
or as such holder (upon payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face thereof for the number
of shares of Common Stock called for on the face of the Warrant so surrendered
(after giving effect to any previous adjustment(s) to the number of Warrant
Shares). 

                    10.3
Replacement of Warrant. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, upon
delivery of indemnity reasonably satisfactory to the Company in form and amount
or, in the case of any mutilation, upon surrender of this Warrant for
cancellation at the office of the Company maintained pursuant to Section
10.2(a) hereof, the Company, at its expense, will execute and deliver, in lieu
thereof, a new Warrant of like tenor and dated the date hereof. 

                    10.4
Opinions. In connection with the sale of the Warrant Shares by Holder,
the Company agrees to cooperate with the Holder, and at the Company’s expense,
have its counsel provide any legal opinions required to remove the restrictive
legends from the Warrant Shares in connection with a sale, transfer or legend
removal request of Holder. 

          11.
No Rights or Liabilities as Stockholder. No Holder shall be entitled to
vote or receive dividends or be deemed the holder of any shares of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the shares of Common Stock purchasable
upon the exercise hereof shall have become deliverable, as provided herein. The
Holder will not be entitled to share in the assets of the Company in the event
of a liquidation, dissolution or the winding up of the Company. 

          12.
Notices. Any notice or other communication in connection with this
Warrant shall be given in writing and directed to the parties hereto as
follows: (a) if to the Holder, c/o ________________[—name and fax and/or email
address] or (b) if to the Company, to the attention of its Chief Executive
Officer at its office maintained pursuant to Section 10.2(a) hereof; provided, that the exercise of the Warrant
shall also be effected in the manner provided in Section 3 hereof. Notices
shall be deemed properly delivered and received when delivered to the notice
party (i) if personally delivered, upon receipt or refusal to accept delivery,
(ii) if sent via facsimile, upon mechanical confirmation of successful
transmission thereof generated by the sending telecopy machine, (iii) if sent
by a commercial overnight courier for delivery on the next Business Day, on the
first Business Day after deposit with such courier service, or (iv) if sent by
registered or certified mail, five (5) Business Days after deposit thereof in
the U.S. mail. 

          13.
Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of shares of Common Stock underlying this Warrant
upon exercise of this Warrant; provided,
however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the transfer or
registration of this Warrant or any certificate for shares of Common Stock
underlying this Warrant in a name other that of the Holder. The Holder is
responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving shares of Common Stock underlying
this Warrant upon exercise hereof. 

          14.
Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The section headings in this
Warrant are for purposes of convenience only and shall not 

constitute
a part hereof. When used herein, the term “Reasonable
Best Efforts” means, with respect to the applicable obligation of
the Company, reasonable best efforts for similarly situated, publicly-traded
companies. 

          IN
WITNESS WHEREOF, the
Company has caused this Underwriter’s Warrant to be duly executed as of the
date first above written. 

	
  

 	
  

 	
  

 
	
  

 	
 WAVE2WAVE
 COMMUNICATIONS,

 
	
  

 	
 INC.

 
	
  

 	
  

 
	
  

 	
 By:

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
 Title:

 

EXHIBIT A

FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]

To WAVE2WAVE COMMUNICATIONS, INC.:

                    The
undersigned registered holder of the within Warrant hereby irrevocably
exercises the Warrant pursuant to Section 3.1 of the Warrant with respect to
________________________ Warrant Shares, at an exercise price per share of
$[          ], and requests
that the certificates for such Warrant Shares be issued, subject to Sections 9
and 10, in the name of, and delivered to:

	
  

 	
  

 
	

 

 	
  

 
	
  

 	
  

 
	

 

 	
  

 
	
  

 	
  

 
	

 

 	
  

 
	
  

 	
  

 
	

 

 	
  

 

                    The
undersigned is hereby making payment for the Warrant Shares in the following
manner: [check one]

	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 by cash in
 accordance with Section 3.1(b) of the Warrant

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 via cashless
 exercise in accordance with Section 3.1(c) of the Warrant in the following
 manner:

 

	
  

 	
  

 
	

 

 	

 

 
	
  

 	
  

 
	

 

 	

 

 
	
  

 	
  

 
	

 

 	

 

 

                    The
undersigned hereby represents and warrants that it is, and has been since its
acquisition of the Warrant, the record and beneficial owner of the Warrant.

	
  

 	
  

 
	
 Dated: 

 	
  

 
	
  

 	

 

 

	
  

 	
  

 
	

 

 	
  

 
	
 Print or
 Type Name

 	
  

 
	
  

 	
  

 
	

 

 	
  

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

 
	
  

 	
  

 
	

 

 	
  

 
	
  (Street
 Address)

 	
  

 
	
  

 	
  

 
	

 

 	
  

 
	
 (City)                              (State) 
                             (Zip
 Code)

 	
  

 

EXHIBIT B

FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]

                    For
value received, the undersigned registered holder of the within Warrant hereby
sells, assigns and transfers unto _____________________ [include name and addresses]
the rights represented by the Warrant to purchase __________ shares of Common
Stock of WAVE2WAVE COMMUNICATIONS, INC..
to which the Warrant relates, and appoints _____________________ Attorney to
make such transfer on the books of WAVE2WAVE
COMMUNICATIONS, INC. maintained for the 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:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 (Signature
 of Transferee)

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 (Street
 Address)

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
 (City)                           
          (State)              
                       (Zip
 Code)

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Signed in
 the 

 presence of:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]