EXHIBIT 4.7
COMMON STOCK PURCHASE WARRANT
To Purchase __________ Shares of Common Stock of
Mpower Holding Corporation
THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") CERTIFIES that, for
value received, _____________ (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the date hereof (the "Warrant Date") and on or prior to
5:00 p.m. New York City time on the third anniversary of the Warrant Date (the
"Termination Date") but not thereafter, to subscribe for and purchase from
Mpower Holding Corporation, a corporation incorporated in the State of Delaware
(the "Company"), up to ____________ shares (the "Warrant Shares") of Common
Stock, par value $0.001 per share, of the Company (the "Common Stock"). The
purchase price of each Warrant Share (the "Exercise Price") issuable under this
Warrant shall be equal to the average weighted price per share of the Company's
Common Stock on the Warrant Date as quoted by any national or regional
securities exchange on which the Company's Common Stock is then listed or on any
interdealer or over-the counter quotation system on which the Company's common
stock is then quoted (a "Trading Market"), subject to adjustment hereunder. If
the Company's Common Stock is not then listed or quoted, the Exercise Price
shall be equal to the fair value, as determined in good faith by the Company's
Board of Directors, of a share of the Company's common stock on the Warrant
Date. The Exercise Price and the number of Warrant Shares for which the Warrant
is exercisable shall be subject to adjustment as provided herein.
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1. Title to Warrant. Subject to compliance with applicable laws, this
Warrant is non-transferable, and may not be transferred in whole or in part, by
the Holder.
2. Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).
3. Cancellation of Warrant. At any time prior to the Termination Date,
the Company reserves the right, pursuant to the terms of the Mpartner
Independent Agent Agreement, as amended (the "Agent Agreement") between the
Company and certain of its master sales agents, to cancel this Warrant prior to
its exercise upon the occurrence of any of the conditions for termination for
cause set forth in the Agent Agreement. In addition, if a customer or customers
provided by the Holder disconnect(s) the Company's service within one hundred
eighty (180) days of such customer's installation, and as a result of such
disconnect(s), a recalculation of the xxxxxxxx in any given month would result
in a reduction of the number of Warrant Shares for which this Warrant is
exercisable, the Company reserves the right to reduce the number of Warrant
Shares for which this Warrant is exercisable, on a pro rata basis and, if such
customer disconnect(s) result in revised xxxxxxxx in any given month of less
than $10,000 over that month's revenue baseline, the Company reserves the right
to cancel this Warrant.
4. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this Warrant
may be made at any time or times on or after the Warrant Date and on or
before 5:00 p.m. New York City time on the Termination Date by delivery to
the Company of a duly executed facsimile copy of the Notice of Exercise
Form annexed hereto (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the address
of such Holder appearing on the books of the Company); provided, however,
within 5 Trading Days of the date the Notice of Exercise is delivered to
the Company, the Holder shall have surrendered this Warrant to the Company
and the Company shall have received payment of the aggregate Exercise Price
of the shares thereby purchased by wire transfer or cashier's check drawn
on a United States bank. Certificates for shares purchased hereunder shall
be delivered to the Holder within the earlier of (i) 10 Trading Days after
the date on which the Notice of Exercise shall have been delivered by
facsimile copy or (ii) 3 Trading Days from the delivery to the Company of
each of the Notice of Exercise Form by facsimile copy, surrender of this
Warrant and payment of the aggregate Exercise Price as set forth above
("Warrant Share Delivery Date"); provided, however, in the event the
Warrant is not surrendered or the aggregate Exercise Price is not received
by the Company within 5 Trading Days after the date on which the Notice of
Exercise shall be delivered by facsimile copy, the Warrant Share Delivery
Date shall be terminated or superceded to the extent that such period is
exceeded. This Warrant shall be deemed to have been exercised on the later
of the date
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the Notice of Exercise is delivered to the Company by facsimile copy and
the date the Exercise Price is received by the Company. The Warrant Shares
shall be deemed to have been issued, and the Holder shall be deemed to have
become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 6 prior to the issuance of such shares, have been paid. If the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 4(a) by the third
Trading Day following the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise. Nothing herein shall limit a
Xxxxxx's right to pursue any remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company's failure to timely
deliver certificates representing shares of Common Stock upon exercise of
the Warrant as required pursuant to the terms hereof.
(b) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical
with this Warrant.
(c) The Company shall not effect any exercise of this Warrant,
and the Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 4(a) or otherwise, to the extent that after
giving effect to such issuance after exercise, the Holder (together with
the Holder's affiliates), as set forth on the applicable Notice of
Exercise, would beneficially own in excess of 4.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to such
issuance. For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its affiliates shall
include the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which the determination of such sentence is being
made, but shall exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, nonexercised portion of this
Warrant beneficially owned by the Holder or any of its affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other
Warrants) subject to a limitation on conversion or exercise analogous to
the limitation contained herein beneficially owned by the Holder or any of
its affiliates. Except as set forth in the preceding sentence, for purposes
of this Section 4(c), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act. To the extent that the
limitation contained in this Section 4(c) applies, the determination of
whether this Warrant is exercisable (in relation to other securities owned
by the Holder) and of which a portion of this Warrant is exercisable shall
be in the sole discretion of such Xxxxxx, and the submission of a Notice of
Exercise shall be deemed to be such Holder's determination of whether this
Warrant is exercisable (in relation to other securities owned by such
Holder) and of which portion of this Warrant is exercisable, in each case
subject to such aggregate percentage limitation, and the Company shall have
no obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 4(c), in determining the number of
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outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most
recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the
Company's Transfer Agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of the Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its affiliates since the date as
of which such number of outstanding shares of Common Stock was reported.
The provisions of this Section 4(c) may be waived by the Holder upon, at
the election of the Holder, not less than 61 days' prior notice to the
Company, and the provisions of this Section 4(c) shall continue to apply
until such 61st day (or such later date, as determined by the Holder, as
may be specified in such notice of waiver).
5. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
6. Charges, Taxes and Expenses. All incidental expenses and taxes in
respect of the issuance of certificates for Warrant Shares shall be paid by the
Holder, and such certificates shall be issued in the name of the Holder.
7. Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price, the Warrant Shares so purchased shall
be and be deemed to be issued to such Holder as the record owner of such shares
as of the close of business on the later of the date of such surrender or
payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
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10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
(a) Stock Splits, etc. The number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price shall
be subject to adjustment from time to time upon the happening of any of the
following. In case the Company shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock into a greater number of shares, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common
Stock, then the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Holder
shall be entitled to receive the kind and number of Warrant Shares or other
securities of the Company which it would have owned or have been entitled
to receive had such Warrant been exercised in advance thereof. Upon each
such adjustment of the kind and number of Warrant Shares or other
securities of the Company which are purchasable hereunder, the Holder shall
thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in
effect immediately prior to such adjustment by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such adjustment and
dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this
paragraph shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of
the Company), or sell, transfer or otherwise dispose of its property,
assets or business to another corporation and, pursuant to the terms of
such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor
or acquiring corporation ("Other Property"), are to be received by or
distributed to the holders of Common Stock of the Company, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant,
the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and
Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a
Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In
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case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring corporation (if other
than the Company) shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this Warrant to
be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant
Shares for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section
11. For purposes of this Section 11, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of
stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable for any such stock,
either immediately or upon the arrival of a specified date or the happening
of a specified event and any warrants or other rights to subscribe for or
purchase any such stock. The foregoing provisions of this Section 10 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
12. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
14. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities
or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or
other disposition of all or substantially all the property, assets or
business of the Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
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then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to the Holder at
the last address of Holder appearing on the books of the Company and delivered
in accordance with Section 16(d).
15. Authorized Shares. The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.
Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, 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 such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares 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 nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
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 Warrant.
Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the
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Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
16. Miscellaneous.
(a) Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of the provisions of this Warrant
shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of Rochester, New York. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of Rochester, New York for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party hereto
hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by delivering a
copy thereof via overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Warrant and
agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law.
Each party hereto (including its affiliates, agents, officers, directors
and employees) hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby. If either party shall commence an action or proceeding
to enforce any provision of the Warrant, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its
attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
(b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.
(c) Nonwaiver. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate (i) on the
Termination Date or (ii) upon cancellation of this Warrant in accordance
with Section 3 hereof.
(d) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or
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communication is delivered via facsimile at the facsimile number set forth
below prior to 5:00 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth
below on a day that is not a Trading Day or later than 5:00 p.m. (New York
City time) on any Trading Day, (c) the second Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt. For purposes of the applicable
provisions of this Warrant, a "Trading Day" is a day on which the Company's
Common Stock (a) is not suspended from trading on any Trading Market at the
close of business and (b) has traded at least once on the Trading Market
that is the primary market for the trading of the Company's Common Stock.
All notices shall be confirmed to the parties hereto as follows:
If to the Company:
Mpower Holding Corporation
000 Xxxxx'x Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile: [ ]-[ ]
Attention: General Counsel
If to the Holder:
[ ]
Facsimile: [ ]-[ ]
Attention: [ ]
(e) Limitation of Liability. No provision hereof, in the absence
of any affirmative action by Holder to exercise this Warrant or purchase
Warrant Shares, and no enumeration herein of the rights or privileges of
Holder, shall give rise to any liability of Holder for the purchase price
of any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
(f) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company
and the successors and permitted assigns of Holder. The provisions of this
Warrant are intended to be for the benefit of all Holders from time to time
of this Warrant and shall be enforceable by any such Holder of Warrant
Shares.
(g) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
(h) Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such
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provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
(i) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a
part of this Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated: [ ]
MPOWER HOLDING CORPORATION
By: ____________________________________
Name:
Title:
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NOTICE OF EXERCISE
To: Mpower Holding Corporation
(1) The undersigned has hereby been granted ________ Warrant
Shares of Mpower Holding Corporation pursuant to the terms of the attached
Warrant (only if exercised in full), and tenders herewith payment of the
exercise price in full, together with all applicable transfer and other taxes,
if any.
(2) Payment shall take the form of lawful money of the United
States.
(3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned:
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The Warrant Shares shall be delivered to the following:
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[PURCHASER]
By:
---------------------------------
Name:
Title:
Dated:
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