Exhibit 4.12
EXECUTION VERSION
_______________________________________________________________________________
WARRANT
to Purchase Common Stock of
CORECOMM LIMITED
_______________________________________________________________________________
Warrant No. CCL-1
Original Issue
Date: December 15, 2000
NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAW. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, INCLUDING THE EXEMPTION PROVIDED FOR BY RULE 144 (IF
AVAILABLE), SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
IT. THIS LEGEND WILL BE REMOVED UPON THE WRITTEN REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE. IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND
OTHER INFORMATION AS THE COMPANY MAY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
Warrant No. CCL-1
WARRANT
CORECOMM LIMITED
THIS IS TO CERTIFY THAT CHASE SECURITIES INC., or registered
assigns, is entitled, at any time prior to the Expiration Date (such term,
and certain other capitalized terms used herein being hereinafter defined),
to purchase from CORECOMM LIMITED, a Delaware corporation (the "Company"),
402,500 shares of the Common Stock of the Company (subject to adjustment as
provided herein), at a purchase price of $3.39 per share (the initial
"Exercise Price", subject to adjustment as provided in Section 4 hereof),
all on the terms and conditions and pursuant to the provisions hereinafter
set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the
respective meanings set forth below:
"Affiliate" of any specified Person shall mean any other
Person, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Beneficially Owned" or "Beneficial Owner" shall have the
interpretation seu forth in Rule 13d-3 of the Exchange Act.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be closed in
the State of New York.
"Cashless Exercise" shall have the meaning set forth in Section
2.1(c) hereof.
"Cashless Exercise Ratio" means a fraction, the numerator of
which is the excess of the Fair Value per share of Common Stock on the
Exercise Date over the Exercise Price as of the Exercise Date and the
denominator of which is the Fair Value per share of the Common Stock on the
Exercise Date.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency then administering the Securities Act and other
federal securities laws.
! "Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock of the Company, par value $0.01 per share, as
constituted on the Original Issue Date, and any capital stock into which
such Common Stock may thereafter be changed, and shall also include shares
of common stock of any successor or acquiring corporation (as defined in
Section 4.6 hereof) received by or distributed to the holders of Common
Stock of the Company in the circumstances contemplated by Section 4.6
hereof.
"Company" means CoreComm Limited, a Delaware corporation, and
any successor corporation.
"Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities that are convertible into or
exchangeable for, with or without payment of additional consideration in
cash or property, shares of Common Stock, either immediately or upon the
occurrence of a specified date or a specified event.
"Current Market Price" shall mean as of any specified date the
average of the daily market prices of the Common Stock of the Company for
the twenty (20) consecutive Business Days immediately preceding such date.
The "daily market price" for each such Business Day shall be: (i) if the
Common Stock is then listed on a national securities exchange or is listed
on NASDAQ and is designated as a National Market System security, the last
sale price, regular way, on such day on the principal stock exchange or
market system on which such Common Stock is then listed or admitted to
trading, or, if no such sale takes place on such day, the average of the
closing bid and asked prices for the Common Stock on such day as reported
on such stock exchange or market system or (ii) if the Common Stock is not
then listed or admitted to trading on any national securities exchange or
designated as a National Market System security on NASDAQ but is traded
over-the-counter, the average of the closing bid and asked prices for the
Common Stock as reported on NASDAQ or the Electronic Bulletin Board or in
the National Daily Quotation Sheets, as applicable.
"Designated Office" shall have the meaning set forth in Section
11 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"Exercise Date" shall have the meaning set forth in Section 2.1
hereof.
"Exercise Notice" shall have the meaning set forth in Section
2.1 hereof.
"Exercise Period" shall mean the period during which this
Warrant is exercisable pursuant to Section 2.1 hereof.
"Exercise Price" shall mean, in respect of a share of Common
Stock at any date herein specified, the initial Exercise Price set forth in
the preamble of this Warrant as adjusted from time to time pursuant to
Section 4 hereof.
"Expiration Date" shall mean December 14, 2010.
"Fair Value" per share of Common Stock as of any specified date
shall mean (i) if the Common Stock is publicly traded on such date, the
Current Market Price per share or (ii) if the Common Stock is not publicly
traded on such date, the fair market value per share of Common Stock as
determined in good faith by the Board of Directors of the Company and set
forth in a written notice to each Holder.
"Fully Diluted Outstanding" shall mean, when used with
reference to Common Stock, at any date as of which the number of shares
thereof is to be determined, all shares of Common Stock Outstanding on such
date and all shares of Common Stock issuable in respect of (x) the Warrants
outstanding on such date, (y) any Convertible Securities outstanding on
such date and (z) any other Stock Purchase Rights outstanding on such date,
in each case regardless of whether or not the conversion, exchange,
subscription or purchase rights associated with such Convertible Securities
or Stock Purchase Rights are presently exercisable.
"Holder" shall mean the Person in whose name the Warrant set
forth herein is registered on the books of the Company maintained for such
purpose.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any lease or title retention
agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give,
any financing statement perfecting a security interest under the Uniform
Commercial Code or comparable law of any jurisdiction).
"Loans" shall mean loans made pursuant to the Credit Agreement
dated as of September 28, 2000, as amended, among the Company, CoreComm
Holdco, Inc., CoreComm Communications, Inc., the Lenders party thereto and
The Chase Manhattan Bank as Administrative Agent and Collateral Agent.
"Majority Warrant Holders" shall mean the holders of Warrants
exercisable for the purchase of more than fifty percent (50%) of the
aggregate number of shares of Warrant Stock then purchasable upon exercise
of all then outstanding Warrants.
"NASDAQ" shall mean the NASDAQ quotation system, or any
successor reporting system.
"Opinion of Counsel" means a written opinion of counsel (who
may be an employee of a Holder) experienced in Securities Act matters
chosen by the holder of this Warrant or Warrant Stock issued upon the
exercise hereof and reasonably acceptable to the Company.
"Original Issue Date" shall mean the date on which the Original
Warrants were issued, as set forth on the cover page of this Warrant.
"Original Warrants" shall mean the Warrants originally issued
by the Company on the Original Issue Date to Chase Securities Inc..
"Other Property" shall have the meaning set forth in Section
4.6 hereof.
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be
determined, all issued shares of Common Stock, except shares then owned or
held by or for the account of the Company or any Subsidiary thereof, and
shall include all shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in shares of Common Stock.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, incorporated
organization, association, corporation, institution, public benefit
corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"Registration Agreement" shall mean the Registration Rights
Agreement by and between the Company and Chase Securities Inc., dated as of
December 15, 2000, as it may be amended from time to time in accordance
with its terms.
"Resale Restriction Termination Date" shall have the meaning
set forth in Section 8.1 hereof.
"Restricted Common Stock" shall mean shares of Common Stock
which are, or which upon their issuance on the exercise of this Warrant
would be, evidenced by a certificate bearing the restrictive legend set
forth in Section 8.2(a) hereof.
"Rule 144A" shall have the meaning set forth in Section 8.1
hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Stock Purchase Rights" shall mean any options, warrants or
other securities or rights to subscribe to or exercisable for the purchase
of shares of Common Stock or Convertible Securities, whether or not
immediately exercisable.
"Subsequent Issuance" shall mean any sale or issuance by the
Company of Common Stock, Convertible Securities or Stock Purchase Rights
after the Original Issue Date other than:
(i) any issuance of Warrant Stock upon exercise of the Warrants;
(ii) any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and any issuance of Common Stock pursuant to
the conversion, exchange or exercise of any such Convertible
Securities or Stock Purchase Rights) deemed to have been issued as of
the Original Issue Date pursuant to the definition of Fully Diluted
Outstanding;
(iii) any issuance of Common Stock or Convertible Securities (and
any issuance of Common Stock pursuant to the conversion or exchange
of any Convertible Securities) paid as a dividend with respect to
Convertible Securities;
(iv) any issuance of Common Stock paid as interest with respect to
Convertible Securities;
(v) any issuance of Common Stock upon exchange or redemption of
Convertible Securities;
(vi) any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and any issuance of Common Stock pursuant to
the conversion, exchange or exercise of any such Convertible
Securities or Stock Purchase Rights) to a non-Affiliate (as
determined prior to the consummation of such transaction) in an arm's
length transaction that was approved by a majority of the Board of
Directors (or a committee thereof) of the Company;
(vii) any issuance of Stock Purchase Rights (or any issuance of
shares of Common Stock upon exercise of such Stock Purchase Rights)
or Common Stock to employees of, or consultants to, the Company or
any of its Subsidiaries pursuant to an employee stock option, stock
incentive plan, employment agreement or consulting agreement approved
by the Board of Directors of the Company in good faith;
(viii) any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and any issuance of Common Stock pursuant to
the conversion, exchange or exercise of any such Convertible
Securities or Stock Purchase Rights) to a non-Affiliate (as
determined prior to the consummation of such transaction) (a) in
connection with the acquisition of another company, business or
assets thereof, (b) to a lender in connection with a financing
transaction or the renegotiation of an existing transaction or (c) in
connection with strategic transactions involving the Company or any
of its Subsidiaries and other entities, including joint ventures,
manufacturing, marketing or distribution agreements or technology
transfers or development agreements;
(ix) any issuance of Convertible Securities or Stock Purchase
Rights (and any issuance of Common Stock or Stock Purchase Rights
pursuant to the exchange or exercise of any such Convertible
Securities or Stock Purchase Rights) in connection with the
shareholders rights plan of the Company; or
(x) any other issuance of Common Stock, Convertible Securities
or Stock Purchase Rights with respect to which the Majority Warrant
Holders shall have waived application of the provisions of Section 4
hereof.
"Subsidiary" means any corporation or association more than 50%
(by number of votes) of the voting stock of which is at the time owned by
the Company or by one or more Subsidiaries or by the Company and one or
more Subsidiaries, or any other business entity in which the Company or one
or more Subsidiaries or the Company and one or more Subsidiaries own more
than a 50% interest either in the profits or capital of such business
entity.
"Transfer" shall mean any disposition of any Warrant or Warrant
Stock or of any interest in either thereof, which would constitute a "sale"
thereof within the meaning of the Securities Act.
"Warrant Price" shall mean an amount equal to (i) the number of
shares of Common Stock being purchased upon exercise of this Warrant
pursuant to Section 2.1 hereof, multiplied by (ii) the Exercise Price as of
the date of such exercise.
"Warrants" shall mean the Original Warrants and all warrants
issued upon transfer, division or combination of, or in substitution for,
such Original Warrants or any other such Warrant. All Warrants shall at all
times be identical as to terms and conditions and date, except as to the
number of shares of Common Stock for which they may be exercised.
"Warrant Stock" generally shall mean the shares of Common Stock
issued, issuable or both (as the context may require) upon the exercise of
Warrants until such time as such shares of Common Stock have either been
(i) Transferred in a public offering pursuant to a registration statement
filed under the Securities Act or (ii) Transferred in a transaction exempt
from the registration and prospectus delivery requirements of the
Securities Act under Rule 144 thereunder with all transfer restrictions and
restrictive legends with respect to such Common Stock being removed in
connection with such transaction.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise.
(a) From and after the Original Issue Date and until 5:00 P.M.,
New York time, on the Expiration Date, the Holder may from time to time
exercise this Warrant, on any Business Day, for all or any part of the
number of shares of Common Stock purchasable hereunder (subject to
adjustment pursuant to Section 4 below). In order to exercise this Warrant,
in whole or in part, the Holder shall (i) deliver to the Company at the
Designated Office a written notice of the Holder's election to exercise
this Warrant (an "Exercise Notice"), which Exercise Notice shall be
irrevocable and specify the number of shares of Common Stock to be
purchased, together with this Warrant and (ii) pay to the Company the
Warrant Price (the date on which both such delivery and payment shall have
first taken place being hereinafter sometimes referred to as the "Exercise
Date"). Such Exercise Notice shall be in the form of the subscription form
attached as Annex A to this Warrant, duly executed by the Holder or its
duly authorized agent or attorney.
(b) Upon receipt of such Exercise Notice, Warrant and payment
of the Warrant Price, the Company shall, as promptly as practicable, and in
any event within five (5) Business Days thereafter, execute (or cause to be
executed) and deliver (or cause to be delivered) to the Holder a
certificate or certificates representing the aggregate number of full
shares of Common Stock issuable upon such exercise, together with cash in
lieu of any fraction of a share, as hereafter provided. The stock
certificate or certificates so delivered shall be, to the extent possible,
in such denomination or denominations as the exercising Holder shall
reasonably request in the Exercise Notice and shall be registered in the
name of the Holder or such other name as shall be designated in the
Exercise Notice. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and
the Holder or any other Person so designated to be named therein shall be
deemed to have become a holder of record of such shares for all purposes,
as of the Exercise Date, provided, however, that a Holder shall not be
entitled to revoke, rescind or modify its Exercise Notice after such notice
is delivered to the Company.
(c) Payment of the Warrant Price shall be made (i) by delivery
of a certified or official bank check in the amount of such Warrant Price
or (ii) without the payment of cash, by (1) canceling outstanding Loans
(including accrued interest thereon through the Exercise Date) held and
designated by such Holder in an amount equal to the Warrant Price, (2)
reducing the number of shares of Common Stock which would be obtainable
upon the exercise of this Warrant by the payment of the Warrant Price
solely in cash so as to yield a number of shares of Common Stock upon the
exercise of this Warrant equal to the product of (x) the number of shares
of Common Stock issuable as of the Exercise Date upon the exercise of this
Warrant (if payment of the Warrant Price were being made in cash) and (y)
the Cashless Exercise Ratio or (3) any combination of exercises pursuant to
clauses (1) and (2) above. An exercise of this Warrant in accordance with
the immediately preceding clause (ii) is herein called a "Cashless
Exercise". Subject to Section 2.1, the rights represented by this Warrant
shall be exercisable at the election of the Holder thereof either in full
at any time or from time to time in part and in the event that a
certificate is surrendered for exercise of less than all the Warrants
represented by such certificate at any time prior to the Expiration Date, a
new certificate representing the remaining Warrants shall be issued.
(d) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing the shares of Common Stock being issued, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase the
unpurchased shares of Common Stock called for by this Warrant. Such new
Warrant shall in all other respects be identical with this Warrant.
2.2. No Liens. All shares of Common Stock issuable upon the
exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, issued without violation of any
preemptive rights and free and clear of all Liens (other than any created
by actions of the Holder).
2.3. Fractional Shares. The Company shall not be required to
issue a fractional share of Common Stock upon exercise of any Warrant. As
to any fraction of a share that the Holder of one or more Warrants, the
rights under which are exercised in the same transaction, 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 the same
fraction of the Fair Value of one share of Common Stock on the Exercise
Date.
2.4. Continued Validity and Application. A holder of shares of
Warrant Stock issued upon the exercise of this Warrant, in whole or in
part, including any transferee of such shares (other than a transferee in
whose hands such shares no longer constitute Warrant Stock as defined
herein), shall continue, with respect to such shares, to be entitled to all
rights and to be subject to all obligations that are applicable to such
holder by the terms of this Warrant. The Company shall, at the time of any
exercise of this Warrant or any transfer of Warrant Stock, upon the written
request of the holder of the shares of Warrant Stock issued in connection
with such exercise or transfer, acknowledge in writing, in a form
reasonably satisfactory to such holder, its continuing obligation to afford
to such holder such rights referred to in this Section 2.4; provided,
however, that if such holder of Warrant Stock shall fail to make any such
written request, such failure shall not affect the continuing obligation of
the Company to afford to such holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Section 8 hereof,
each transfer of this Warrant and all rights hereunder, in whole or in
part, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the Designated Office,
together with a written assignment of this Warrant in the form attached as
Annex B to this Warrant, duly executed by the Holder or its duly authorized
agent or attorney. Upon such surrender and delivery, the Company shall,
subject to Section 8, execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denominations specified in
such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned in
compliance with Section 8, may be exercised by the new Holder for the
purchase of shares of Common Stock without having a new Warrant issued.
3.2. Division and Combination. Subject to compliance with the
applicable provisions of this Warrant, this Warrant may be divided or
combined with other Warrants upon presentation hereof at the Designated
Office, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. Subject to compliance with the applicable
provisions of this Warrant as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
3.3. Expenses. The Company shall prepare, issue and deliver at
its own expense any new Warrant or Warrants required to be issued under
this Section 3.
3.4. Maintenance of Books. The Company agrees to maintain, at
the Designated Office, books for the registration and transfer of the
Warrants.
4. ANTIDILUTION PROVISIONS
The number of shares of Common Stock for which this Warrant is
exercisable and the Exercise Price shall be subject to adjustment from time
to time as set forth in this Section 4.
4.1. Stock Dividends, Subdivisions and Combinations. If at any
time the Company shall:
(i) take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, additional shares of Common Stock,
(ii) subdivide, split or reclassify its outstanding shares of
Common Stock into a larger number of shares of such Common Stock, or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of such Common Stock, then the Exercise
Price shall be adjusted to equal the product of the Exercise Price in
effect immediately prior to such event multiplied by a fraction the
numerator of which is equal to the number of shares of Common Stock
Outstanding immediately prior to the adjustment and the denominator
of which is equal to the number of shares of Common Stock Outstanding
immediately after such adjustment.
4.2. Issuance of Additional Shares of Common Stock. (a) If at
any time the Company shall issue or sell any shares of Common Stock in a
Subsequent Issuance for a consideration per share that is less than the
Fair Value thereof, then, forthwith upon such issuance or sale, the
Exercise Price shall be reduced to the price calculated by:
dividing (i) an amount equal to the sum of (x) the number of
shares of Common Stock Fully Diluted Outstanding immediately prior to
such Subsequent Issuance multiplied by the then existing Fair Value
per share, plus (y) the aggregate consideration (determined in
accordance with the provisions of Section 4.7 hereof), if any,
received by the Company in connection with such Subsequent Issuance,
by (ii) the total number of shares of Common Stock Fully Diluted
Outstanding immediately after such Subsequent Issuance.
(b) The provisions of this Section 4.2 shall not apply to (i)
any issuance of Common Stock for which an adjustment is provided for under
Section 4.1 or (ii) any issuance or sale of Common Stock pursuant to the
exercise of any Stock Purchase Rights or Convertible Securities to the
extent that an adjustment shall have been previously made hereunder in
connection with the issuance of such Stock Purchase Rights or Convertible
Securities pursuant to the provisions of Section 4.3 hereof.
4.3. Issuances of Stock Purchase Rights and Convertible Securities
(a) In the event that the Company shall at any time issue, sell
or grant any Stock Purchase Rights to any Person in a Subsequent Issuance,
then, for the purpose of Section 4.2 above, the Company shall be deemed to
have issued at that time a number of shares of Common Stock equal to the
maximum number of shares of Common Stock that are or may become issuable
upon exercise of such Stock Purchase Rights (or upon exercise of any
Convertible Securities issuable upon exercise of such Stock Purchase
Rights) for a consideration per share equal to (i) the aggregate
consideration per share (determined in accordance with the provisions of
Section 4.7 hereof) received by the Company in connection with the
issuance, sale or grant of such Stock Purchase Rights plus (ii) the minimum
amount of such consideration per share receivable by the Company in
connection with the exercise of such Stock Purchase Rights (and the
exercise of any Convertible Securities issuable upon exercise of such Stock
Purchase Rights).
(b) In the event that the Company shall at any time issue or
sell any Convertible Securities to any Person in a Subsequent Issuance,
then, for the purposes of Section 4.2 above, the Company shall be deemed to
have issued at that time a number of shares of Common Stock equal to the
maximum number of shares of Common Stock that are or may become issuable
upon the exercise of the conversion or exchange rights associated with such
Convertible Securities for a consideration per share equal to (i) the
aggregate consideration per share (determined in accordance with the
provisions of Section 4.7 hereof) received by the Company in connection
with the issuance or sale of such Convertible Securities plus (ii) the
minimum amount of such consideration per share receivable by the Company in
connection with the exercise of such conversion or exchange rights.
(c) If, at any time after any adjustment of the Exercise Price
shall have been made hereunder as the result of any issuance, sale or grant
of any Stock Purchase Rights or Convertible Securities, the maximum number
of shares issuable upon exercise of such Stock Purchase Rights or of the
rights of conversion or exchange associated with such Convertible
Securities shall increase, or the minimum amount of consideration per share
receivable in connection with such exercise shall decrease, whether by
operation of any antidilution rights pertaining to such Stock Purchase
Rights or Convertible Securities, by agreement of the parties or otherwise,
the Exercise Price then in effect shall first be readjusted to eliminate
the effects of the original issuance, sale or grant of such Stock Purchase
Rights or Convertible Securities on such Exercise Price and then readjusted
as if such Stock Purchase Rights or Convertible Securities had been issued
on the effective date of such increase in number of shares or decrease in
consideration.
(d) If, at any time after any adjustment of the Exercise Price
shall have been made hereunder as the result of any issuance, sale or grant
of any Stock Purchase Rights or Convertible Securities, any of such Stock
Purchase Rights or the rights of conversion or exchange associated with
such Convertible Securities shall expire by their terms or any of such
Stock Purchase Rights or Convertible Securities shall be repurchased by the
Company or a Subsidiary thereof for a consideration per underlying share of
Common Stock not exceeding the amount of such consideration received by the
Company in connection with the issuance, sale or grant of such Stock
Purchase Rights or Convertible Securities, the Exercise Price then in
effect shall forthwith be increased to the Exercise Price that would have
been in effect if such expiring Stock Purchase Rights or rights of
conversion or exchange or such repurchased Stock Purchase Rights or
Convertible Securities had never been issued. Similarly, if at any time
after any such adjustment of the Exercise Price shall have been made
pursuant to Section 4.2, (i) any additional consideration is received or
becomes receivable by the Company in connection with the issuance or
exercise of such Stock Purchase Rights or Convertible Securities or (ii)
there is a reduction in the conversion ratio applicable to such Convertible
Securities so that fewer shares of Common Stock will be issuable upon the
conversion or exchange thereof or there is a decrease in the number of
shares of Common Stock issuable upon exercise of such Stock Purchase
Rights, the Exercise Price then in effect shall be forthwith readjusted to
the Exercise Price that would have been in effect had such changes taken
place at the time that such Stock Purchase Rights or Convertible Securities
were initially issued, granted or sold. In no event shall any readjustment
under this Section 4.3(d) affect the validity of any shares of Warrant
Stock issued upon any exercise of this Warrant prior to such readjustment,
nor shall any such readjustment have the effect of increasing the Exercise
Price above the Exercise Price that would have been in effect if the
related Stock Purchase Rights or Convertible Securities had never been
issued.
4.4. Other Adjustments. Notwithstanding any other provision of
this Warrant, in the event the Company consummates any transaction or
series of transactions which results in an antidilution or similar
adjustment pursuant to the terms of any Convertible Securities or Stock
Purchase Rights, in each case primarily for the benefit of any member of
management or any director of the Company, and such antidilution or similar
adjustment is implemented pursuant to and in compliance with the terms of
such instrument, the Company shall make a proportionate adjustment to this
Warrant; provided, that the foregoing and Section 4.8 hereof shall not be
interpreted to result in, or have the effect of requiring, an adjustment to
this Warrant upon a repricing of options or similar equity instruments of
the Company Beneficially Owned by any employee or director of the Company
or any Subsidiary of the Company which is approved in good faith by the
Board of Directors (or a committee thereof) of the Company.
4.5. Adjustment of Number of Shares Purchasable. Upon any
adjustment of the Exercise Price as provided in Section 4.1, 4.2, 4.3, 4.4,
4.6 and 4.8 hereof, as applicable, the Holder hereof shall thereafter be
entitled to purchase upon the exercise of this Warrant, at the Exercise
Price resulting from such adjustment, the number of shares of Common Stock
(calculated to the nearest 1/100th of a share) obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number
of shares of Common Stock issuable on the exercise hereof immediately prior
to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
4.6. 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 any change whatsoever in, or distribution with respect to, the
Outstanding Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, (i)
shares of common stock of the successor or acquiring corporation or of the
Company (if it is the surviving corporation) or (ii) 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 who are holders immediately prior to such transaction,
then the Holder of this Warrant 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 such event,
the aggregate Exercise Price otherwise payable for the shares of Common
Stock issuable upon exercise of this Warrant shall be allocated among the
shares of common stock and Other Property receivable as a result of such
reorganization, reclassification, merger, consolidation or disposition of
assets in proportion to the respective fair market values of such shares of
common stock and Other Property as determined in good faith by the Board of
Directors of the Company. In 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 reasonably deemed appropriate (as
determined by resolution of the Board of Directors of the Company) in order
to provide for adjustments of any shares of the common stock of such
successor or acquiring corporation for which this Warrant thus becomes
exercisable, which modifications shall be as equivalent as practicable to
the adjustments provided for in this Section 4. For purposes of this
Section 4.6, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class that is not preferred as to
dividends or assets over any other class of stock of such corporation and
that is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities that 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 4.6 shall similarly apply to successive
reorganizations, reclassification, mergers, consolidations or disposition
of assets.
4.7. Determination of Consideration. For purposes of Sections
4.2, 4.3, 4.4, 4.6 and 4.8 hereof, as applicable, the consideration
received and/or receivable by the Company in connection with the issuance,
sale, grant or exercise of additional shares of Common Stock, Stock
Purchase Rights or Convertible Securities, irrespective of the accounting
treatment of such consideration, shall be valued as follows:
(1) Cash Payment. In the case of cash, the net amount received
by the Company after deduction of any underwriting commissions or
concessions paid or allowed by the Company.
(2) Securities or Other Property. In the case of securities or
other property, the fair market value thereof as of the date
immediately preceding such issuance, sale, grant or exercise as
determined in good faith by the Board of Directors of the Company.
(3) Allocation Related to Common Stock. In the event shares of
Common Stock are issued or sold together with other securities or
other assets of the Company for a consideration which covers both,
the consideration received (computed as provided in (1) and (2)
above) shall be allocable to such shares of Common Stock as
determined in good faith by the Board of Directors of the Company.
(4) Allocation Related to Stock Purchase Rights and Convertible
Securities. In case any Stock Purchase Rights or Convertible
Securities shall be issued or sold together with other securities or
other assets of the Company, together comprising one integral
transaction in which no specific consideration is allocated to the
Stock Purchase Rights or Convertible Securities, the consideration
allocable to such Stock Purchase Rights or Convertible Securities
shall be determined in good faith by the Board of Directors of the
Company.
(5) Dividends in Securities. In case the Company shall declare
a dividend or make any other distribution upon any stock of the
Company payable in either case in Common Stock or Convertible
Securities, such Common Stock or Convertible Securities, as the case
may be, issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
(6) Merger, Consolidation or Sale of Assets. In case any shares
of Common Stock, Stock Purchase Rights or Convertible Securities
shall be issued in connection with any merger or consolidation in
which the Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value of such
portion of the assets and business of the non-surviving corporation
attributable to such Common Stock, Stock Purchase Rights or
Convertible Securities, as is determined in good faith by the
Company's Board of Directors.
4.8. Other Dilutive Events. In case any event shall occur as to
which the other provisions of this Section 4 are not strictly applicable
but as to which the failure to make any adjustment would not fairly protect
the purchase rights represented by this Warrant in accordance with the
essential intent and principles hereof as determined in good faith by the
Company's Board of Directors (including, without limitation, the issuance
of equity securities (other than as specifically provided in Sections 4.1,
4.2, 4.3, 4.4 and 4.6), the distribution to all holders of Common Stock of
evidences of indebtedness, cash or other property (other than cash
dividends paid in the ordinary course of business), the granting of
"phantom stock" rights or "stock appreciation rights" or the repurchase of
outstanding shares of Common Stock, Convertible Securities or Stock
Purchase Rights for a purchase price exceeding Fair Value; provided,
however, that the Company shall be permitted to effect (i) a self tender
offer of Common Stock up to 10% of the Fully Diluted Outstanding Common
Stock at a price not to exceed Fair Value on the date the self tender offer
is first publicly announced by the Company and (ii) a redemption of
Convertible Securities in accordance with the terms of such instrument as
in effect on the date hereof), then, in each such case, the Majority
Warrant Holders may select an independent investment banking firm of
nationally recognized standing and reasonably acceptable to the Company to
make a determination as to the adjustment, if any, required to be made on a
basis consistent with the essential intent and principles established
herein as a result of such event in order to preserve the purchase rights
represented by the Warrants. If the investment bank selected by the
Majority Warrant Holders is not reasonably acceptable to the Company, and
the Company and the Majority Warrant Holders cannot agree on a mutually
acceptable investment bank, then the Company and the Majority Warrant
Holders shall each choose one such investment bank and the respective
chosen firms shall jointly select a third investment bank, which shall make
the determination. The Company, on the one hand, and all affected holders
of Warrants or Warrant Stock, on the other hand, shall each pay 50% of the
costs and fees of each such investment bank (the holders of Warrants and
Warrant Stock shall agree among themselves the pro rata allocation of such
costs and expenses), and the decision of the investment bank making such
determination shall be final and binding on the Company and all affected
holders of Warrants or Warrant Stock. Promptly after receipt by the Company
of the opinion of such investment bank as to any such required adjustments,
the Company shall take any actions necessary to implement same.
4.9. Other Provisions Applicable to Adjustments Under this
Section. The following provisions shall be applicable to the adjustments
provided for pursuant to this Section 4:
(a) When Adjustments To Be Made. The adjustments required by
this Section 4 shall be made whenever and as often as any specified
event requiring such an adjustment shall occur. For the purpose of
any such adjustment, any specified event shall be deemed to have
occurred at the close of business on the date of its occurrence.
(b) Record Date. In case the Company shall take a record of the
holders of the Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock,
Convertible Securities or Stock Purchase Rights or (ii) to subscribe
for or purchase Common Stock, Convertible Securities or Stock
Purchase Rights, then all references in this Section 4 to the date of
the issuance or sale of such shares of Common Stock, Convertible
Securities or Stock Purchase Rights shall be deemed to be references
to such record date.
(c) Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Common Stock shall be taken into
account to the nearest 1/100th of a share.
(d) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution to which the
provisions of Section 4.1 would apply, but shall, thereafter and
before the distribution to stockholders thereof, legally abandon its
plan to pay or deliver such dividend or distribution, then thereafter
no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.
(e) Maximum Exercise Price. Except as provided in Section 4.1
above, at no time shall the Exercise Price per share of Common Stock
exceed the amount set forth in the first paragraph of the preamble of
this Warrant.
(f) Certain Limitations. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction that,
by reason of any adjustment under Section 4.1, 4.2, 4.3, 4.4, 4.6 and
4.8 above, as applicable, would cause the Exercise Price to be less
than the par value of the Common Stock, if any, unless the Company
first reduces the par value of the Common Stock to be less than the
Exercise Price that would result from such transaction.
(g) Tax Adjustments. The Company may make such reductions in
the Exercise Price or increase in the number of Common Stock to be
received by any Holder upon the exercise or exchange of this Warrant,
in addition to those adjustments required by this Section 4, as it in
its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Common Stock, or any issuance
wholly for cash of any shares of Common Stock, or any issuance wholly
for cash of shares of Common Stock or Convertible Securities, or any
stock dividend, or any issuance of Stock Purchase Rights hereinafter
made by the Company to the holders of its Common Stock shall not be
taxable to such holders.
(h) Certain Business Combinations. The Company will not merge
or consolidate with or into, or sell, transfer or lease all or
substantially all of its property to, any other entity unless the
successor or purchasing entity, as the case may be (if not the
Company), shall expressly agree to provide to each Holder the
securities, cash or property required by Section 4.6 hereof upon the
exercise or exchange of this Warrant and expressly assumes, by
supplemental agreement, the due and punctual performance and
observance of each and every covenant and condition of this Warrant
to be performed and observed by the Company; provided, however, that
the initial obligation of such successor with respect to the exercise
or exchange of this Warrant shall be only as set forth in Section
4.6.
(i) Notice of Adjustments. Whenever the number of shares of
Common Stock for which this Warrant is exercisable or the Exercise
Price shall be adjusted pursuant to this Section 4, the Company shall
forthwith prepare a certificate to be executed by the chief financial
officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was
calculated, specifying the number of shares of Common Stock for which
this Warrant is exercisable and (if such adjustment was made pursuant
to Section 4.6) describing the number and kind of any other shares of
stock or Other Property for which this Warrant is exercisable, and
any related change in the Exercise Price, after giving effect to such
adjustment or change. The Company shall promptly cause a signed copy
of such certificate to be delivered to each Holder in accordance with
Section 14.3. The Company shall keep at its principal office or at
the Designated Office, if different, copies of all such certificates
and cause the same to be available for inspection at said office
during normal business hours by any Holder or any prospective
transferee of a Warrant designated by a Holder thereof.
(j) Independent Application. Except as otherwise provided
herein, all subsections of this Section 4 are intended to operate
independently of one another (but without duplication). If any single
transaction would require adjustment of the Exercise Price pursuant
to more than one subsection of this Section 4, only one adjustment
shall be made and such adjustment shall be the amount of adjustment
which has the highest absolute value.
5. NO IMPAIRMENT
The Company shall not by any action, including, without
limitation, amending its charter documents or through any reorganization,
reclassification, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other similar voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment. Without
limiting the generality of the foregoing, the Company shall take all such
action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, free and clear of all Liens, and
shall use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction over it as may
be necessary to enable the Company to perform its obligations under this
Warrant.
6. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Original Issue Date, the Company shall at
all times reserve and keep available for issuance upon the exercise of the
Warrants such number of its authorized but unissued shares of Common Stock
as will be sufficient to permit the exercise in full of all outstanding
Warrants. All shares of Common Stock issuable pursuant to the terms hereof,
when issued upon exercise of this Warrant with payment therefor in
accordance with the terms hereof, shall be duly and validly issued and
fully paid and nonassessable, not subject to preemptive rights and shall be
free and clear of all Liens. Before taking any action that would result in
an adjustment in the number of shares of Common Stock for which this
Warrant is exercisable or in the Exercise Price, the 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
over such action. If any shares of Common Stock required to be reserved for
issuance upon exercise of Warrants require registration or qualification
with any governmental authority under any federal or state law (other than
under the Securities Act or any state securities law) before such shares
may be so issued, the Company will in good faith and as expeditiously as
possible and at its expense endeavor to cause such shares to be duly
registered or qualified, as the case may be.
7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS
7.1. Notices of Corporate Actions. In the event of: (a) any
taking by the Company of a record of the holders of any class of securities
for the purpose of determining the holders thereof who are entitled to
receive any dividend or distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of capital stock of any class or
any other securities, (b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger involving the Company and any other Person or
any transfer or other disposition of all or substantially all the assets of
the Company to another Person or (c) any voluntary or involuntary
dissolution, liquidation or winding-up of the Company, (d) any amendment of
the Certificate of Incorporation of the Company, (e) any registration or
public offering of Common Stock or (f) any action taken by the Company
which could in any way dilute the Common Stock for which this Warrant is
exercisable, the Company shall mail to each Holder of a Warrant in
accordance with the provisions of Section 14.3 hereof a notice specifying
(i) the date or expected date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right and (ii) the date or
expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, disposition,
dissolution, liquidation, winding-up or other event is to take place, the
time, if any such time is to be fixed, as of which the holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for
the securities or Other Property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
disposition, dissolution, liquidation, winding-up or other event and a
description in reasonable detail of the transaction. Such notice shall be
mailed to the extent practicable under the circumstances as determined in
the reasonable judgment of an officer of the Company at least fifteen (15)
days prior to the date therein specified, and shall describe the material
tesms of the matter in question. In the event that the Company at any time
sends any other notice to the holders of its Common Stock, it shall
concurrently send a copy of such notice to each Holder of a Warrant.
7.2. Taking of Record. In the case of all dividends or other
distributions by the Company to the holders of its Common Stock with
respect to which any provision of any Section hereof refers to the taking
of a record of such holders, the Company will in each such case take such a
record and will take such record as of the close of business on a Business
Day.
7.3. Closing of Transfer Books. The Company shall not at any
time, except upon dissolution, liquidation or winding up of the Company,
close its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.
7.4. No Rights as Stockholders. Except as provided herein,
Holders shall have no rights as holders of Common Stock of the Company
solely as a result of being the Beneficial Owner of a Warrant. Holders
shall have no right to vote, consent or otherwise participate with respect
to matters submitted to a vote of the stockholders of the Company.
8. TRANSFER
The Holder, by acceptance of this Warrant, agrees to be bound
by the provisions of this Section 8.
8.1. Restrictions on Transfer. Neither this Warrant nor any
shares of Restricted Common Stock issued upon the exercise hereof shall be
Transferred other than pursuant to an effective registration statement
under the Securities Act or an exemption from the registration provisions
thereof. The Holder of this Warrant by its acceptance hereof agrees to
offer, sell or otherwise transfer such Warrant, prior to the date (the
"Resale Restriction Termination Date") which is two years after the later
of the Original Issue Date and the last date on which the company or any
affiliate of the company was the owner of this Warrant (or any predecessor
of this Warrant), only (a) to the Company, (b) pursuant to a registration
statement that has been declared effective under the Securities Act, (c)
for so long as this Warrant is eligible for resale pursuant to Rule 144A
under the Securities Act ("Rule 144A"), to a person it reasonably believes
is a "qualified institutional buyer" as defined in Rule 144A that purchases
for its own account or for the account of a qualified institutional buyer
to whom notice is given that the transfer is being made in reliance on Rule
144A, (d) to an "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is an institutional
accredited investor acquiring the security for its own account or for the
account of such an institutional accredited investor for investment
purposes and not with a view to or for offer or sale in connection with any
distribution in violation of the Securities Act or (e) pursuant to any
other available exemption from the registration requirements of the
Securities Act, including the exemption provided for by Rule 144 (if
available), subject to the Company's right prior to any such offer, sale or
transfer pursuant to clauses (d) or (e) to require the delivery of an
Opinion of Counsel, certification and/or other information satisfactory to
it. The legends contained in Section 8.2 below will be removed upon the
written request of the Holder after the Resale Restriction Termination
Date. In connection with any Transfer, the Holder will deliver to the
Company such certificates and other information as the Company may require
to confirm that the transfer complies with the foregoing restrictions.
Holders of the Warrants or the Restricted Common Stock, as the case may be,
shall not be entitled to Transfer such Warrants or such Restricted Common
Stock except in accordance with this Section 8.1.
8.2. Restrictive Legends.
(a) Except as otherwise provided in this Section 8, each
certificate for Warrant Stock initially issued upon the exercise of this
Warrant, and each certificate for Warrant Stock issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted
with two legends in substantially the following forms:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING THE
EXEMPTION PROVIDED FOR BY RULE 144 (IF AVAILABLE), SUBJECT TO THE
COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT. THIS
LEGEND WILL BE REMOVED UPON THE WRITTEN REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE. IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES
AND OTHER INFORMATION AS THE COMPANY MAY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE
BENEFIT OF AND ARE SUBJECT TO CERTAIN OBLIGATIONS SET FORTH IN THE
WARRANT PURSUANT TO THE EXERCISE OF WHICH SUCH SHARES WERE ISSUED. A
COPY OF SUCH WARRANT IS AVAILABLE AT THE EXECUTIVE OFFICES OF THE
COMPANY."
(b) Except as otherwise provided in this Section 8, each
Warrant shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"NEITHER THE WARRANTS REPRESENTED BY THIS CERTIFICATE NOR ANY OF THE
SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAW. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, INCLUDING THE EXEMPTION PROVIDED FOR BY RULE 144 (IF
AVAILABLE), SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
IT. THIS LEGEND WILL BE REMOVED UPON THE WRITTEN REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE. IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND
OTHER INFORMATION AS THE COMPANY MAY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
8.3. Termination of Securities Law Restrictions.
Notwithstanding the foregoing provisions of Section 8, the restrictions
imposed by Section 8.1 upon the transferability of the Warrants and the
Restricted Common Stock and the legend requirements of Section 8.2 shall
terminate as to any particular Warrant or shares of Restricted Common Stock
when the Company shall have received from the holder thereof an Opinion of
Counsel to the effect that such legend is not required in order to ensure
compliance with the Securities Act. Whenever the restrictions imposed by
Sections 8.1 and 8.2 shall terminate as to this Warrant, as hereinabove
provided, the Holder hereof shall be entitled to receive from the Company,
at the expense of the Company, a new Warrant bearing the following legend
in place of the restrictive legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN
WARRANT CONTAINED IN SECTIONS 8.1 AND 8.2 HEREOF
TERMINATED ON ______________, 20__, AND ARE OF NO FURTHER
FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or combination
of, or in substitution for, any Warrant or Warrants entitled to bear such
legend shall have a similar legend endorsed thereon. Wherever the
restrictions imposed by this Section shall terminate as to any share of
Restricted Common Stock, as hereinabove provided, the holder thereof shall
be entitled to receive from the Company, at the Company's expense, a new
certificate representing such Common Stock not bearing the restrictive
legend set forth in Section 8.2(a).
8.4. Listing on Securities Exchange. If the Company shall list
any shares of Common Stock on any securities exchange or on NASDAQ, it
shall at its expense, to the extent permitted by the rules of such
securities exchange or NASDAQ, list thereon, maintain and, when necessary,
increase such listing of, all shares of Warrant Stock issued or, to the
extent permissible under the applicable securities exchange rules, issuable
upon the exercise of this Warrant.
8.5. Nominees for Beneficial Owners. In the event that any
Warrant Stock is held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of
such Warrant Stock for purposes of any request or other action by any
holder or holders of Warrant Stock pursuant to this Warrant or any
determination of any number or percentage of shares of Warrant Stock held
by any holder or holders of Warrant Stock contemplated by this Agreement.
If the beneficial owner of any Warrant Stock so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Warrant Stock; provided, however, that in no event shall
there be "double-counting" of Warrants or Warrant Stock.
8.6 Payment of Taxes. The Company shall not be required to
issue or deliver Warrant Stock or a new Warrant unless or until the Person
or Persons requesting the issuance thereof shall have paid to the Company
the amount of any applicable transfer or stamp taxes or shall have
established to the reasonable satisfaction of the Company that such taxes
have been paid or are not due and owing.
9. SUPPLYING INFORMATION; RULE 144
The Company shall cooperate with each holder of a Warrant and
each holder of Warrant Stock in supplying such information as may be
reasonably necessary for such holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a
condition to the availability of an exemption from the Securities Act for
the sale of any Warrant or shares of Warrant Stock. The Company shall use
its best efforts to at all times make public information available so as to
afford the holders of the Warrants and the Warrant Stock the benefits of
Rule 144 of the Commission in connection with resales, and upon request of
any Holder shall provide such Holder with such financial statements,
reports and other information as may be required to permit such Holder to
sell Warrants or shares of Warrant Stock to one or more "Qualified
Institutional Buyers" under Rule 144A of the Commission, in each case as
such Rule may be amended from time to time or replaced or supplemented by
any similar rule or regulation hereafter adopted by the Commission.
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it
and, in case of mutilation, upon surrender and cancellation hereof, the
Company will execute and deliver in lieu hereof a new Warrant of like tenor
to such Holder; provided, however, in the case of mutilation, no indemnity
shall be required if this Warrant in identifiable form is surrendered to
the Company for cancellation.
11. OFFICE OF THE COMPANY
As long as any of the Warrants remain outstanding, the Company
shall maintain an office or agency, which may be the principal executive
offices of the Company (the "Designated Office"), where the Warrants may be
presented for exercise, registration of transfer, division or combination
as provided in this Warrant. Such Designated Office shall initially be the
office of the Company at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000. The
Company may from time to time change the Designated Office to another
office of the Company or its agent within the United States by notice given
to all registered holders of Warrants at least ten (10) Business Days prior
to the effective date of such change.
12. INVESTMENT REPRESENTATIONS OF HOLDER
(a) The Holder hereby represents that this Warrant is being,
and any shares of Warrant Stock issued upon exercise hereof shall be,
acquired for its own account, and that it has no intention of distributing
any such securities in violation of the federal or any applicable state
securities laws.
(b) The Holder hereby acknowledges that it is able to bear the
economic risk of its investment in this Warrant (and any investment in
shares of Warrant Stock upon exercise hereof) for an indefinite period of
time.
(c) The Holder hereby represents that it has had an opportunity
to ask questions and receive answers concerning this Warrant and to obtain
whatever information concerning the Company as has been requested by the
Holder in order to make its investment decision with respect to this
Warrant.
(d) The Holder hereby represents that it is (i) an "accredited
investor" for purposes of Regulation D promulgated under the Securities Act
and (ii) sophisticated in financial matters and able to evaluate the risks
and benefits of an investment in this Warrant (and any investment in shares
of Warrant Stock upon exercise hereof).
13. REGISTRATION RIGHTS
Holders of the Warrants and the Warrant Stock shall be entitled
to the benefit of the Registration Rights Agreement.
14. MISCELLANEOUS
14.1. Commission Reports. If at any time within two years from
the date hereof, the Company is not subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall use its
reasonable best efforts to file with the Commission (if permitted by
Commission practice and applicable laws and regulations) and provide the
Holders within 15 days after it files them with the Commission (or if not
permitted, within 15 days after it would have otherwise been required to
file them with the Commission), copies of its annual report and the
information, documents and other reports that are specified in Sections 13
and 15(d) of the Exchange Act to the extent applicable to the Company at
such time. In addition, so long as the Common Stock of the Company is
publicly traded, the Company shall furnish to the Holders, promptly upon
their becoming available, copies of the annual report to shareholders and
any other information provided by the Company to its public shareholders
generally.
14.2. Nonwaiver. No course of dealing or any delay or failure
to exercise any right hereunder on the part of the Company or the Holder
shall operate as a waiver of such right or otherwise prejudice the rights,
powers or remedies of such Person.
14.3. Notice Generally. Any notice, demand, request, consent,
approval, declaration, delivery or communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or
made if in writing and either delivered in person with receipt acknowledged
or sent by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
(a) if to any Holder of this Warrant or holder of Warrant Stock
issued upon the exercise hereof, at its last known address appearing
on the books of the Company maintained for such purpose;
(b) if to the Company, at its Designated Office;
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration, delivery or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged, or three (3)
Business Days after the same shall have been deposited in the United States
mail, or one (1) Business Day after the same shall have been delivered to
Federal Express or another overnight courier service.
14.4. Limitation of Liability. No provision hereof, in the
absence of affirmative action by the Holder to purchase shares of Common
Stock, and no enumeration herein of the rights or privileges of the Holder
hereof, shall give rise to any liability of such Holder to pay the Exercise
Price for any Warrant Stock other than pursuant to an exercise of this
Warrant or any liability as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
14.5. Remedies. Each holder of Warrants and/or Warrant Stock,
in addition to being entitled to exercise its rights granted by law,
including recovery of damages, shall be entitled to specific performance of
its rights provided under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason
of a breach by it of the provisions of this Warrant and hereby agrees, in
an action for specific performance, to waive the defense that a remedy at
law would be adequate.
14.6. Successors and Assigns. Subject to the provisions of
Sections 3.1, 8.1 and 8.2, this Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the
Company and the permitted successors and assigns of the Holder hereof. The
provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and to the extent applicable, all
holders of shares of Warrant Stock issued upon the exercise hereof
(including permitted transferees), and shall be enforceable by any such
holder.
14.7. Amendment. This Warrant and all other Warrants may be
modified or amended or the provisions hereof waived with the written
consent of the Company and the Majority Warrant Holders, provided that no
such Warrant may be modified or amended to reduce the number of shares of
Common Stock for which such Warrant is exercisable or to increase the price
at which such shares may be purchased upon exercise of such Warrant (before
giving effect to any adjustment as provided therein) without the written
consent of the holder thereof.
14.8. 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 provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Warrant.
14.9. 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.
14.10. GOVERNING LAW; JURISDICTION. IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, EXCEPT WITH RESPECT TO THE
VALIDITY OF THIS WARRANT, THE ISSUANCE OF WARRANT STOCK UPON EXERCISE
HEREOF AND THE RIGHTS AND DUTIES OF THE COMPANY WITH RESPECT TO
REGISTRATION OF TRANSFER, WHICH SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF DELAWARE. THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN NEW YORK CITY SHALL HAVE, EXCEPT AS SET FORTH
BELOW, EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN THE COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS
WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT,
PROVIDED, THAT IT IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY
HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK CITY.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by a duly authorized officer with effect from the date first
set forth above.
CORECOMM LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
ANNEX A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ shares Common Stock of
CoreComm Limited and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the
name of and delivered to _________________ whose address is
___________________________________________________ and, if such shares of
Common Stock shall not include all of the shares of Common Stock issuable
as provided in this Warrant, that a new Warrant of like tenor and date for
the balance of the shares of Common Stock issuable hereunder be delivered
to the undersigned.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ANNEX B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant, with respect to
the number of shares of Common Stock set forth below:
No. of Shares of
Name and Address of Assignee Common Stock
and does hereby irrevocably constitute and appoint ______________________
attorney-in-fact to register such transfer onto the books of CoreComm
Limited maintained for the purpose, with full power of substitution in the
premises.
Dated:___________________ Print Name:____________________
Signature:_____________________
Witness:_______________________
NOTICE: The signature on this assignment must correspond with the name
as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
