Exhibit 10.04
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE AND THIS WARRANT AND SUCH SECURITIES
MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT THEREFOR OR AN
APPLICABLE EXEMPTION FROM REGISTRATION THEREFROM UNDER SAID ACT AND
SUCH LAWS.
Hyperion Telecommunications, Inc.
Warrant for the Purchase of Shares
of Class A Common Stock
FOR VALUE RECEIVED and subject to the terms and conditions contained
herein, Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company"), hereby certifies that for value received MCImetro Access
Transmission Services, Inc., or its permitted assigns, are entitled to purchase
from the Company at any time or from time to time during the Exercise Period (as
defined below) any or all of the Warrant Shares (as defined below) for the
Exercise Price (as defined below). The Exercise Price shall not be subject to
adjustment, except as set forth in paragraph 3 hereof.
1. Definitions.
As used in this Warrant, the following terms have the respective
meanings set forth below:
"Affiliate" of a Person means any Person who directly or
indirectly controls, is controlled by or is under common control with such other
Person.
"Business Day" means any day that is not a Saturday, a Sunday
or a legal holiday in New York City.
"Capital Stock" means any and all shares, interests,
participations, or other equivalents (however designated) of capital stock, or
any and all equivalent ownership interests.
"Class A Common Stock" means the Class A Common Stock of the
Company, $.01 par value per share, and any capital stock into which such Class A
Common Stock may be changed after the Issue Date and shall also include shares
of common stock of any successor or acquiring corporation referred to in
paragraph 3(c) received by or distributed to the holders of such capital stock
in the circumstances contemplated by paragraph 3(c).
"Class B Common Stock" means the Class B Common Stock of the
Company, $.01 par value per share.
"Common Stock" means the Class A Common Stock and Class B
Common Stock of the Company and any Capital Stock into which such common stock
may be changed on or after the Issue Date and any class or series of Capital
Stock of the Company (regardless of how denominated), that has the right
(subject to any prior rights of any other class or series of stock) to
participate in any distribution of the assets or earnings of the Company without
effective or practical limit as to per share amount and shall also include
shares of common stock of any successor or acquiring corporation referred to in
paragraph 3 (c) received by or distributed to the holders of such Capital Stock
in the circumstances contemplated by paragraph 3(c).
"Current Market Price," as of any date with respect to any
security, means the average of the Quoted Prices of such security for the twenty
(20) consecutive trading days (or, if such security is publicly traded but has
been so traded for less than twenty (20) consecutive trading days, such shorter
period in which such security has been publicly traded) immediately preceding
such date; provided, however, that, if an event described in clauses (i) through
(iii) of paragraph 3(a) occurs with respect to such security during the period
from the first of such consecutive trading days through the last of such
consecutive trading days, the computation of Current Market Price shall be
appropriately adjusted to take account of such event. "Quoted Price" of any
security for any date shall be the last reported sales price (or, in case no
such sale takes place on such date, the average of the reported closing bid and
ask prices) of such security as reported by the principal national securities
exchange on which such security is listed or traded, or as reported by the
Nasdaq National Market, or if such security is neither so reported nor listed or
traded, the average of the last reported bid and ask prices of such security in
the over-the-counter market on such date. If such security is not listed or
traded on any national securities exchange or quoted in the over-the-counter
market, the Current Market Price shall be deemed an amount mutually agreed upon
between the Company and the Holder, and if no agreement can be reached, then the
Current Market Price of such security as of any date shall be the fair market
value thereof as determined by an independent nationally recognized investment
banking firm selected by investment banking firms representing each of the
Company and the Holder. The Company and Holder shall share equally all costs of
all determinations of fair market value by such nationally recognized investment
banking firm.
"Exercise Date" means the date on which the Holder exercises
this Warrant, in whole or in part.
"Exercise Period" means the period commencing on the Issue
Date and ending at 5:00 p.m., Eastern standard time, on the Termination Date.
"Exercise Price" means a price for each Warrant Share equal to
$6.15 per share of Class A Common Stock, subject to adjustment on or after the
Issue Date pursuant only to the provisions of paragraph 3 of this Warrant.
"Holder" means MCI or any permitted transferee of this
Warrant.
"Issue Date" means the date upon which this Warrant is
originally issued.
"MCI" means MCImetro Access Transmission Services, Inc., a
Delaware corporation.
"Merger Triggering Event" has the meaning assigned to that
term in paragraph 3(c).
"Person" means any individual, sole proprietorship,
partnership, corporation, limited liability company, joint venture, trust,
association, institution, public benefit corporation, governmental agency or
other entity and the heirs, executors, administrators, legal representatives,
successors and assigns of such Person, as the context may require.
"Public Offering" means the sale and issuance by the Company
of at least three million (3,000,000) shares (which number shall be
appropriately adjusted to take account of any event described in clauses (i)
through (iii) of paragraph 3(a)) of Class A Common Stock pursuant to an
effective registration statement filed under the Securities Act with the
Securities and Exchange Commission, which is underwritten on a firmly committed
basis.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of June 13, 1997, between the Company and MCImetro Access
Transmission Services, Inc.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the regulations promulgated thereunder.
"Termination Date" means the third anniversary of the Issue
Date; provided, however, that if, on such date, the Company is then required,
pursuant to an effective request therefor by the Holder, to effect, or is in the
process of effecting, a registration under the Securities Act for an
underwritten public offering in which Warrant Shares are, pursuant to the
Registration Rights Agreement, entitled to be included, or if the Company is in
default of any obligations created by this Warrant or by the Registration Rights
Agreement, the Termination Date shall be deemed to be, and the right to exercise
this Warrant and purchase Warrant Shares shall expire at 5:00 p.m., Eastern
standard time, on, the 30th day following the date on which such registration
shall have become effective (but in no event later than 180 days beyond the date
this Warrant otherwise would have expired) or on the 30th day following the date
all of such defaults have been cured, as the case may be; and provided, further,
that if an approval or waiver is required to be obtained from a governmental
authority (or a filing with a governmental authority and/or expiration of a
period of time following such filing) in order for an exercise of this Warrant,
in whole or in part, or the issuance of any or all of the Warrant Shares upon
such exercise, to comply with applicable law (including, without limitation, the
Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976, as amended) and the
Holder delivers to the Company on or prior to the last date with respect to
which this Warrant can be exercised with respect to such Warrant Shares a
written notification of the Holder's intent to exercise this Warrant and
evidence reasonably satisfactory to the Company that the Holder has made all
filings required to be made by the Holder to obtain such approval or waiver or
to satisfy any other filing requirements, and a request that the Company make
all filings required to be made by the Company to obtain such approval or waiver
or to satisfy any other filing requirements, and the Holder thereafter
diligently continues to attempt to obtain such approval or waiver and/or
expiration of waiting period, then the Termination Date shall be deemed to be,
and the last date on which this Warrant can be exercised with respect to such
Warrant Shares shall be extended through, the date five Business Days after the
date on which a final ruling is made with respect to the filing(s) requesting
such approval or waiver or the expiration of such waiting period, as the case
may be. The Company agrees to provide reasonable assistance to, and cooperate
with, the Holder in making such filings required to be made by the Holder, and
the Company shall make all filings required to be made by the Company, for
obtaining such approvals or waivers or to satisfy any other filing requirements,
as are necessary for the exercise of this Warrant by the Holder not to
constitute a violation of any other law or regulation.
"Transaction Consideration" has the meaning assigned in
paragraph 3(c).
"Warrant Consideration Amount" has the meaning specified in
Section 2(b) hereof
"Warrant Shares" means any of the shares of Class A Common
Stock issuable upon exercise of this Warrant. The number of Warrant Shares shall
initially be 8,975 shares of Class A Common Stock, subject to adjustment on or
after the Issue Date pursuant only to the provisions of paragraph 3 of this
Warrant.
2. Exercise of Warrant.
(a) This Warrant may be exercised, in whole at any time
or in part from time to time, during the Exercise Period, by the Holder
by the surrender of this Warrant (with the subscription duly executed)
at the address set forth in paragraph 11(a) hereof, together with
proper payment of the Exercise Price. Payment for the Warrant Shares to
be purchased shall be made by wire transfer or certified or official
bank check payable to the order of the Company. If this Warrant is
exercised in part, this Warrant must be exercised for a whole number of
shares of the Class A Common Stock, and the Holder is entitled to
receive a new Warrant covering the number of Warrant Shares in respect
of which this Warrant has not been exercised. Upon such surrender of
this Warrant, the Company will issue a certificate or certificates in
the name of the Holder for the number of shares of the Class A Common
Stock to which the Holder shall be entitled. The Company shall not be
required to issue a fractional share of Class A Common Stock upon any
exercise of this Warrant, but the Company shall pay an amount in cash
equal to the Current Market Price for one Warrant Share on the date the
Warrant is exercised, multiplied by the fraction of a Warrant Share
that would be issuable on the exercise of this Warrant.
(b) In the event any Holder elects upon exercise to
surrender this Warrant for payment of the applicable Exercise Price for
the shares being purchased, this Warrant shall be surrendered and
canceled. To the extent any Holder elects to pay all or part of the
Exercise Price by surrendering this Warrant to the Company, the number
of purchasable shares under this Warrant required to be surrendered as
payment for the Exercise Price (the "Warrant Consideration Amount")
shall be equal to that number obtained by dividing (i) that amount of
the aggregate Exercise Price that any Holder elects by written notice
to the Company to pay by the application of this Warrant (such notice
setting forth, in addition, the required reduction in the number of
shares purchasable by this Warrant as calculated and shown in
sufficient detail in accordance with the immediately succeeding
clause), by (ii) the difference obtained by subtracting (A) the
Exercise Price per share on the date of exercise from (B) the Current
Market Price of the Warrant Shares on the date of exercise.
(c) In the event of any exercise of the rights
represented by this Warrant, (i) certificates for the shares of Warrant
Shares so purchased shall be dated the date of such exercise and
delivered to the Holder hereof within a reasonable time, not exceeding
five Business Days after such exercise, and the Holder hereof shall be
deemed for all purposes to be the Holder of the shares of Warrant
Shares so purchased as of the date of such exercise, and (ii) unless
this Warrant has expired, a new Warrant representing the number of
shares equal to (A) the number of shares purchasable under this Warrant
less (B) the sum of (1) the number of shares of Warrant Shares
purchased upon exercise and (2) the Warrant Consideration Amount, if
any, shall be issued to the Holder hereof within such time.
3. Certain Adjustments. The Exercise Price and the kind and number of
shares of Class A Common Stock issuable upon exercise of this Warrant shall be
subject to adjustment as set forth below in this paragraph 3. The Company shall
give the registered Holder notice of any event described below which requires an
adjustment pursuant to this paragraph 3 in accordance with the provisions of
paragraph 4.
(a) Stock Dividends, Subdivisions and Combinations. If
at any time the Company shall:
(i) fix a record date for the purpose of
determining the holders of its Common Stock entitled to
receive a dividend payable in, or other distribution of,
Additional Shares of Common Stock;
(ii) subdivide its outstanding shares of Common
Stock into a larger number of shares of Common Stock;
(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 or
other Securities by reclassification of the Common Stock
(other than pursuant to paragraph 3(c) below); then the
Exercise Price shall be proportionately decreased in the case
of such a dividend or distribution of Additional Shares of
Common Stock or such a subdivision, or proportionately
increased in the case of such a combination, or the kind of
capital stock or other securities of the Company which may be
purchased shall be adjusted in the case of such a
reclassification of the Common Stock, each on the record date
for such dividend or distribution or effective date of such
subdivision, combination or reclassification, as the case may
be, such that the Holder shall be entitled to receive, upon
exercise of this Warrant, the aggregate number and kind of
shares of Common Stock which, if this Warrant had been fully
exercised immediately prior to such date, it would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, distribution, subdivision, combination or
reclassification.
(b) Certain Other Dividends and Distributions. If at any
time the Company shall fix a record date for the purpose of determining
the holders of its Common Stock entitled to receive any dividend or
other distribution (including any such distribution made in connection
with a consolidation or merger, but excluding any distribution referred
to in subparagraph (a) above) of:
(i) any evidences of indebtedness, any shares
of its capital stock (including Convertible Securities but
excluding Common Stock) or any other securities or property of
any nature whatsoever (including cash but excluding normal
cash dividends or cash distributions permitted under
applicable law so long as in each case such cash is payable
solely out of earnings or earned surplus of the Company); or
(ii) any warrants or other rights to subscribe
for or purchase any evidences of its indebtedness, any shares
of its capital stock (including Convertible Securities) or any
other of its securities or its property of any nature
whatsoever;
then the Exercise Price shall be adjusted to equal the
Exercise Price in effect prior to such distribution or
dividend multiplied by a fraction, (A) the numerator of which
shall be (1) the Current Market Price per share of the Class A
Common Stock on such record date minus (2) the amount
allocable to one share of Class A Common Stock of the fair
value of any and all such evidences of indebtedness, shares of
stock, other securities or property or warrants or other
subscription or purchase rights so distributable (as
determined in good faith by the Board of Directors of the
Company and, unless waived by the Holder, supported by an
opinion from an investment banking firm of nationally
recognized standing approved by the Holder, which approval
shall not be unreasonably withheld), and (B) the denominator
of which shall be such Current Market Price per share of Class
A Common Stock on such record date. Such adjustments shall be
made whenever such a record date is fixed. A reclassification
of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value)
into shares of Common Stock and shares of any other class of
stock shall be deemed a distribution by the Company to the
holders of its Common Stock of such shares of such other class
of stock within the meaning of this subparagraph (b) and, if
the outstanding shares of Common Stock shall be changed into a
larger or smaller number of shares of Common Stock as a part
of such reclassification, such change shall be deemed a
subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of
subparagraph (a). The Company shall give to the Holder of this
Warrant not less than twenty (20) days' prior notice of any
record date referred to in this subparagraph (b) in accordance
with the provisions of paragraph 4.
(c) Adjustments for Consolidation, Merger, Sale of
Assets, Reorganization, etc.
(i) In case the Company after the date hereof
(A) shall consolidate with or merge into any other Person and
shall not be the continuing or surviving corporation of such
consolidation or merger, or (B) shall permit any other Person
to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection
with such consolidation or merger, the Class A Common Stock
shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property,
or (C) shall transfer all or substantially all of its
properties or assets to any other Person or (D) shall effect a
capital reorganization or reclassification of the Class A
Common Stock (other than a capital reorganization or
reclassification for which adjustment in the Exercise Price is
provided in subparagraph 3(a) or subparagraph 3(b)), then, and
in the case of each such transaction, proper provision shall
be made so that, upon the basis and the terms and in the
manner provided in this Warrant, the Holder of this Warrant
shall be entitled (x) upon the exercise hereof at any time
after the consummation of such transaction, to the extent this
Warrant is not exercised prior to such transaction, or is
redeemed in connection with such transaction, to receive at
the Exercise Price in effect at the time immediately prior to
the consummation of such transaction in lieu of the Class A
Common Stock issuable upon such exercise of this Warrant prior
to such transaction the stock and other securities, cash and
property to which such Holder would have been entitled upon
the consummation of such transaction if such Holder had
exercised the rights represented by this Warrant immediately
prior thereto, subject to adjustments (subsequent to such
corporate action) as nearly equivalent as possible to the
adjustments provided for in this paragraph 3 or (y) to sell
this Warrant (or, at such Holder's election, a portion
thereof) to the Person continuing after or surviving such
event specified in clauses (a) through (d) above, or to the
Company (if the Company is the continuing or surviving Person)
at a sales price equal to the amount of cash, property and/or
the number of shares of Common Stock or other securities to
which a holder of the number of shares of Class A Common Stock
which would otherwise have been delivered upon the exercise of
this Warrant or the portion hereof redeemed would have been
entitled upon the effective date or closing of any such event
specified in clauses (a) through (d) above (the "Event
Consideration"), less the amount or portion of such Event
Consideration having a fair value equal to the aggregate
Exercise Price applicable to this Warrant or the portion
hereof so sold.
(ii) Notwithstanding anything contained in this
Warrant to the contrary, the Company will not effect any of
the transactions described in clauses (a) through (d) of the
above subparagraph (i) unless, prior to the consummation
thereof, the surviving Person (if other than the Company) in
any merger or consolidation described in such clauses, each
Person which is to acquire the Company's assets in any
transaction described in clause (c) above, and each Person
(other than the Company) which may be required to deliver any
stock, securities, cash or property upon the exercise of this
Warrant as provided herein, shall assume, by written
instrument delivered to, and reasonably satisfactory to, the
Holder of this Warrant, (A) the obligations of the Company
under this Warrant (and if the Company shall survive the
consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any
continuing obligations of the Company under this Warrant) and
(B) the obligation to deliver to such Holder such shares of
stock, securities, cash or, property as, in accordance with
the foregoing provisions of this paragraph (c), such Holder
shall be entitled to receive, and such Person shall hive
similarly delivered to such Holder an opinion of counsel for
such Person, which counsel shall be reasonably satisfactory to
such Holder, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this
paragraph 3) shall be applicable to the stock, securities,
cash or property which such Person may be required to deliver
upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.
(iii) In case any of the transactions described
in clauses (A) through (D) of subparagraph (i) shall be
proposed to be effected (any such transaction a "Merger
Triggering Event"), the Holder of this Warrant may, and the
Company agrees that as a condition to the consummation of any
such Merger Triggering Event, the Company shall secure the
right of such Holder to, sell this Warrant (or, at such
Holder's election, a portion thereof) to the Person continuing
after or surviving such Merger Triggering Event, or the
Company (if the Company is the continuing or surviving
Person), simultaneously with, the effective date or closing of
such Merger Triggering Event, at a sale price equal to the
amount of cash, property and/or the number of shares of Common
Stock or other securities to which a holder of the number of
shares of Class A Common Stock which would otherwise have been
deliverable upon the exercise of this Warrant or the portion
hereof redeemed would have been entitled upon the effective
date or closing of such Merger Triggering Event (the
"Transaction Consideration"), less the amount or portion of
such Transaction Consideration having a fair value equal to
the aggregate Exercise Price applicable to this Warrant or the
portion hereof so sold. In the event that the Holder of this
Warrant exercises its rights under this subparagraph (iii) to
sell this Warrant (or a portion thereof) simultaneously with
the effective date or closing of any such Merger Triggering
Event, the Company shall not effect any such Merger Triggering
Event unless upon or prior to the consummation thereof such
amounts of cash, property, Common Stock, or other securities
are delivered to the Holder of this Warrant. Not less than
twenty (20) days' prior notice of any Merger Triggering Event
shall be given to the Holder of this Warrant in accordance
with paragraph 4.
(d) Adjustment of Number of Warrant Shares. Upon each
adjustment of the Exercise Price, as the case may be, pursuant to
subparagraph (a) or (b) of this paragraph 3, this Warrant shall be
deemed to evidence the right to purchase, at the adjusted Exercise
Price, that number of shares of Class A Common Stock obtained by
multiplying the number of shares of Class A Common Stock covered by
this Warrant immediately prior to such adjustment by the Exercise Price
in effect prior to such adjustment and dividing the product so obtained
by the Exercise Price in effect after such adjustment. If the Company
shall be in default under any provision of this Warrant so that shares
issued at the Exercise Price adjusted in accordance with the terms of
this Warrant would not be validly issued, the adjustment of number of
shares provided for in the foregoing sentence shall nonetheless be
made, and the Holder of this Warrant shall be entitled to purchase such
greater number of shares at the lowest price at which such shares may
then be validly issued under applicable law. Such exercise shall not
constitute a waiver of any claim arising against the Company by reason
of its default under this Warrant.
(e) When Adjustments to Be Made. No adjustment in the
Exercise Price shall be required by this paragraph 3 if such adjustment
either by itself or with other adjustments not previously made would
require an increase or decrease of less than 1% in such price. Any
adjustment representing a change of less than such minimum amount which
is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this paragraph
3 and not previously made, would result in a minimum adjustment.
Notwithstanding the foregoing, any adjustment carried forward shall be
made no later than ten Business Days prior to the Termination Date. All
calculations under this subparagraph (h) shall be made to the nearest
cent. For the purpose of any adjustment, any specified event shall be
deemed to have occurred at the close of business on the date of its
occurrence.
(f) Fractional Interests. In computing adjustments under
this paragraph 3, fractional interests in Common Stock shall be taken
into account to the nearest whole share.
(g) When Adjustments Not Required. If the Company shall
fix a record date for the purpose of determining the holders of its
Common Stock entitled to receive a dividend or distribution and 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.
(h) Certain Limitations. Subject to the provisions of
paragraph 6, there shall be no adjustment of the Exercise Price
hereunder to the extent that such adjustment would cause the Exercise
Price to be less than the par value per share of the Common Stock,
which par value shall not at any time while this Warrant is outstanding
exceed $.01.
(i) Other Action Affecting Common Stock. In case after
the date hereof the Company shall take any action affecting its Common
Stock, other than an action described in any of the foregoing
subparagraphs (a) through (k) of this paragraph 3, inclusive, and the
failure to make any adjustment would not fairly protect the purchase
rights represented by this Warrant in accordance with the essential
intent and principle of this paragraph 3, then the Exercise Price
and/or the number of Warrant Shares shall be adjusted in such manner
and at such time as the Board of Directors of the Company may in good
faith determine to be equitable in the circumstances.
4. Notices.
(a) Notices of Adjustments. Whenever the Exercise Price or the
number of Warrant Shares shall be adjusted pursuant to paragraph 3, the
Company shall forthwith deliver to the Holder a certificate prepared by
the Company, setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors
of the Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants
or other subscription or purchase rights), specifying the number of
Warrant Shares then issuable hereunder, the Exercise Price after giving
effect to such adjustment and (to the extent applicable) describing the
number and kind of any other shares of stock for which the Warrant is
exercisable. In the event that the Holder shall disagree with any such
adjustment or with the terms of any new agreement to be entered into
pursuant to paragraph 3(c), it shall notify the Company thereof and any
disagreement shall be resolved by an investment banking firm of
nationally recognized standing mutually agreeable to the Company and
the Holder, or if the Company and the Holder are unable to agree upon
an investment banking firm, an investment banking firm selected by an
investment banking firm chosen by the Company and an investment banking
firm chosen by the Holder.
(b) Notices of Corporate Action. In the event of any of
the following:
(i) 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 other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any
other right, which dividend, distribution or other right
affects the rights of the Holder, or
(ii) 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 party or any transfer of all or
substantially all the assets of the Company to any other
party, or
(iii) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
The Company will mail to the Holder a notice specifying (A) 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 any such dividend,
distribution or right and (B) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, 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 record of Class A
Common Stock (or other securities) shall be entitled to exchange their shares of
Class A Common Stock (or other securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be mailed at least twenty (20) days prior to the date herein
specified, in the case of any date referred to in the foregoing subdivision (A),
and at least twenty (20) days prior to the date therein specified, in the case
of the date referred to in the foregoing subdivision (B).
5. Reservation of Warrant Shares. The Company agrees that, upon
commencement of the Exercise Period and at all times prior to the Termination
Date, the Company will at all times have authorized and in reserve, and will
keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Class A Common Stock and other securities and
properties as from time to time shall be receivable upon the exercise of this
Warrant, free and clear of all restrictions on sale or transfer and free and
clear of all preemptive rights. 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 the Holders hereof against impairment. Without limiting the generality
of the foregoing, the Company will (a) not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Common Stock, free and clear of any liens, claims, encumbrances and restrictions
(other than as provided herein) upon the exercise of this Warrant, and (c) use
its best 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.
6. Fully Paid Stock; Taxes. The shares of Class A Common Stock
represented by each and every certificate for Warrant Shares delivered on the
exercise of this Warrant and the payment of the Exercise Price set forth herein
shall, at the time of such delivery, be validly issued and outstanding, fully
paid and nonassessable, and not subject to preemptive rights, and the Company
will take all such actions as may be necessary to assure that the par value or
stated value, if any, per share of the Class A Common Stock is at all times
equal to or less than the then Exercise Price. If the Exercise Price is at any
time less than the par value of the Warrant Shares or if the Warrant at any time
is exercisable by its delivery alone and without payment of any additional
consideration, the Company also covenants and agrees to cause to be taken such
action (whether by decreasing the par value of the Warrant Shares, the
conversion of the Warrant Shares from par value to no par value, or otherwise)
as will permit the exercise of this Warrant without any additional payment by
the Holder hereof (other than payment of the Exercise Price, if any, and
applicable transfer taxes, if any) and the issuance of the Warrant Shares, which
Warrant Shares, upon such issuance, will be fully paid and non-assessable. The
Company further covenants and agrees that it will pay, when due and payable, any
and all federal and state stamp, original issue or similar taxes which may be
payable in respect of the issuance of any Warrant Shares or certificate therefor
and that the Warrant Shares will be otherwise free from all taxes, liens and
charges with respect to issuance.
7. Transferability. Upon execution and delivery of an assignment
instrument substantially in the form attached hereto, as assignee shall be a
party to this Agreement and shall have the rights and obligations of the Holder,
to the extent of such assignment, and the Holder shall be released from its
obligations hereunder to a corresponding extent. Upon the consummation of any
assignment permitted pursuant to this paragraph, the Holder and the Company
shall make appropriate arrangements, so that, if required, new Warrants shall be
issued to the Holder and the assignee. The Holder shall give the Company prior
written notice of the date that any such assignment shall become effective,
which date shall be no less than ten days after the date such notice is given.
8. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity or bond reasonably satisfactory to the Company, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant of the like
date, tenor and denomination.
9. Holder Not Shareholder. This Warrant does not confer upon the Holder
any right to vote or to consent to or receive notice as a shareholder of the
Company, as such, in respect of any matters whatsoever, or any other rights or
liabilities as a shareholder, prior to the exercise hereof.
10. Surrender. The Holder may at any time surrender all or a portion of
this Warrant for cancellation by transmitting same to the Company at its address
set forth herein accompanied by a written notice setting forth the Holder's
intention to surrender this Warrant (or such portion) for cancellation and upon
such transmittal by the Holder, this Warrant (or such portion) shall become null
and void and of no further force and effect.
11. Notices. Any notice, demand, request, consent, approval,
declaration, delivery or other 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) in the case of the Company, to:
Hyperion Telecommunications, Inc.
0 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxxx Ingersoll Professional Corporation
One Oxford Centre
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxxxxx, Xx.
(b) in the case of the Holder, to:
MCImetro Access Transmission Services, Inc.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
with a copy to:
MCI Telecommunications Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: General Counsel
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, 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 Business Days after the same shall have been
deposited in the United States mail. Failure or delay in delivering copies of
any notice, demand, request, approval, declaration, delivery or other
communication to the person designated above to receive a copy shall in no way
adversely affect the effectiveness of such notice, demand, request, approval,
declaration, delivery or other communication.
12. Miscellaneous.
(a) Remedies. 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 to
waive the defense in any action for specific performance that a remedy
at law would be adequate. Accordingly, it is agreed that the Holder
shall be entitled to an injunction, restraining order or other
equitable relief to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof. Such remedies
shall be cumulative and nonexclusive and shall be in addition to any
other rights and remedies the parties may have under this Agreement.
(b) No Inconsistent Agreements. The Company will not on
or after the date of this Warrant enter into any agreement with respect
to its Securities which is inconsistent with the rights granted to the
Holder in this Warrant, otherwise conflicts with the provisions hereof
or would be violated by the performance of the Company's obligations
hereunder. The Company represents and warrants that the rights granted
to the Holder hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's
Securities under any such agreements.
(c) Successors and Assigns. Subject to the provisions of
paragraph 7 hereof, this Warrant shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties.
(d) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
(e) Amendments and Waivers. The provisions of this
Warrant, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given unless the Company has obtained
the written consent of the Holder.
(f) Headings. The headings of this Warrant have been
inserted as a matter of convenience and shall not affect the
construction hereof.
(g) Applicable Law. This Warrant shall be governed by
and construed in accordance with the laws of the State of New York.
Each party hereto agrees to submit to the nonexclusive jurisdiction of
the courts in the City of New York in the State of New York in any
action or proceeding arising out of or relating to this Agreement.
(h) Registration Provisions. Except as provided in the
Registration Rights Agreement, the Company is not required under the
terms hereof to register any securities issued pursuant hereto, and the
subsequent transfer of any shares issued pursuant hereto may require
registration under the Securities Act as well as under applicable state
laws. In the event the shares issued upon the exercise of this Warrant
are not registered, the Holder acknowledges that any stock certificate
evidencing shares acquired on exercise of this Warrant shall contain a
legend restricting transferability substantially as follows:
THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE OFFERED OR SOLD UNLESS
REGISTERED AND/OR QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR AN
EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS
APPLICABLE. THEREFORE, NO SALE OR TRANSFER OF THIS SECURITY
SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE
ANY EFFECT TO ANY SUCH TRANSACTION, UNLESS (A) SUCH
TRANSACTION SHALL HAVE BEEN REGISTERED UNDER THE ACT AND
QUALIFIED OR APPROVED UNDER APPROPRIATE STATE SECURITIES LAWS,
OR (B) THE ISSUER SHALL HAVE FIRST RECEIVED AN OPINION OF
COUNSEL (WHO MAY BE INTERNAL COUNSEL OF MCI) REASONABLY
SATISFACTORY TO IT THAT SUCH REGISTRATION, QUALIFICATION OR
APPROVAL IS NOT REQUIRED.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its name by its President or an Executive or Senior Vice President
thereunto duly authorized.
Dated: June 5, 1998
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxx
Name:
Title:
Attested by:
/s/ Xxxxxx X. Xxxxxxx
Assistant Secretary
SUBSCRIPTION
The undersigned, __________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for and purchase 8,975 shares of
the Class A Common Stock of HYPERION TELECOMMUNICATIONS, INC., covered by said
Warrant, and makes payment therefor in full at the price per share provided by
said Warrant.
Dated:
(Signature)
(Address)
ASSIGNMENT
FOR VALUE RECEIVED, __________________, hereby sells, assigns and
transfers unto ____________________ the foregoing Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint
_______________________, attorney, to transfer said Warrant on the books of
HYPERION TELECOMMUNICATIONS, INC.
Dated:
(Signature)
(Address)
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ____________________ hereby assigns and transfers
unto _______________________ the right to purchase [ ] shares of the Class A
Common Stock of HYPERION TELECOMMUNICATIONS, INC. by the foregoing Warrant and
the rights evidenced thereby, and does irrevocably constitute and appoint
_______________________, attorney, to transfer said Warrant on the books of
HYPERION TELECOMMUNICATIONS, INC.
Dated:____________________
(Signature)
(Address)
