Exhibit 4.13
EXECUTION VERSION
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WARRANT
to Purchase Common Stock of
CORECOMM LIMITED
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Warrant No. CCL-2
Original Issue Date: January 25, 2001
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 " SECURITIES 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 DELIV
ERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
REASONABLY SATISFACTORY TO IT. THIS LEGEND WILL BE REMOVED UPON THE WRITTEN
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. IN
CONNEC TION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH
CERTIFICATES AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
Warrant No. CCL-2
WARRANT
CORECOMM LIMITED
THIS IS TO CERTIFY THAT XXXXXX XXXXXXX SENIOR
FUNDING 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"), 969,000 shares of Common Stock (subject to
adjustment as provided herein), at a purchase price of $3.71 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 "con trolled"
have meanings correlative to the foregoing.
"Beneficially Owned" or "Beneficial Owner" shall have the
interpre tation set 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 consti tuted 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.
"Credit Agreement" shall mean the credit agreement, dated as
of September 28, 2000, as amended, by and among the Company, CoreComm
Holdco, Inc., CoreComm Communications, Inc., the Lenders parties thereto
and The Chase Manhattan Bank, as Administrative Agent and Collateral Agent.
"Current Market Price" shall mean as of any specified date
the average of the daily market prices of the Common Stock for the twenty
(20) consecu tive Business Days immediately preceding such date. The "daily
market price" for each such Business Day shall be: (a) 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 (b) 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 Commis sion promulgated 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 January 25, 2011.
"Fair Value" per share of Common Stock as of any specified
date shall mean (a) if the Common Stock is publicly traded on such date,
the Current Market Price per share or (b) 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 delivered 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 (a) the Warrants
outstanding on such date, (b) any Convertible Securities outstanding on
such date and (c) 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 Convert ible
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,
hypotheca tion, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or
otier 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.
"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 reason ably 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 Xxxxxx Xxxxxxx Senior
Funding 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, special purpose vehicle,
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
Agree ment by and between the Company and Xxxxxx Xxxxxxx Senior Funding
Inc., entered into as of January 25, 2001, 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 promulgated 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:
(a) any issuance of Warrant Stock upon exercise of the Warrants;
(b) any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and any issuance of Common Stock pursuant to
the conver sion, 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;
(c) 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;
(d) any issuance of Common Stock paid as interest with
respect to Convertible Securities;
(e) any issuance of Common Stock upon exchange or redemption
of Convertible Securities;
(f) any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and any issuance of Common Stock pursuant to
the conver sion, 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;
(g) 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 Subsid iaries pursuant to an employee stock
option, stock incentive plan, employ ment agreement or consulting
agreement approved by the Board of Directors of the Company in good
faith;
(h) any issuance of Common Stock, Convertible Securities or
Stock Purchase Rights (and any issuance of Common Stock pursuant to
the conver sion, 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) (i) in
connection with the acquisition of another com pany, business or
assets thereof, (ii) to a lender in connection with a financing
transaction or the renegotiation of an existing transaction or
(iii) in connec tion with strategic transactions involving the
Company or any of its Subsid iaries and other entities, including
joint ventures, manufacturing, marketing or distribution agreements
or technology transfers or development agree ments;
(i) 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
(j) 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 of its Subsidiaries or by the Company and
one or more of its Subsidiaries, or any other business entity in which the
Company or one or more of its Subsidiaries or the Company and one or more
of its 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 Section 2(3) of the Securities Act.
"Warrant Price" shall mean an amount equal to (a) the number
of shares of Common Stock being purchased upon exercise of this Warrant
pursuant to Section 2.1 hereof, multiplied by (b) 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 (a) Transferred in a public offering pursuant to a registration
statement filed under the Securities Act or (b) 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 hereinaf ter 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 by the Company 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 desig nated to be named therein shall be
deemed to have become a holder of record of such shares of Common Stock for
all purposes, as of the Exercise Date, provided, how ever, 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 to the Company of a certified or official bank check in the amount
of such Warrant Price or (ii) without the payment of cash, by (1)
cancelling outstanding Loans (including accrued interest thereon through
the Exercise Date) held and designated by such Holder in an amount equal to
the Warrant Price, subject to appropriate allocation of cancelled Loans
among the parties to the Credit Agreement, (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 permitted 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
this Section 2.1(c) and Section 2.1(a), 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. 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 unpur chased shares of Warrant 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, includ ing any permitted transferee of such shares (other than a
permitted 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 reason ably 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 regis tered on the books of the Company to be maintained for
such purpose, upon surren der 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 Com mon 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 thereof 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 duly authorized 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:
(a) take a record of the holders of its Common Stock for the
pur pose of entitling them to receive a dividend payable in, or
other distribution of, additional shares of Common Stock;
(b) subdivide, split or reclassify its outstanding shares of
Common Stock into a larger number of shares of such Common Stock;
or
(c) 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
Subse quent 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 (1) 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 (2) 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 Out standing 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 consider ation 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 conver sion or exchange rights associated with
such Convertible Securities for a consider ation 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 actual 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 repur chased 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 adjust ment 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 Benefi cially 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 Sections 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), 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, reclassifica
tion, 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 corpora tion), 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 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, reclassifications, mergers, consolidations or dispositions
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 receiv able by the Company in connection with
the issuance, sale, grant or exercise of additional shares of Common Stock,
Stock Purchase Rights or Convertible Securi ties, irrespective of the
accounting treatment of such consideration, shall be valued as follows:
(a) Cash Payment. In the case of cash, the net amount
received by the Company after deduction of any underwriting
commissions or conces sions paid or allowed by the Company.
(b) 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.
(c) 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 consider ation received (computed as provided in (a) and
(b) above) shall be allocable to such shares of Common Stock as
determined in good faith by the Board of Directors of the Company.
(d) 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 Com pany, 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.
(e) 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.
(f) 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
Pur chase Rights or Convertible Securities, as is determined in
good faith by the Board of Directors of the Company.
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
Board of Directors of the Company (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 "xxxx xxx 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 redemp tion 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 princi ples hereof as
determined in good faith by the Board of Directors of the Company 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;
provided that in no circumstance shall a Holder or any of its Affiliates be
permitted to appoint themselves as or serve as a designee or be chosen as
such. 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 4. 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 distribu tion, 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 or equal to 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 Con vertible
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 an
authorized 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 Desig nated
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 neces sary
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 expedi tiously 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, (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 reorganiza tion, 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
terms 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 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 informa tion reasonably
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
Termina tion Date. In connection with any Transfer, the Holder will deliver
to the Company such certificates and other information as the Company may
reasonably 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 certifi cate, 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 SECURI TIES LAW. THE HOLDER OF THIS SECURITY BY ITS ACCEP
TANCE 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 COM PANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSU
ANT 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 BE LIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DE FINED IN RULE 144A THAT PURCHASES FOR
ITS OWN AC COUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITU TIONAL
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
ACCRED ITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO
OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURI TIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, INCLUDING THE EXEMPTION PRO VIDED 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, CERTIFICA TION AND/OR OTHER
INFORMATION REASONABLY SATIS FACTORY TO IT. THIS LEGEND WILL BE
REMOVED UPON THE WRITTEN REQUEST OF THE HOLDER AFTER THE RE SALE
RESTRICTION TERMINATION DATE. IN CONNECTION WITH ANY TRANSFER, THE
HOLDER WILL DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER
INFORMA TION AS THE COMPANY MAY REASONABLY 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 CERTIFI CATE NOR ANY OF
THE SECURITIES ISSUABLE UPON EX ERCISE THEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAW. THE HOLDER OF THIS SECU RITY 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 COM PANY WAS THE OWNER OF THIS SECURITY (OR ANY PRE DECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COM PANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECU RITIES 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 REA SONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALI FIED 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 AC COUNT OR FOR THE ACCOUNT OF SUCH AN INSTITU TIONAL
ACCREDITED INVESTOR FOR INVESTMENT PUR POSES 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 RE QUIREMENTS 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 REASONABLY 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 CERTIFI XXXXX AND OTHER
INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
8.3. Termination of Securities Law Restrictions.
Notwithstanding the foregoing provisions of this 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 8.3 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 Com pany 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 satisfac tion 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 (as such
phrase is interpreted under Rule 144 of the Securities Act) so as to afford
the holders of the Warrants and the Warrant Stock the benefits of Rule 144
of the Securities Act in connection with resales, and upon the written
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.
10. LOSS OR MUTILATION
Upon receipt by the Company from any Holder of evidence
reason ably 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 mutila tion, 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" under Rule 501(a) of 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 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;
and
(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 Business
Days after the same shall have been deposited in the United States mail, or
one 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 PERFOR XXXXX, THIS
WARRANT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN AC CORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICA BLE 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 an exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ shares of common stock,
par value $0.01 per share, of CoreComm Limited (the "Common Stock") 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, with out 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, par value $0.01 per share, of
CoreComm Limited set forth below:
Name and Address of Assignee Number of Shares of 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, with out alteration or enlargement or any change
whatsoever.
