EXHIBIT 10.13
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WARRANT AGREEMENT
Dated as of April 15, 1996
by and among
HYPERION TELECOMMUNICATIONS, INC.
and
Bank of Montreal Trust Company
______________________________________________
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WARRANT AGREEMENT
TABLE OF CONTENTS*
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SECTION 1. Certain Definitions........................................................................................... 1
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SECTION 2. Appointment of Warrant Agent.................................................................................. 3
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SECTION 3. Issuance of Warrants; Warrant Certificates.................................................................... 3
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SECTION 4. Execution of Warrant Certificates............................................................................. 3
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SECTION 5. Separation of Warrants........................................................................................ 3
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SECTION 6. Registration and Countersignature............................................................................. 4
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SECTION 7. Registration of Transfers and Exchanges....................................................................... 4
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(a) Transfer and Exchange of Definitive Warrants................................................................ 4
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(b) Restrictions on Exchange or Transfer of a Definitive Warrant for a Beneficial
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Interest in a Global Warrant................................................................................ 5
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(c) Transfer and Exchange of Global Warrants.................................................................... 6
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(d) Exchange of a Beneficial Interest in a Global Warrant for a Definitive Warrant.............................. 6
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(e) Restrictions on Transfer and Exchange of Global Warrants.................................................... 7
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(f) Countersigning of Definitive Warrants in Absence of Depositary.............................................. 7
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(g) Legends..................................................................................................... 7
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(h) Cancellation of Global Warrant.............................................................................. 9
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(i) Obligations with respect to Transfers and Exchanges of Warrants............................................. 9
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SECTION 8. Terms of Warrants; Exercise of Warrants....................................................................... 9
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SECTION 9. Payment of Taxes.............................................................................................. 11
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SECTION 10. Mutilated or Missing Warrant Certificates..................................................................... 11
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SECTION 11. Reservation of Warrant Shares ................................................................................ 11
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SECTION 12. Obtaining Stock Exchange Listings............................................................................. 12
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SECTION 13. Adjustment of Exercise Price and Number of Warrant Shares Issuable............................................ 12
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(a) Stock Splits, Combinations, etc............................................................................. 12
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(b) Reclassification, Combinations, Mergers, etc................................................................ 12
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(c) Issuance of Options or Convertible Securities............................................................... 13
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* This Table of Contents does not constitute a part of this Agreement or have
any bearing upon the interpretation of any of its terms or provisions.
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(d) Dividends and Distributions................................................................................. 14
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(e) Current Market Price........................................................................................ 14
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(f) Certain Distributions....................................................................................... 15
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(g) Consideration Received...................................................................................... 15
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(h) Deferral of Certain Adjustments ............................................................................ 15
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(i) Changes in Options and Convertible Securities............................................................... 15
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(j) Expiration of Options and Convertible Securities............................................................ 16
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(k) Other Adjustments........................................................................................... 16
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(l) Adjustment in Number of Shares.............................................................................. 16
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SECTION 14. Statement on Warrants......................................................................................... 17
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SECTION 15. Fractional Interest........................................................................................... 17
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SECTION 16. Notices to Warrant Holders.................................................................................... 17
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SECTION 17. Merger, Consolidation or Change of Name of Warrant Agent...................................................... 19
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SECTION 18. Warrant Agent................................................................................................. 19
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SECTION 19. Resignation and Removal of Warrant Agent; Appointment of Successor............................................ 21
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SECTION 20. Registration.................................................................................................. 21
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SECTION 21. Reports....................................................................................................... 21
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SECTION 22. Rule 144A..................................................................................................... 22
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SECTION 23. Notices to Company and Warrant Agent.......................................................................... 22
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SECTION 24. Supplements and Amendments.................................................................................... 23
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SECTION 25. Successors.................................................................................................... 23
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SECTION 26. Termination................................................................................................... 23
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SECTION 27. Governing Law................................................................................................. 23
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SECTION 28. Benefits of This Agreement.................................................................................... 23
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SECTION 29. Counterparts.................................................................................................. 24
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Signature.................................................................................................................. 24
Seal....................................................................................................................... 25
EXHIBIT A.................................................................................................................. 1
ii
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EXHIBIT B.................................................................................................................. 1
WARRANT AGREEMENT dated as of April 15, 1996 (the "Agreement")
between Hyperion Telecommunications, Inc., a Delaware corporation (the
"Company"), and Bank of Montreal Trust Company, as warrant agent (the "Warrant
Agent").
WHEREAS, the Company proposes to issue Common Stock Purchase
Warrants, as hereinafter described (the "Warrants"), to purchase up to an
aggregate of 613,427 shares of Common Stock (as defined below), in connection
with the offering of an aggregate of $329,000,000 principal amount at maturity
of the Company's 13% Senior Discount Notes due 2003 (the "Senior Notes") and
329,000 Warrants, each Warrant entitling the holder thereof to purchase 1.8645
shares of Common Stock. The Senior Notes and Warrants will be sold in Units
(the "Units"), each Unit consisting of $1,000 principal amount at maturity of
Senior Notes and one Warrant.
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with
the issuance of Warrant Certificates (as defined below) and other matters as
provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company, the Warrant Agent and the Holders (as
defined below), the parties hereto agree as follows:
SECTION 1. Certain Definitions. As used in this Agreement, the
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following terms shall have the following respective meanings:
"Affiliate" of any person means any person directly or indirectly
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controlling or controlled by or under direct or indirect common control with
such person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as used with respect to any person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; provided that beneficial ownership of 10% or more of the voting
securities of a person shall be deemed to be control.
"Commission" means the Securities and Exchange Commission.
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"Common Equity Securities" means Common Stock and securities
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convertible into, or exercisable or exchangeable for, Common Stock or rights
or options to acquire Common Stock or such other securities, excluding the
Warrants.
"Common Stock" means the common stock, par value $.01 per share, of
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the Company, and any other capital stock of the Company into which such common
stock may be converted or reclassified or that may be issued in respect of, in
exchange for, or in substitution for, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
"Company" means Hyperion Telecommunications, Inc., a Delaware
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corporation, and its successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
"Exercisability Date" means any time on or after the earlier to
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occur of (i) May 1, 1997 and (ii) in the event a Change of Control (as defined
in the Indenture) occurs, the date the Company mails notice thereof to holders
of Senior Notes and to the Holders.
"Exercise Price" means the purchase price per share of Common Stock
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to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be $0.01 per share, subject to adjustment
from time to time pursuant to Section 13 hereof.
"Expiration Date" means April 1, 2001.
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"Holder" means a person who owns Registrable Securities (as defined
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in Section 7).
"Indenture" means the indenture, dated the date hereof, between the
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Company and Bank of Montreal Trust Company, as trustee.
"Initial Purchasers" means Bear, Stearns & Co. Inc., Chase
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Securities Inc. and NationsBanc Capital Markets, Inc.
"person" means any individual, corporation, partnership, joint
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venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Registration Rights Agreement" means the registration rights
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agreement, dated as of April 15, 1996, by and among the Company and the
Initial Purchasers relating to the Senior Notes.
"Securities Act" means the Securities Act of 1933, as amended.
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"Senior Notes" means the 13% Series A Senior Discount Notes due 2003
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of the Company, being sold and issued pursuant to the Purchase Agreement and
the Indenture, or any notes exchanged therefor as contemplated by the
Indenture and the Registration Rights Agreement.
"Separation Date" means the earlier of (i) 90 days after the
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issuance of the Units, (ii) such date as the Initial Purchasers may, in their
discretion, deem appropriate for the Senior Notes and the Warrants that
comprise each Unit to be transferred or exchanged separately, (iii) in the
event a Change of Control (as defined in the Indenture) occurs, the date the
Company mails notice thereof to holders of Senior Notes and (iv) the date on
which the Exchange Offer (as defined in the Registration Rights Agreement) is
consummated.
"Trustee" means the trustee under the Indenture.
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"Warrant Agent" means Bank of Montreal Trust Company or the
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successor or successors of such Warrant Agent appointed in accordance with the
terms hereof.
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"Warrant Registration Rights Agreement" means the registration
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rights agreement, dated as of April 15, 1996, by and among the Company and the
Initial Purchasers relating to the Warrants and the Warrant Shares.
"Warrant Shares" means the shares of Common Stock issued or issuable
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upon the exercise of the Warrants.
SECTION 2. Appointment of Warrant Agent. The Company hereby
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appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant
Agent hereby accepts such appointment.
SECTION 3. Issuance of Warrants; Warrant Certificates. The
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Warrants will be issued in global form (the "Global Warrants"), substantially
in the form of Exhibit A (including footnotes 1 and 2 thereto) and in
definitive form (the "Definitive Warrants"), substantially in the form of
Exhibit A. Each Global Warrant shall represent such of the outstanding
Warrants as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Warrants from time to time
endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the amount of outstanding Warrants represented thereby
shall be made by the Warrant Agent and the depositary with respect to the
Global Warrants (the "Depositary") in accordance with instructions given by
the Holder thereof. The Depository Trust Company shall act as the Depositary
until a successor shall be appointed by the Company and the Warrant Agent.
Upon request, a Holder may receive from the Depositary and the Warrant Agent
separate Definitive Warrants as set forth in Section 7 below. Any
certificates (the "Warrant Certificates") evidencing the Global Warrants or
the Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto.
SECTION 4. Execution of Warrant Certificates. Warrant Certificates
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shall be signed on behalf of the Company by its Chairman of the Board, its
President or a Vice President and by its Secretary or Assistant Secretary
under its corporate seal. Each such signature upon the Warrant Certificates
may be in the form of a facsimile signature of the present or any future
Chairman of the Board, President or Secretary and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that purpose the
Company may adopt and use the facsimile signature of any person who shall have
been Chairman of the Board, President or Secretary notwithstanding the fact
that at the time the Warrant Certificates shall be countersigned and delivered
or disposed of such person shall have ceased to hold such office. The seal of
the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not
ceased to be such officer of the Company; and any Warrant Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of the
Company to sign such Warrant Certificate, although at the date of the
execution of this Warrant Agreement any such person was not such officer.
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Warrant Certificates shall be dated the date of countersignature.
SECTION 5. Separation of Warrants. The Senior Notes and Warrants
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shall not be separately transferable prior to the Separation Date.
SECTION 6. Registration and Countersignature. The Warrant Agent, on
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behalf of the Company, shall number and register the Warrant Certificates in a
register as they are issued by the Company.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board,
the President or the Treasurer of the Company, initially countersign, issue
and deliver Warrants entitling the Holders thereof to purchase not more than
the number of Warrant Shares referred to above in the first recital hereof and
shall countersign and deliver Warrants as otherwise provided in this
Agreement.
The Company and the Warrant Agent may deem and treat the Holder(s)
of the Warrant Certificates as the absolute owner(s) thereof (notwithstanding
any notation of ownership or other writing thereon made by anyone), for all
purposes, and neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary. Prior to a Separation Date, the registered holder
of the Unit shall be deemed the registered Holder of such Warrants for all
purposes hereunder.
SECTION 7. Registration of Transfers and Exchanges.
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(a) Transfer and Exchange of Definitive Warrants. When Definitive
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Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as
requested if its requirements for such transactions are met; provided that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Warrant Agent, duly executed
by the Holder thereof or by his attorney, duly authorized in
writing; and
(y) in the case of Registrable Securities (as defined below), such
request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Registrable Security is being delivered to the Warrant
Agent by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit B hereto);
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(B) if such Registrable Security is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act or (2) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities
Act (and based on an opinion of counsel if the Company so
requests) or (3) pursuant to an effective registration
statement under the Securities Act, a certification to that
effect (in substantially the form of Exhibit B hereto);
(C) if such Registrable Security is being transferred to an
institutional "accredited investor," within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act
pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based on
an opinion of counsel if the Company so requests), a
certification to that effect (in substantially the form of
Exhibit B hereto) and a certification from the applicable
transferee; or
(D) if such Registrable Security is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect (in
substantially the form of Exhibit B hereto).
The term "Registrable Securities" means the Warrants, Warrant Shares
and any other securities issued or issuable with respect to the Warrants
or the Warrant Shares by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise until such date as such
security (i) is effectively registered under the Securities Act and
disposed of in accordance with a registration statement or (ii) is
distributed to the public pursuant to Rule 144 under the Securities Act.
(b) Restrictions on Exchange or Transfer of a Definitive Warrant
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for a Beneficial Interest in a Global Warrant. A Definitive Warrant may not
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be exchanged for a beneficial interest in a Global Warrant except upon
satisfaction of the requirements set forth below. Upon receipt by the Warrant
Agent of a Definitive Warrant, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Warrant Agent, together
with:
(A) if such Definitive Warrant is a Registrable Security,
certification from the Holder thereof (in substantially the
form of Exhibit B hereto) to the effect that such Definitive
Warrant is being transferred by such Holder either (i) to a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act who wishes to take delivery thereof in the form
of a beneficial interest in a Global Warrant or (ii) to an
"accredited investor," within the meaning of Rule 501(a)(1),
(2), (3) or (7) in accordance with Rule 144A under the
Securities Act (and based on an opinion of counsel if the
Company so requests) who wishes to take delivery thereof in
the form of a beneficial interest in a Global Warrant; and
(B) whether or not such Definitive Warrant is a Registrable
Security, written instructions directing the Warrant Agent to
make, or to direct the Depositary to
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make, an endorsement on the Global Warrant to reflect an
increase in the number of Warrants and Warrant Shares
represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or
direct the Depositary to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Warrant Agent, the
number of Warrants and Warrant Shares represented by the Global Warrant to be
increased accordingly. If no Global Warrants are then outstanding, the
Company shall issue and the Warrant Agent shall countersign a new Global
Warrant representing the appropriate number of Warrants and Warrant Shares.
(c) Transfer and Exchange of Global Warrants. The transfer and
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exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Warrant Agreement and the
procedures of the Depositary therefor.
(d) Exchange of a Beneficial Interest in a Global Warrant for a
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Definitive Warrant.
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(i) Any person having a beneficial interest in a Global Warrant may
upon request exchange such beneficial interest for a Definitive
Warrant. Upon receipt by the Warrant Agent of written
instructions or such other form of instructions as is customary
for the Depositary from the Depositary or its nominee on behalf of
any person having a beneficial interest in a Global Warrant and,
in the case of a Registrable Security, the following additional
information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being delivered to the person
designated by the Depositary as being the beneficial owner, a
certification to that effect (in substantially the form of
Exhibit B hereto);
(B) if such beneficial interest is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act or (2) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities
Act (and based on an opinion of counsel if the Company so
requests) or (3) pursuant to an effective registration
statement under the Securities Act, a certification to that
effect (in substantially the form of Exhibit B hereto);
(C) if such beneficial interest is being transferred to any
institutional "accredited investor," within the meaning of
Rule 501(a)(1), (2), (3) and (7) under the Securities Act
pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based on
an opinion of counsel if the Company so requests), a
certification to that effect (in substantially the form of
Exhibit B hereto) and a certification from the applicable
transferee;
(D) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect (in
substantially the form of Exhibit B hereto).
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then the Warrant Agent shall cause, in accordance with the
standing instructions and procedures existing between the
Depositary and Warrant Agent, the number of Warrants and Warrant
Shares represented by the Global Warrant to be reduced and,
following such reduction, the Company shall execute and the
Warrant Agent shall countersign and deliver to the transferee, as
the case may be, a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial interest
in a Global Warrant pursuant to this Section 7(d) shall be
registered in such names as the Depositary, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Warrant Agent. The Warrant Agent
shall deliver such Definitive Warrants to the persons in whose
names such Warrants are so registered.
(e) Restrictions on Transfer and Exchange of Global Warrants.
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Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 7), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrants in Absence of Depositary.
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If at any time:
(i) the Depositary for the Global Warrants notifies the Company that
the Depositary is unwilling or unable to continue as Depositary
for the Global Warrants and a successor Depositary for the Global
Warrants is not appointed by the Company within 90 days after
delivery of such notice; or
(ii) The Company, in its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive
Warrants under this Warrant Agreement,
then the Company shall execute, and the Warrant Agent, upon written
instructions signed by two officers of the Company, shall countersign and
deliver Definitive Warrants, in an aggregate number equal to the number of
Warrants represented by Global Warrants, in exchange for such Global Warrants.
(g) Legends.
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(i) Except for any Registrable Security sold or transferred (including
any Registrable Security represented by a Global Warrant) as
discussed in clause (ii) below, each Warrant Certificate
evidencing the Global Warrants and the Definitive Warrants (and
all Warrants issued in exchange therefor or substitution thereof)
and each certificate representing the Warrant Shares shall bear a
legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"),
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AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR"). THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (Y) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY, (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (Z) IT WILL NOTIFY ANY PURCHASER OF THE
SECURITY EVIDENCED HEREBY, PRIOR TO CLOSING OF ANY SALE, OF
THE RESALE RESTRICTIONS SET FORTH IN (Y) ABOVE."
(ii) Upon any sale or transfer of a Registrable Security (including any
Registrable Security represented by a Global Warrant) pursuant to
an effective registration statement under the Securities Act,
pursuant to Rule 144 under the Securities Act or pursuant to an
opinion of counsel reasonably satisfactory to the Company that no
legend is required:
(A) in the case of any Registrable Security that is a Definitive
Warrant, the Warrant Agent shall permit the Holder thereof to
exchange such Registrable Security for a Definitive Warrant
that does not bear the legend set forth in clause (i) above
and rescind any restriction on the transfer of such
Registrable Security; and
(B) in the case of any Registrable Security represented by a
Global Warrant, such Registrable Security shall not be
required to bear the legend set forth in clause (i) above but
shall continue to be subject to the provisions of Section 7(c)
hereof; provided that with respect to any request for an
exchange of a
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Registrable Security that is represented by a Global Warrant
for a Definitive Warrant that does not bear the legend set
forth in clause (i) above, which request is made in reliance
upon Rule 144 (and based on an opinion of counsel if the
Company so requests), the Holder thereof shall certify in
writing to the Warrant Agent that such request is being made
pursuant to Rule 144 (such certification to be substantially
in the form of Exhibit B hereto).
(h) Cancellation of Global Warrant. At such time as all beneficial
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interests in Global Warrants have either been exchanged for Definitive
Warrants, redeemed, repurchased or cancelled, all Global Warrants shall be
returned to or retained and cancelled by the Warrant Agent.
(i) Obligations with respect to Transfers and Exchanges of
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Warrants.
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(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Warrant Agent is hereby authorized to
countersign, in accordance with the provisions of Section 6 and
this Section 7, Definitive Warrants and Global Warrants as
required pursuant to the provisions of this Section 7.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration of transfer or exchange of Definitive Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement, as the
Definitive Warrants or Global Warrants surrendered upon such
registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the
person in whose name any Warrant is registered as the absolute
owner of such Warrant and neither the Warrant Agent, nor the
Company shall be affected by notice to the contrary.
(iv) No service charge shall be made to a Holder for any registration,
transfer or exchange.
SECTION 8. Terms of Warrants; Exercise of Warrants. Subject to
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the terms of this Agreement, each Warrant Holder shall have the right, which
may be exercised commencing at the opening of business on the Exercisability
Date and until 5:00 p.m., New York City time on the Expiration Date to
receive from the Company the number of fully paid and nonassessable Warrant
Shares registered under the Securities Act which the Holder may at the time
be entitled to receive on exercise of such Warrants and payment of the
Exercise Price then in effect for such Warrant Shares; provided that no
Warrant Holder shall be entitled to exercise such Holder's Warrants at any
time, unless, at the time of exercise, (i) a registration statement under the
Securities Act relating to the Warrant Shares has been filed with, and
declared effective by, the Commission, and no stop order suspending the
effectiveness of such registration statement has been issued by the
Commission or (ii) the issuance of the Warrant Shares is permitted pursuant
to an exemption from the registration requirements of the Securities Act.
Each Warrant not exercised prior to 5:00 p.m., New York City time, on the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants.
9
The Company shall give notice not less than 90, and not more than
120, days prior to the Expiration Date to the Holders of all then outstanding
Warrants to the effect that the Warrants will terminate and become void as of
the 5:00 p.m., New York City time, on the Expiration Date. If the Company
fails to give such notice, the Warrants will not expire until 90 days after
the Company gives such notice, provided in no event will Holders be entitled
to any damages or other remedy for the Company's failure to give such notice
other than any such extension.
A Warrant may be exercised upon surrender to the Company at the
principal office of the Warrant Agent of the certificate or certificates
evidencing the Warrant to be exercised with the form of election to purchase
on the reverse thereof duly filled in and signed, which signature shall be
guaranteed by a bank or trust company having an office or correspondent in the
United States or a broker or dealer which is a member of a registered
securities exchange or the National Association of Securities Dealers, Inc.,
and upon payment to the Warrant Agent for the account of the Company of the
Exercise Price as adjusted as herein provided, for each of the Warrant Shares
in respect of which such Warrant is then exercised. Payment of the aggregate
Exercise Price shall be made in cash or by certified or official bank check,
payable to the order of the Company. In the alternative, each Holder may
exercise its right to receive Warrant Shares on a net basis, such that without
the exchange of any funds, the Holder receives that number of Warrant Shares
otherwise issuable upon exercise of its Warrants less that number of Warrant
Shares having a fair market value equal to the aggregate Exercise Price that
would otherwise have been paid by the Holder of the Warrant Shares. For
purposes of the foregoing sentence, "fair market value" of the Warrant Shares
shall be the current market price of the Warrant Shares on the date
immediately preceding the date of payment of the Exercise Price as determined
by the procedures set forth in Section 13(f). The exercise of Warrants by
Holders of beneficial interest in Global Warrants shall be effected in
accordance with this Agreement and the procedures of the Depositary therefor.
Subject to the provisions of Section 9 hereof, upon surrender of
Warrants and payment of the Exercise Price as provided above, the Warrant
Agent shall thereupon promptly notify the Company, and the Company shall
promptly transfer to the Holder of such Warrant Certificate a certificate or
certificates for the appropriate number of Warrant Shares or other securities
or property (including any money) to which the Holder is entitled, registered
or otherwise placed in, or payable to the order of, such name or names as may
be directed in writing by the Holder, and shall deliver such certificate or
certificates representing the Warrant Shares and any other securities or
property (including any money) to the person or persons entitled to receive
the same, together with an amount in cash in lieu of any fraction of a share
as provided in Section 15. Any such certificate or certificates representing
the Warrant Shares shall be deemed to have been issued and any person so
designated to be named therein shall be deemed to have become a Holder of
record of such Warrant Shares as of the date of the surrender of such Warrants
and payment of the Exercise Price.
The Warrants shall be exercisable commencing on the Exercisability
Date, at the election of the Holders thereof, either in full or from time to
time in part and, in the event that a certificate evidencing Warrants is
exercised in respect of fewer than all of the Warrant Shares issuable on such
exercise at any time prior to the date of expiration of the Warrants, a new
certificate evidencing the remaining Warrant or Warrants will be issued, and
the Warrant Agent is hereby irrevocably authorized to countersign and to
deliver the required new Warrant Certificate or Certificates pursuant to the
provisions of this Section and of Section 4 hereof, and the Company, whenever
required by the
10
Warrant Agent, will supply the Warrant Agent with Warrant Certificates duly
executed on behalf of the Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay to the Company all monies received
by the Warrant Agent for the purchase of the Warrant Shares through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder by or from the Company available for
inspection by the Holders during normal business hours at its office. The
Company shall supply the Warrant Agent from time to time with such numbers of
copies of this Agreement as the Warrant Agent may request.
SECTION 9. Payment of Taxes. The Company will pay all documentary
----------------
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants or to any Separation; provided that the Company shall not
be required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issue of any Warrant Certificates or any certificates
for Warrant Shares in a name other than that of the Holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company shall
not be required to issue or deliver such Warrant Certificates unless or until
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
SECTION 10. Mutilated or Missing Warrant Certificates. In case any
-----------------------------------------
of the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing
an equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
reasonably satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may
prescribe.
SECTION 11. Reservation of Warrant Shares. The Company will at all
-----------------------------
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon
the exercise of all outstanding Warrants.
The transfer agent for the Common Stock (the "Transfer Agent") and
every subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of the rights of purchase aforesaid will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep
a copy of this Agreement on file with the Transfer Agent and with every
subsequent transfer agent for any
11
shares of the Company's capital stock issuable upon the exercise of the rights
of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer
Agent the stock certificates required to honor outstanding Warrants upon
exercise thereof in accordance with the terms of this Agreement. The Company
will supply such Transfer Agent with duly executed certificates for such
purposes and will provide or otherwise make available any cash which may be
payable as provided in Section 15. The Company will furnish such Transfer
Agent a copy of all notices of adjustments and certificates related thereto,
transmitted to each Holder of the Warrants pursuant to Section 16 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 13 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants in accordance with the terms of this Agreement
(including the terms of the Exercise Price) will, upon issue, be duly and
validly issued, fully paid, nonassessable, free of preemptive rights and free
from all taxes, liens, charges and security interests with respect to the
issue thereof.
SECTION 12. Obtaining Stock Exchange Listings. The Company will
---------------------------------
from time to time take all action which may be necessary so that the Warrant
Shares, immediately upon their issuance upon the exercise of Warrants, will be
listed on the principal securities exchanges and markets (including, without
limitation, the Nasdaq National Market) within the United States of America,
if any, on which other shares of Common Stock are then listed. Upon the
listing of such Warrant Shares, the Company shall notify the Warrant Agent in
writing. The Company will obtain and keep all required permits and records in
connection with such listing.
SECTION 13. Adjustment of Exercise Price and Number of Warrant
--------------------------------------------------
Shares Issuable. The number and kind of shares purchasable upon the exercise
---------------
of Warrants and the Exercise Price shall be subject to adjustment from time to
time as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
-------------------------------
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital
stock of any other class), (B) subdivide its outstanding shares of Common
Stock, (C) combine its outstanding shares of Common Stock into a smaller
number of shares or (D) issue by reclassification of its shares of Common
Stock any shares of capital stock of the Company, the Exercise Price in effect
immediately prior to such action shall be adjusted so that the Holder of any
Warrant thereafter exercised shall be entitled to receive the number of shares
of capital stock of the Company which such Holder would have owned immediately
following such action had such Warrant been exercised immediately prior
thereto. An adjustment made pursuant to this paragraph shall become effective
immediately after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification. If, as a result of an adjustment made
pursuant to this paragraph, the Holder of any Warrant thereafter exercised
shall become entitled to receive shares of two or more classes of capital
stock of the Company, the Board of Directors of the Company (whose
determination shall be conclusive) shall
12
determine the allocation of the adjusted Exercise Price between or among
shares of such classes of capital stock.
(b) Reclassification, Combinations, Mergers, etc. In case of any
--------------------------------------------
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in paragraph (a) above and
other than a change in par value, or from par value to no par value, or from
no par value to par value or as a result of a subdivision or combination), or
in case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants) or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as
an entirety, then, as a condition of such reclassification, change,
consolidation, merger, sale or conveyance, the Company or such a successor or
purchasing corporation, as the case may be, shall forthwith make lawful and
adequate provision whereby the Holder of such Warrant then outstanding shall
have the right thereafter to receive on exercise of such Warrant the kind and
amount of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or conveyance by a
Holder of the number of shares of Common Stock issuable upon exercise of such
Warrant immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance and enter into a supplemental warrant agreement so
providing. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 13. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental warrant agreement is an affiliate
of the formed, surviving or transferee corporation, that issuer shall join in
the supplemental warrant agreement. The above provisions of this paragraph
(b) shall similarly apply to successive reclassifications and changes of
shares of Common Stock and to successive consolidations, mergers, sales or
conveyances.
(c) Issuance of Options or Convertible Securities. In the event the
---------------------------------------------
Company shall, at any time or from time to time after the date hereof, issue,
sell, distribute or otherwise grant in any manner (including by assumption) to
all holders of the Common Stock any rights to subscribe for or to purchase, or
any warrants or options for the purchase of, Common Stock or any stock or
securities convertible into or exchangeable for Common Stock (any such rights,
warrants or options being herein called "Options" and any such convertible or
exchangeable stock or securities being herein called "Convertible Securities")
or any Convertible Securities (other than upon exercise of any Option),
whether or not such Options or the rights to convert or exchange such
Convertible Securities are immediately exercisable, and the price per share at
which Common Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined by dividing
(i) the aggregate amount, if any, received or receivable by the Company as
consideration for the issuance, sale, distribution or granting of such Options
or any such Convertible Security, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise of
all such Options or upon conversion or exchange of all such Convertible
Securities, plus, in the case of Options to acquire Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable upon
the conversion or exchange of all such Convertible Securities, by (ii) the
total maximum number of shares of Common Stock issuable upon the exercise of
all such Options or upon the conversion or exchange of all such Convertible
Securities or upon the conversion or exchange of all Convertible Securities
issuable upon the exercise of all such Options) shall be less than the current
market price per share of Common Stock on the record date for the issuance,
sale,
13
distribution or granting of such Options or Convertible Securities (any such
event being herein called a "Distribution"), then, effective upon such
Distribution, (I) the Exercise Price shall be reduced to the price (calculated
to the nearest 1/1,000 of one cent) determined by multiplying the Exercise
Price in effect immediately prior to such Distribution by a fraction, the
numerator of such shall be the sum of (1) the number of shares of Common Stock
outstanding (exclusive of any treasury shares) immediately prior to such
Distribution multiplied by the current market price per share of Common Stock
on the date of such Distribution plus (2) the consideration, if any, received
by the Company upon such Distribution, and the denominator of which shall be
the product of (A) the total number of shares of Common Stock outstanding
(exclusive of any treasury shares) immediately after such Distribution
multiplied by (B) the current market price per share of Common Stock on the
record date for such Distribution and (II) the number of shares of Common
Stock purchasable upon the exercise of each Warrant shall be increased to a
number determined by multiplying the number of shares of Common Stock so
purchasable immediately prior to the record date for such Distribution by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment required by clause (I) of this sentence
and the denominator of which shall be the Exercise Price in effect immediately
after such adjustment (for the purposes of this clause (ii) without giving
effect to the provisions of Section 13(h)). For purposes of the foregoing,
the total maximum number of shares of Common Stock issuable upon exercise of
all such Options or upon conversion or exchange of all such Convertible
Securities or upon the conversion or exchange of the total maximum amount of
the Convertible Securities issuable upon the exercise of all such Options
shall be deemed to have been issued as of the date of such Distribution and
thereafter shall be deemed to be outstanding and the Company shall be deemed
to have received as consideration therefor such price per share, determined as
provided above. Except as provided in paragraphs (j) and (k) below, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of the Convertible
Securities or upon the conversion or exchange of the Convertible Securities
issuable upon the exercise of such Options.
(d) Dividends and Distributions. In the event the Company shall, at
---------------------------
any time or from time to time after the date thereof, distribute to all the
holders of Common Stock any dividend or other distribution of cash, evidences
of its indebtedness, other securities or other properties or assets (in each
case other than (i) dividends payable in Common Stock, Options or Convertible
Securities and (ii) any cash dividend that, when added to all other cash
dividends paid in the one year prior to the declaration date of such dividend
(excluding any such other dividend included in a previous adjustment of the
Exercise Price pursuant to this paragraph (d)), does not exceed 5% of the
current market price per share of Common Stock on such declaration date), or
any options, warrants or other rights to subscribe for or purchase any of the
foregoing, then (A) the Exercise Price shall be decreased to a price
determined by multiplying the Exercise Price then in effect by a fraction, the
numerator of which shall be the current market price per share of Common Stock
on the record date for such distribution less the sum of (X) the cash portion,
if any, of such distribution per share of Common Stock outstanding (exclusive
of any treasury shares) on the record date for such distribution plus (Y) the
then fair market value (as determined in good faith by the Board of Directors
of the Company) per share of Common Stock outstanding (exclusive of any
treasury shares) on the record date for such distribution of that portion, if
any, of such distribution consisting of evidences of indebtedness, other
securities, properties, assets, options, warrants or subscription or purchase
rights, and the denominator of which shall be such current market price per
share of Common Stock and (B) the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock so purchasable immediately
prior to the record date for such distribution by a fraction, the numerator of
which shall be the Exercise Price in effect immediately prior to the
14
adjustment required by clause (A) of this sentence and the denominator of
which shall be the Exercise Price in effect immediately after such adjustment
(for the purposes of this clause (B) without giving effect to the provisions
of Section 13(h)). The adjustments required by this paragraph (d) shall be
made whenever any such distribution occurs retroactive to the record date for
the determination of stockholders entitled to receive such distribution.
(e) Current Market Price. For the purpose of any computation of
--------------------
current market price under this Section 13 and Section 15, the current market
price per share of Common Stock at any date shall be (x) for purposes of
Section 15, the closing price on the business day immediately prior to the
exercise of the applicable Warrant pursuant to Section 8 and (y) in all other
cases, the average of the daily closing prices for the shorter of (i) the 20
consecutive trading days ending on the last full trading day on the exchange
or market specified in the second succeeding sentence prior to the Time of
Determination (as defined below) and (ii) the period commencing on the date
next succeeding the first public announcement of the issuance, sale,
distribution or granting in question through such last full trading day prior
to the Time of Determination. The term "Time of Determination" as used herein
shall be the time and date of the earlier to occur of (A) the date as of which
the current market price is to be computed and (B) the last full trading day
on such exchange or market before the commencement of "ex-dividend" trading in
the Common Stock relating to the event giving rise to the adjustment required
by paragraph (a), (b), (c) or (d). The closing price for any day shall be the
last reported sale price regular way or, in case no such reported sale takes
place on such day, the average of the closing bid and asked prices regular way
for such day, in each case (1) on the principal national securities exchange
on which the shares of Common Stock are listed or to which such shares are
admitted to trading or (2) if the Common Stock is not listed or admitted to
trading on a national securities exchange, in the over-the-counter market as
reported by Nasdaq National Market or any comparable system or (3) if the
Common Stock is not listed on Nasdaq National Market or a comparable system,
as furnished by two members of the NASD selected from time to time in good
faith by the Board of Directors of the Company for that purpose. In the
absence of all of the foregoing, or if for any other reason the current market
price per share cannot be determined pursuant to the foregoing provisions of
this paragraph (e), the current market price per share shall be the fair
market value thereof as determined in good faith by the Board of Directors of
the Company.
(f) Certain Distributions. If the Company shall pay a dividend or
---------------------
make any other distribution payable in Options or Convertible Securities,
then, for purposes of paragraph (c) above, such Options or Convertible
Securities shall be deemed to have been issued or sold without consideration.
(g) Consideration Received. If any shares of Common Stock, Options
----------------------
or Convertible Securities shall be issued, sold or distributed for a
consideration other than cash, the amount of the consideration other than cash
received by the Company in respect thereof shall be deemed to be the then fair
market value of such consideration (as determined in good faith by the Board
of Directors of the Company). If any Options shall be issued in connection
with the issuance and sale of other securities of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed
to have been issued without consideration; provided, that if such Options have
an exercise price equal to or greater than the current market price of the
Common Stock on the date of issuance of such Options, then such Options shall
be deemed to have been issued for consideration equal to such exercise price.
15
(h) Deferral of Certain Adjustments. No adjustment to the Exercise
-------------------------------
Price (including the related adjustment to the number of shares of Common
Stock purchasable upon the exercise of each Warrant) shall be required
hereunder unless such adjustment, together with other adjustments carried
forward as provided below, would result in an increase or decrease of at least
one percent of the Exercise Price; provided that any adjustments which by
reason of this paragraph (i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. No adjustment
need be made for a change in the par value of the Common Stock. All
calculations under this Section shall be made to the nearest 1/1,000 of one
cent or to the nearest 1/1000 of a share, as the case may be.
(i) Changes in Options and Convertible Securities. If the exercise
---------------------------------------------
price provided for in any Options referred to in paragraph (c) above, the
additional consideration, if any, payable upon the conversion or exchange of
any Convertible Securities referred to in paragraph (c) above, or the rate at
which any Convertible Securities referred to in paragraph (c) above are
convertible into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment pursuant to this
Section 13), the Exercise Price then in effect and the number of shares of
Common Stock purchasable upon the exercise of each Warrant shall forthwith be
readjusted (effective only with respect to any exercise of any Warrant after
such readjustment) to the Exercise Price and number of shares of Common Stock
so purchasable that would then be in effect had the adjustment made upon the
issuance, sale, distribution or granting of such Options or Convertible
Securities been made based upon such changed purchase price, additional
consideration or conversion rate, as the case may be, but only with respect to
such Options and Convertible Securities as then remain outstanding.
(j) Expiration of Options and Convertible Securities. If, at any
------------------------------------------------
time after any adjustment to the number of shares of Common Stock purchasable
upon the exercise of each Warrant shall have been made pursuant to paragraph
(c) or (i) above or this paragraph (j), any Options or Convertible Securities
shall have expired unexercised, the number of such shares so purchasable
shall, upon such expiration, be readjusted and shall thereafter be such as
they would have been had they been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (i) the only shares of
Common Stock deemed to have been issued in connection with such Options or
Convertible Securities were the shares of Common Stock, if any, actually
issued or sold upon the exercise of such Options or Convertible Securities and
(ii) such shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale, distribution or granting of all such Options or Convertible
Securities, whether or not exercised; provided that no such readjustment shall
have the effect of decreasing the number of such shares so purchasable by an
amount (calculated by adjusting such decrease to account for all other
adjustments made pursuant to this Section 13 following the date of the
original adjustment referred to above) in excess of the amount of the
adjustment initially made in respect of the issuance, sale, distribution or
granting of such Options or Convertible Securities.
(k) Other Adjustments. In the event that at any time, as a result
-----------------
of an adjustment made pursuant to this Section 13, the Holders shall become
entitled to receive any securities of the Company other than shares of Common
Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Exercise Price applicable to such exercise
shall be
16
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares of
Common Stock contained in this Section 13.
(l) Adjustment in Number of Shares. Upon each adjustment of the
------------------------------
Exercise Price pursuant to this Section 13 or upon the occurrence of any event
or action which would require an adjustment of the Exercise Price pursuant to
this Section 13 but for Section 13(h), each Warrant outstanding prior to the
making of the adjustment in the Exercise Price shall thereafter evidence the
right to receive upon payment of the adjusted Exercise Price that number of
share of Common Stock obtained by dividing (i) the sum of the adjusted number
of Warrant Shares issuable upon exercise of a Warrant by payment of the
adjusted Exercise Price plus the Exercise Price prior to adjustment by (ii)
the adjusted Exercise Price (without giving effect to the provisions of
Section 13(h)).
Irrespective of any adjustments in the Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 14. Statement on Warrants. Irrespective of any adjustment
---------------------
in the number or kind of shares issuable upon the exercise of the Warrants or
the Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
SECTION 15. Fractional Interest. The Company shall not be required
-------------------
to issue fractional shares of Common Stock on the exercise of Warrants. If
more than one Warrant shall be presented for exercise in full at the same time
by the same Holder, the number of full shares of Common Stock which shall be
issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock acquirable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall direct the Transfer Agent to pay
an amount in cash calculated by it to equal the then current market price per
share multiplied by such fraction computed to the nearest whole cent. The
Holders, by their acceptance of the Warrant Certificates, expressly waive any
and all rights to receive any fraction of a share of Common Stock or a stock
certificate representing a fraction of a share of Common Stock.
SECTION 16. Notices to Warrant Holders. Upon any adjustment of the
--------------------------
Exercise Price pursuant to Section 13, the Company shall promptly thereafter
(i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing selected by the Board of
Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered Holders of
the Warrant Certificates at his address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage prepaid. The
Warrant Agent shall be entitled to rely on the above-referenced accountant's
certificate and shall be under no duty or responsibility with respect to any
such certificate, except to exhibit the same from time to time to any Holder
desiring an inspection
17
thereof during reasonable business hours. The Warrant Agent shall not at any
time be under any duty or responsibility to any Holder to determine whether
any facts exist that may require any adjustment of the number of shares of
Common Stock or other stock or property issuable on exercise of the Warrants
or the Exercise Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value (or the kind or amount) of any shares of
Common Stock or other stock or property which may be issuable on exercise of
the Warrants. The Warrant Agent shall not be responsible for any failure of
the Company to make any cash payment or to issue, transfer or deliver any
shares of Common Stock or stock certificates or other common stock or property
upon the exercise of any Warrant.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other
than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock
or distributions referred to in Section 13 hereof); or
(c) of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change
in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination), or a tender
offer or exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) a Change of Control (as defined in the Indenture) occurs; or
(f) the Company proposes to take any other action that would
require an adjustment of the Exercise Price or the number of Warrant
Shares pursuant to Section 13;
then the Company shall cause to be filed with the Warrant Agent and shall
cause to be given to each of the registered Holders of the Warrant
Certificates at such Holder's address appearing on the Warrant register, at
least 20 days (or 10 days in any case specified in clauses (a) or (b) above)
prior to the applicable record date hereinafter specified, or promptly in the
case of events for which there is no record date, by first class mail, postage
prepaid, a written notice stating (i) the date as of which the holders of
record of shares of Common Stock to be entitled to receive any such rights,
options, warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up or Change of
Control is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of
18
Common Stock shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up or Change
of Control. The failure to give the notice required by this Section 16 or any
defect therein shall not affect the legality or validity of any distribution,
right, option, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or Change of Control or the vote upon
any action. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the
right to vote or to consent or to receive notice as shareholders in respect of
the meetings of shareholders or the election of Directors of the Company or
any other matter, or any rights whatsoever as shareholders of the Company.
SECTION 17. Merger, Consolidation or Change of Name of Warrant
--------------------------------------------------
Agent. Any corporation into which the Warrant Agent may be merged or with
-----
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent
under the provisions of Section 19. Any such successor Warrant Agent shall
promptly cause notice of its succession as Warrant Agent to be mailed (by
first class mail, postage prepaid) to each Holder at such Holder's last
address as shown on the register maintained by the Warrant Agent pursuant this
Agreement. In case at the time such successor to the Warrant Agent shall
succeed to the agency created by this Agreement, and in case at that time any
of the Warrant Certificates shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and in case at that time any of the Warrant
Certificates shall not have been countersigned, any successor to the Warrant
Agent may countersign such Warrant Certificates either in the name of the
predecessor Warrant Agent or in the name of the successor to the Warrant
Agent; and in all such cases such Warrant Certificates shall have the full
force and effect provided in the Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
SECTION 18. Warrant Agent. The Warrant Agent undertakes the duties
-------------
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company and the Warrant Agent assumes
no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution
of the Warrant Certificates except as herein otherwise provided.
19
(b) The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the covenants contained in this
Agreement or in the Warrant Certificates to be complied with by the
Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
Holder of any Warrant Certificate in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to
the Company or to any Holder of any Warrant Certificate for any action
taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature reasonably incurred by the Warrant Agent in the execution of this
Agreement and to indemnify the Warrant Agent and save it harmless against
any and all liabilities, including judgments, reasonable costs and counsel
fees, for anything done or omitted by the Warrant Agent in the execution
of this Agreement except as a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Holders of Warrant
Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such
action as it may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the production thereof at
any trial or other proceeding relative thereto, and any such action, suit
or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent and any recovery of judgment shall be for the ratable
benefit of the Holders of the Warrants, as their respective rights or
interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though
it were not Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions
hereof. The Warrant
20
Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder of any Warrant Certificate to make or cause
to be made any adjustment of the Exercise Price or number of the Warrant
Shares or other securities or property deliverable as provided in this
Agreement, or to determine whether any facts exist which may require any
of such adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making
the same. The Warrant Agent shall not be accountable with respect to the
validity or value or the kind or amount of any Warrant Shares or of any
securities or property which may at any time be issued or delivered upon
the exercise of any Warrant or with respect to whether any such Warrant
Shares or other securities will when issued be validly issued and fully
paid and nonassessable, and makes no representation with respect thereto.
SECTION 19. Resignation and Removal of Warrant Agent; Appointment
-----------------------------------------------------
of Successor. No resignation or removal of the Warrant Agent and no
------------
appointment of a successor warrant agent shall become effective until the
acceptance of appointment by the successor warrant agent as provided herein.
The Warrant Agent may resign its duties and be discharged from all further
duties and liability hereunder (except liability arising as a result of the
Warrant Agent's own negligence of willful misconduct) after giving written
notice to the Company. The Company may remove the Warrant Agent upon written
notice, and the Warrant Agent shall thereupon in like manner be discharged
from all further duties and liabilities hereunder, except as aforesaid. The
Warrant Agent shall, at the Company's expense, cause to be mailed (by first
class mail, postage prepaid) to each Holder of a Warrant at his last address
as shown on the register of the Company maintained by the Warrant Agent a copy
of said notice of resignation or notice of removal, as the case may be. Upon
such resignation or removal, the Company shall appoint in writing a new
warrant agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation by
the resigning Warrant Agent or after such removal, then the resigning Warrant
Agent or the Holder of any Warrant may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. Any new warrant
agent, whether appointed by the Company or by such a court, shall be a
corporation doing business under the laws of the United States or any state
thereof, in good standing and having a combined capital and surplus of not
less than $50,000,000. The combined capital and surplus of any such new
warrant agent shall be deemed to be the combined capital and surplus as set
forth in the most recent annual report of its condition published by such
warrant agent prior to its appointment, provided that such reports are
published at least annually pursuant to law or to the requirements of a
federal or state supervising or examining authority. After acceptance in
writing of such appointment by the new warrant agent, it shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be
legally and validly executed and delivered by the resigning or removed Warrant
Agent. Not later than the effective date of any such appointment, the Company
shall give notice thereof to the resigning or removed Warrant Agent. Failure
to give any notice provided for in this Section, however, or any defect
therein, shall not affect the legality or validity of the resignation of the
Warrant Agent or the appointment of a new warrant agent, as the case may be.
21
SECTION 20. Registration. The Company and the Warrant Agent
------------
acknowledge that Holders shall have the registration rights set forth in the
Warrant Registration Rights Agreement.
SECTION 21. Reports.
-------
(a) So long as any of the Warrants remain outstanding, and to the
extent the Company is required to send such documents to the holders of its
outstanding Common Stock, whether or not required by the rules and regulations
of the Securities and Exchange Commission (the "Commission"), the Company
shall furnish to the Holders of the Warrants (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants; (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports;
and (iii) on a quarterly basis, certain financial information and operating
data with respect to each Subsidiary (as defined in the Indenture) and Joint
Venture (as defined in the Indenture) engaged in a Telecommunications Business
(as defined in the Indenture), in the form specified by Schedule __ of the
Indenture. In addition, whether or not required by the rules and regulations
of the Commission, the Company will file a copy of all such information and
reports with the Commission for public availability (unless the Commission
will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a sufficient
number of copies of all SEC Reports that the Warrant Agent may be required to
deliver to the Holders of the Warrants under this Section 21.
SECTION 22. Rule 144A. The Company hereby agrees with each Holder,
---------
for so long as any Registrable Securities remain outstanding, to make
available, upon request of any Holder of Registrable Securities, to any Holder
or beneficial owner of Registrable Securities in connection with any sale
thereof and any prospective purchaser of such Registrable Securities
designated by such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Securities pursuant to Rule 144A.
SECTION 23. Notices to Company and Warrant Agent. Any notice or
------------------------------------
demand authorized by this Agreement to be given or made by the Warrant Agent
or by the Holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
Hyperion Telecommunications, Inc
5 West Third Street
Coudersport, Pennsylvania 016915
Telecopy: (814) 274-8631
Attention: Daniel R. Milliard
22
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or
by the Holder(s) of any Warrant Certificate to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:
Bank or Montreal Trust Company
77 Water Street
New York, New York 10005
Telecopy: (212) 701-7684
Attention:
SECTION 24. Supplements and Amendments. The Company and the
--------------------------
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any Holders of Warrant Certificates in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way adversely affect the interests of the Holders of Warrant
Certificates. Any amendment or supplement to this Agreement that has a
material adverse effect on the interests of Holders shall require the written
consent of Holders representing a majority of the then outstanding Warrants.
The consent of each Holder of a Warrant affected shall be required for any
amendment pursuant to which the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased. The Warrant Agent shall be entitled to receive and, subject to
Section 18, shall be fully protected in relying upon, an officers' certificate
and opinion of counsel as conclusive evidence that any such amendment or
supplement is authorized or permitted hereunder, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms.
SECTION 25. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 26. Termination. This Agreement (other than the Company's
-----------
obligations with respect to Warrants previously exercised and with respect to
indemnification under Section 18) shall terminate at 5:00 p.m., New York City
time on the Expiration Date.
SECTION 27. Governing Law. THIS AGREEMENT AND EACH WARRANT
-------------
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE.
SECTION 28. Benefits of This Agreement.
--------------------------
23
(a) Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Warrant Agent and the
Holders of the Warrant Certificates any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Warrant Agent and the Holders of the
Warrant Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any preemptive
right, to receive any notice of meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically provided for herein.
The Holders of the Warrants are not entitled to share in the assets of the
Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
(c) All rights of action in respect of this Agreement are vested in
the Holders of the Warrants, and any Holder of any Warrant, without the
consent of the Warrant Agent or the Holder of any other Warrant, may, on such
Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's rights
hereunder, including the right to exercise, exchange or surrender for purchase
such Holder's Warrants in the manner provided in this Agreement.
SECTION 29. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
[Signature Page Follows]
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
HYPERION TELECOMMUNICATIONS, INC.
/s/ Daniel R. Milliard
By: ________________________________
Name: Daniel R. Milliard
Title: President
[Seal]
Attest: ______________________
Secretary
/s/ Therese Gaballah
By: ________________________________
Name: Therese Gaballah
Title: Vice President
[Seal]
Attest: _______________________
Secretary
EXHIBIT A
[Form of Warrant Certificate]
[Face]
EXERCISABLE ON OR AFTER THE EXERCISABILITY DATE (AS DEFINED HEREIN).
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY
FROM THE SENIOR NOTES ORIGINALLY SOLD AS A UNIT WITH SUCH WARRANTS UNTIL THE
EARLIER TO OCCUR OF (i) 90 DAYS FROM THE DATE OF ISSUANCE, (ii) SUCH DATE AS
THE BEAR, STEARNS & CO. INC., CHASE SECURITIES INC. AND NATIONSBANC CAPITAL
MARKETS, INC. MAY, IN THEIR DISCRETION, DEEM APPROPRIATE, (iii) IN THE EVENT A
CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE) OCCURS, THE DATE THE COMPANY
MAILS NOTICE THEREOF TO HOLDERS OF THE SENIOR NOTES AND (iv) THE DATE ON WHICH
THE EXCHANGE OFFER (AS DEFINED IN THE INDENTURE) IS CONSUMMATED.
No.
CUSIP No. _______
_______ Warrants
Warrant Certificate
HYPERION TELECOMMUNICATIONS, INC.
This Warrant Certificate certifies that Bank of Montreal Trust
Company or its registered assigns, is the registered holder of Warrants
expiring April 1, 2001 (the "Warrants") to purchase Common Stock, par value
$.01 (the "Common Stock"), of Hyperion Telecommunications, Inc., a Delaware
corporation (the "Company"). Each Warrant entitles the registered holder upon
exercise at any time from 9:00 a.m. on the Separation Date referred to below
or any time on or after the earlier to occur of (i) May 1, 1997 and (ii) in
the event a Change of Control (as defined in the Indenture) occurs, the date
the Company mails the notice thereof to holders of Senior Notes and holders of
Warrants (the "Exercisability Date") until 5:00 p.m. New York City Time on
_____________ to receive from the Company 1.8645 fully paid and nonassessable
shares of Common Stock (the "Warrant Shares") at the initial exercise price
(the "Exercise Price") of $0.01 per share payable in lawful money of the
United States of America upon surrender of this Warrant Certificate and
payment of the Exercise Price at the office or agency of the Warrant Agent,
but only subject to the conditions set forth herein and in the Warrant
Agreement referred to on the reverse hereof. The Exercise Price and number of
Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
No Warrant may be exercised before the Exercisability Date. No
Warrant may be exercised after 5:00 p.m., New York City Time on April 1, 2001,
and to the extent not exercised by such time such Warrants shall become void.
26
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, Hyperion Telecommunications, Inc. has caused
this Warrant Certificate to be signed by its President and by its Assistant
Secretary, each by a signature or a facsimile thereof, and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
Dated:
HYPERION TELECOMMUNICATIONS, INC.
By:________________________________________
Name: Daniel R. Milliard
Title: President and Secretary
By:________________________________________
Name: Randolph S. Fowler
Title: Vice President and Assistant
Secretary
Countersigned:
as Warrant Agent
By:___________________
Authorized Signature
27
[Form of Warrant Certificate]
[Reverse]
[Unless and until it is exchanged in whole or in part for Warrants in
definitive form, this Warrant may not be transferred except as a whole by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the depositary or
any such nominee to a successor depositary or a nominee of such successor
depositary. The Depository Trust Company ("DTC"), (55 Water Street, New York,
New York) shall act as the depositary until a successor shall be appointed by
the Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]*
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR"). THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (Y) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IN A TRANSACTION MEETING THE
_______________
* This paragraph is to be included only if the Warrant is in global
form.
28
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
THE COMPANY, (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (Z) IT WILL NOTIFY ANY PURCHASER
OF THE SECURITY EVIDENCED HEREBY, PRIOR TO CLOSING OF ANY SALE, OF
THE RESALE RESTRICTIONS SET FORTH IN (Y) ABOVE.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring April 1, 2001 entitling the holder on
exercise to receive shares of Common Stock, par value $.0l, of the Company
(the "Common Stock"), and are issued or to be issued pursuant to a Warrant
Agreement dated as of April 15, 1996 (the "Warrant Agreement"), duly executed
and delivered by the Company to Bank of Montreal Trust Company, as warrant
agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for
a description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants. A copy of the Warrant Agreement may be obtained by
the holder hereof upon written request to the Company. Capitalized terms used
herein without definition shall have the meanings ascribed to them in the
Warrant Agreement.
Warrants may be exercised at any time from 9:00 a.m. on or after the
Exercisability Date and until 5:00 p.m., New York City Time on April 1, 2001.
The holder of Warrants evidenced by this Warrant Certificate may exercise them
by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with
payment of the Exercise Price in lawful money of the United States of America
at the office of the Warrant Agent. In the event that upon any exercise of
Warrants evidenced hereby the number of Warrants exercised shall be less than
the total number of Warrants evidenced hereby, there shall be issued to the
holder hereof or his assignee a new Warrant Certificate evidencing the number
of Warrants not exercised. No adjustment shall be made for any dividends on
any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price set forth on the face hereof and/or the number of shares of
Common Stock issuable upon the exercise of each Warrant shall, subject to
certain conditions, be adjusted. No fractions of a share of Common Stock will
be issued upon the exercise of any Warrant, but the Company will pay the cash
value thereof determined as provided in the Warrant Agreement.
29
The Warrant Agreement provides that the Company shall be bound by certain
registration obligations with respect to the Common Stock issuable upon
exercise of the Warrants.
Warrant Certificates, when surrendered at the office of the Warrant Agent
by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
30
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to receive ________ shares of Common Stock and
herewith tenders payment for such shares to the order of HYPERION
TELECOMMUNICATIONS, INC., in the amount of $_________ in accordance with the
terms hereof. The undersigned requests that a certificate for such shares be
registered in the name of _______________________, whose address is
______________________, and that such shares be delivered to
_________________, whose address is ____________________________. If said
number of shares is less than all of the shares of Common Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
_____________________________, whose address is ________________________, and
that such Warrant Certificate be delivered to _____________________________,
whose address is ____________________________.
Signature
Date:
Signature Guaranteed
31
SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS/1/
-----------------------------------------------
The following exchanges of a part of this Global Warrant for definitive
Warrants have been made:
Number of
Amount of decrease Amount of increase Warrants in this
in Number of in Number of Global Warrant Signature of
Warrants in this Warrants in this following such authorized officer of
Date of Exchange Global Warrant Global Warrant decrease or increase Warrant Agent
- -------------------------------------------------------------------------------------------------------
______________
/1/ This is to be included only if the Warrant is in global form.
32
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
WARRANTS
Re: _____ Warrants to Purchase Common Stock (the "Warrants") of HYPERION
TELECOMMUNICATIONS, INC.
This Certificate relates to _____ Warrants held in * _______ book-entry or *
_______ definitive form by __________ (the "Transferor").
The Transferor*:
[_] has requested the Warrant Agent by written order to deliver in exchange for
its beneficial interest in the Global Warrants held by the depositary a
Warrant or Warrants in definitive, registered form equal to its beneficial
interest in such Global Warrant (or the portion thereof indicated above); or
[_] has requested the Warrant Agent by written order to exchange or register the
transfer of a Warrant or Warrants
In connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and that the
transfer of this Warrant does not require registration under the Securities
Act of 1933, as amended (the "Securities Act") because:
[_] Such Warrant is being acquired for the Transferor's own account without
transfer (in satisfaction of Section 7 of the Warrant Agreement).
Such Warrant is being transferred (i) to a qualified institutional buyer
(as defined in Rule 144A under the Securities Act), in reliance on Rule 144A.
[_] Such Warrant is being transferred (i) in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if the Company so requests)
or (ii) pursuant to an effective registration statement under the Securities
Act.
[_] Such Warrant is being transferred to an institutional accredited investor
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
pursuant to a private placement exemption from the registration requirements
of the Securities Act (together with a certification).
*Check applicable box.
1
[_] Such Warrant is being transferred in reliance on and in compliance with
another exemption from the registration requirements of the Securities
Act (and based on an opinion of counsel if the Company so requests).
[INSERT NAME OF TRANSFEROR]
By:
Date:
*Check applicable box.
2
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
WARRANTS
Re: _____ Warrants to Purchase Common Stock (the "Warrants") of HYPERION
TELECOMMUNICATIONS, INC.
This Certificate relates to _____ Warrants held in * _______ book-entry or *
_______ definitive form by __________ (the "Transferor").
The Transferor*:
[_] has requested the Warrant Agent by written order to deliver in exchange for
its beneficial interest in the Global Warrants held by the depositary a
Warrant or Warrants in definitive, registered form equal to its beneficial
interest in such Global Warrant (or the portion thereof indicated above); or
[_] has requested the Warrant Agent by written order to exchange or register the
transfer of a Warrant or Warrants
In connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and that the
transfer of this Warrant does not require registration under the Securities
Act of 1933, as amended (the "Securities Act") because:
[_] Such Warrant is being acquired for the Transferor's own account without
transfer (in satisfaction of Section 7 of the Warrant Agreement).
[_] Such Warrant is being transferred (i) to a qualified institutional buyer (as
defined in Rule 144A under the Securities Act), in reliance on Rule 144A.
[_] Such Warrant is being transferred (i) in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if the Company so requests)
or (ii) pursuant to an effective registration statement under the Securities
Act.
[_] Such Warrant is being transferred to an institutional accredited investor
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
pursuant to a private placement exemption from the registration requirements
of the Securities Act (together with a certification).
*Check applicable box.
1
[_] Such Warrant is being transferred in reliance on and in compliance with
another exemption from the registration requirements of the Securities Act (and
based on an opinion of counsel if the Company so requests).
[INSERT NAME OF TRANSFEROR]
By:
Date:
*Check applicable box.
2