THIS WARRANT WAS ORIGINALLY ISSUED ON JULY 19,
1995 AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT,
THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT. THIS WARRANT IS
ALSO SUBJECT TO A SECURITIES PURCHASE
AGREEMENT DATED AS OF JULY 3, 1995 BETWEEN
PEOPLES TELEPHONE COMPANY, INC. (THE
"COMPANY") AND THE PARTIES NAMED THEREIN,
INCLUDING THE ORIGINAL HOLDER HEREOF. A COPY
OF THE SECURITIES AGREEMENT WILL BE FURNISHED
WITHOUT CHARGE BY THE COMPANY TO THE HOLDER
HEREOF UPON REQUEST.
STOCK PURCHASE WARRANT
Date of Issuance: July 19, 1995 Certificate No. W-1
FOR VALUE RECEIVED, PEOPLES TELEPHONE COMPANY, INC., a
New York corporation (the "Company"), hereby grants to APPIAN
CAPITAL PARTNERS, L.L.C., a Delaware limited liability company
("ACP") or its transferees and assigns the right to purchase from
the Company at any time after the Date of Issuance (as defined
below) a total of 275,000 Warrant Shares (as defined herein) at a
price per share of $5.25 (the "Initial Exercise Price"). This
Warrant is issued pursuant to the terms of the Securities Purchase
Agreement, dated as of July 3, 1995 (the "Securities Purchase
Agreement"), among the Company, ACP and UBS Capital Corporation, a
New York corporation, as amended from time to time in accordance
with its terms. Certain capitalized terms used herein are defined
in Section 8 hereof. The amount and kind of securities obtainable
pursuant to the rights granted hereunder and the purchase price for
such securities are subject to adjustment pursuant to the
provisions contained in this Warrant.
This Warrant is subject to the following provisions:
SECTION 1. Exercise of Warrant.
1A. Exercise Period. The purchase rights represented by
this Warrant may be exercised, in whole or in part, at any time and
from time to time after the Date of Issuance to and including 5:00
p.m., New York time, on July 19, 2005 or, if such day is not a
business day, on the next following business day (the "Exercise
Period").
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised
when all of the following items have been delivered to the Company
(the "Exercise Time"):
(a) a completed Exercise Agreement, as
described in Section 1C below, executed by the Person
exercising all or part of the purchase rights represented by
this Warrant (the "Purchaser");
(b) this Warrant;
(c) if the Purchaser is not the Registered
Holder, an Assignment or Assignments in the form set forth in
Exhibit II hereto evidencing the assignment of this Warrant to
the Purchaser; and
(d) either (1) a check payable to the Company
in an amount equal to the product of the Exercise Price (as
defined below) multiplied by the number of Warrant Shares
being purchased upon such exercise (the "Aggregate Exercise
Price"), (2) the surrender to the Company of shares of Common
Stock, shares of Preferred Stock or debt securities of the
Company having a value equal to the Aggregate Exercise Price
of the Warrant Shares being purchased upon such exercise
(provided that for purposes of this subparagraph, the value of
any note or other debt security or any preferred stock shall
be deemed to be equal to the aggregate outstanding principal
amount or liquidation value thereof plus all accrued and
unpaid interest thereon or accrued or declared and unpaid
dividends thereon), or (3) a written notice to the Company
that the Purchaser is exercising the Warrant (or a portion
thereof) by authorizing the Company to withhold from issuance
a number of Warrant Shares issuable upon such exercise of the
Warrant which when multiplied by the Fair Market Value of one
Warrant Share is equal to the Aggregate Exercise Price (and
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such withheld shares shall no longer be issuable under this
Warrant).
(ii) Certificates for Warrant Shares purchased upon
exercise of this Warrant shall be delivered by the Company to the
Purchaser within five days after the date of the Exercise Time
together with any cash payable in lieu of a fraction of a share
pursuant to Section 13 hereof. Unless this Warrant has expired or
all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new warrant, substantially identical
hereto, representing the rights formerly represented by this
Warrant which have not expired or been exercised and shall, within
such five-day period, deliver such new warrant to the Person
designated for delivery in the Exercise Agreement.
(iii) The Warrant Shares issuable upon the exercise
of this Warrant shall be deemed to have been issued to the
Purchaser at the Exercise Time, and the Purchaser shall be deemed
for all purposes to have become the Registered Holder of such
Warrant Shares at the Exercise Time.
(iv) The issuance of certificates for Warrant Shares
upon exercise of this Warrant shall be made without charge to the
Registered Holder or the Purchaser for any issuance tax in respect
thereof or other cost incurred by the Company in connection with
such exercise and the related issuance of Warrant Shares (other
than transfer taxes payable because the holder of the Warrant
Shares is other than the Registered Holder).
(v) The Company shall not close its books against
the transfer of this Warrant or of any Warrant Shares issued or
issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant. The Company
shall from time to time take all such action as may be necessary to
assure that the par value per share of the unissued Warrant Shares
acquirable upon exercise of this Warrant is at all times equal to
or less than the Exercise Price then in effect. In the event that
the Company fails to comply with its obligations set forth in the
foregoing sentence, the Purchaser may (but shall not be obligated
to) purchase Warrant Shares hereunder at par value, and the Company
shall be obligated to reimburse the Purchaser for the aggregate
amount of consideration paid in connection with such exercise in
excess of the Exercise Price then in effect.
(vi) The Company shall assist and cooperate with the
Registered Holder or any Purchaser required to make any
governmental filings or obtain any governmental approvals prior to
or in connection with any exercise of this Warrant (including,
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without limitation, making any filings required to be made by the
Company).
(vii) Notwithstanding any other provision hereof,
if an exercise of any portion of this Warrant is to be made in
connection with a Change of Control (as defined in the Amended
Certificate of Incorporation) or other transaction affecting the
Company, such exercise may at the election of the Registered Holder
be conditioned upon the consummation of such transaction, in which
case such exercise shall not be deemed to be effective until
immediately prior to the consummation of such transaction.
(viii) The Company shall at all times reserve and
keep available out of its authorized but unissued Common Stock
solely for the purpose of issuance upon the exercise of this
Warrant, the maximum number of Warrant Shares issuable upon the
exercise of this Warrant. All Warrant Shares which are so issuable
shall, when issued and upon the payment of the applicable Exercise
Price, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. The Company shall take all
such actions as may be necessary to ensure that all such Warrant
Shares may be so issued without violation by the Company of any
applicable law or governmental regulation or any requirements of
any domestic securities exchange or the NASDAQ National Market upon
which shares of Common Stock or other securities constituting
Warrant Shares may be listed (except for official notice of
issuance which shall be immediately delivered by the Company upon
each such issuance). The Company shall not take any action which
would cause the number of authorized but unissued Warrant Shares to
be less than the number of such shares required to be reserved
hereunder for issuance upon exercise of the Warrant.
(ix) If the Warrant Shares issuable by reason of
exercise of this Warrant are at the time of exercise of this
Warrant convertible into or exchangeable for any other stock or
securities of the Company, the Company shall, at the Purchaser's
option and upon surrender of this Warrant by such Purchaser as
provided above together with any notice, statement or payment
required to effect such conversion or exchange of Warrant Shares,
deliver to such Purchaser (or as otherwise specified by such
Purchaser) a certificate or certificates representing the stock or
securities into which the Warrant Shares issuable by reason of such
conversion are convertible or exchangeable, registered in such name
or names and in such denomination or denominations as such
Purchaser has specified.
(x) The Company shall not, and shall not permit its
subsidiaries to, directly or indirectly, by any action (including,
without limitation, reincorporation in a jurisdiction other than
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New York, amending its certificate of incorporation or through any
Organic Change (as defined below), issuance or sale of securities
or any other voluntary action) avoid or seek to avoid the
observance or performance of any of terms of this Warrant or impair
or diminish its value (except for any action which ratably affects
all Warrant Shares and shares of Common Stock), but shall at all
times in good faith assist in the carrying out of all such terms of
this Warrant. Without limiting the generality of the foregoing,
the Company shall (a) obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its
obligations under this Warrant and (b) not undertake any reverse
stock split, combination, reorganization or other reclassification
of its capital stock which would have the effect of causing a
material portion of the purchase rights represented hereby to
become exercisable for less than one share of Common Stock.
1C. Exercise Agreement. Upon any exercise of this
Warrant, the Purchaser shall deliver to the Company an Exercise
Agreement in substantially the form set forth in Exhibit I hereto,
except that if the Warrant Shares are not to be issued in the name
of the Registered Holder, the Exercise Agreement shall also state
the name of the Person to whom the certificates for the Warrant
Shares are to be issued, and if the number of Warrant Shares to be
issued does not include all of the Warrant Shares purchasable
hereunder, it shall also state the name of the Person to whom a new
Warrant for the unexercised portion of the rights hereunder is to
be issued.
SECTION 2. Adjustment of Exercise Price and Number of
Shares. In order to prevent dilution of the rights granted under
this Warrant, the Initial Exercise Price shall be subject to
adjustment from time to time as provided in this Section 2 (as so
adjusted, the "Exercise Price"), and the number of Warrant Shares
obtainable upon exercise of this Warrant shall be subject to
adjustment from time to time, each as provided in this Section 2.
2A. If and whenever on or after the Date of Issuance the
Company issues or sells, or in accordance with Section 2C is deemed
to have issued or sold, any shares of Common Stock for a
consideration per share less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then
immediately upon such issue or sale or deemed issue or sale the
Exercise Price shall be reduced to the Exercise Price determined by
dividing (i) the sum of (1) the product derived by multiplying the
Exercise Price in effect immediately prior to such issue or sale by
the number of shares of Common Stock Deemed Outstanding immediately
prior to such issue or sale, plus (2) the consideration, if any,
received by the Company upon such issue or sale, by (ii) the number
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of shares of Common Stock Deemed Outstanding immediately after such
issue or sale.
2B. Notwithstanding the foregoing, there shall be no
adjustment in the Exercise Price as a result of any issue or sale
(or deemed issue or sale) of (i) shares of Common Stock upon
conversion of the Preferred Stock in accordance with the terms
thereof as in effect as of the Date of Issuance, (ii) shares of
Common Stock pursuant to exercise of stock options, warrants and
other rights to acquire Common Stock described in Schedule 4.3 to
the Securities Purchase Agreement (as such number of shares is
proportionately adjusted for subsequent stock splits, combinations
of shares and stock dividends affecting the Common Stock), in each
case pursuant to the terms thereof as in effect on the date of the
Securities Purchase Agreement or as such terms may thereafter be
adjusted as described in Schedule 4.3 thereto, (iii) shares of
Common Stock upon exercise of stock options granted to employees
and directors of the Company and its Subsidiaries pursuant to the
terms of stock option plans and stock ownership plans approved by
the Company's Board of Directors, and (iv) shares of Common Stock
as consideration for the acquisition of any interest in any
business or company from a Person other than an Affiliate (A) which
acquisition is not prohibited pursuant to the Securities Purchase
Agreement, and (B) so long as the Fair Market Value of one Warrant
Share as of the closing of such acquisition exceeds $4.50 per share
(as such price is proportionately adjusted for subsequent stock
splits, combinations of shares and stock dividends affecting the
Warrant Shares) and so long as the Fair Market Value of one Warrant
Share has not at any time from the Date of Issuance through such
time been equal to greater than $5.25 per share (as so adjusted).
2C. Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section
2B, the following shall be applicable:
(1) Issuance of Rights or Options. If the Company
in any manner grants or sells any Options and the price per share
for which Common Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible
Securities issuable upon exercise of such Options, is less than the
Exercise Price in effect immediately prior to the time of the
granting or sale of such Options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such Options
or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options
shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Options
for such price per share. For purposes of this paragraph, the
"price per share for which Common Stock is issuable" shall be
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determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the granting or sale
of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon exercise of all such
Options, plus in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or
sale of such Convertible Securities and the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities issuable upon the
exercise of such Options. No further adjustment of the Exercise
Price shall be made when Convertible Securities are actually issued
upon the exercise of such Options or when Common Stock is actually
issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
(2) Issuance of Convertible Securities. If the
Company in any manner issues or sells any Convertible Securities
and the price per share for which Common Stock is issuable upon
conversion or exchange thereof is less than the Exercise Price in
effect immediately prior to the time of such issue or sale, then
the maximum number of shares of Common Stock issuable upon
conversion or exchange of such Convertible Securities shall be
deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this
paragraph, the "price per share for which Common Stock is issuable"
shall be determined by dividing (i) the total amount received or
receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (ii) the total maximum number of
shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities. No further adjustment of the
Exercise Price shall be made when Common Stock is actually issued
upon the conversion or exchange of such Convertible Securities, and
if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustments of the Exercise
Price had been or are to be made pursuant to other provisions of
this Section 2, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.
(3) Change in Option Price or Conversion Rate. If
the purchase price provided for in any Options, the additional
consideration, if any, payable upon the conversion or exchange of
any Convertible Securities or the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock
changes at any time, the Exercise Price in effect at the time of
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such change shall be immediately adjusted to the Exercise Price
which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the
case may be, at the time initially granted, issued or sold. For
purposes of this Section 2C, if the terms of any Option or
Convertible Security which was outstanding as of the Date of
Issuance of this Warrant are changed in the manner described in the
immediately preceding sentence, then such Option or Convertible
Security and the Common Stock deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued
as of the date of such change; provided that no such change shall
at any time cause the Exercise Price hereunder to be increased.
(4) Treatment of Expired Options and Unexercised
Convertible Securities. Upon the expiration of any Option or the
termination of any right to convert or exchange any Convertible
Security without the exercise of any such Option or right, the
Exercise Price then in effect hereunder shall be adjusted
immediately to the Exercise Price which would have been in effect
at the time of such expiration or termination had such Option or
Convertible Security, to the extent outstanding immediately prior
to such expiration or termination, never been issued. For purposes
of this Section 2C, the expiration or termination of any Option or
Convertible Security which was outstanding as of the Date of
Issuance shall not cause the Exercise Price hereunder to be
adjusted unless, and only to the extent that, a change in the terms
of such Option or Convertible Security caused it to be deemed to
have been issued after the Date of Issuance.
(5) Calculation of Consideration Received. If any
Common Stock, Option or Convertible Security is issued or sold or
deemed to have been issued or sold for cash, the consideration
received therefor shall be deemed to be the amount received by the
Company therefor (net of discounts, commissions and related
expenses). If any Common Stock, Option or Convertible Security is
issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be
the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company shall be the Fair Market
Value thereof as of the date of receipt. If any Common Stock,
Option or Convertible Security is issued to the owners of the
non-surviving entity in connection with any merger in which the
Company is the surviving Company, the amount of consideration
therefor shall be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is
attributable to such Common Stock, Option or Convertible Security,
as the case may be. The fair value of any consideration other than
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cash and securities shall be determined jointly by the Company and
the holders of a majority of the outstanding Warrants. If such
parties are unable to reach agreement within a reasonable period of
time, the fair value of such consideration shall be determined by
an independent appraiser experienced in valuing such type of
consideration jointly selected by the Company and the holders of a
majority of the outstanding Warrants. The determination of such
appraiser shall be final and binding upon the parties, and the fees
and expenses of such appraiser shall be borne by the Company.
(6) Integrated Transactions. In case any Option is
issued in connection with the issue or sale of other securities of
the Company, together comprising one integrated transaction in
which no specific consideration is allocated to such Option by the
parties thereto, the Option shall be deemed to have been issued for
a consideration of $.01.
(7) Treasury Shares. The number of shares of
Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company or any
Subsidiary, and the disposition of any shares so owned or held
shall be considered an issue or sale of Common Stock.
(8) Record Date. If the Company takes a record of
the holders of Common Stock for the purpose of entitling them
(i) to receive a dividend or other distribution payable in Common
Stock, Options or in Convertible Securities or (ii) to subscribe
for or purchase Common Stock, Options or Convertible Securities,
then such record date shall be deemed to be the date of the issue
or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or upon the making of
such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be.
2D. Subdivision or Combination of Common Stock. If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares,
the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and if the Company at any time
combines (by reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such
combination shall be proportionately increased.
2E. Reorganization, Reclassification, Consolidation,
Merger or Sale. Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of the Company's assets or other transaction in
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each case which is effected in such a way that holders of Common
Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "Organic
Change". Prior to the consummation of any Organic Change, the
Company shall make appropriate provision (in form and substance
satisfactory to the Registered Holders of a majority of the
Warrants) to ensure that each Registered Holder of Warrant(s) shall
thereafter have the right to acquire and receive upon exercise
thereof, in lieu of or addition to (as the case may be) the Warrant
Shares immediately theretofore acquirable and receivable upon
exercise of such Registered Holder's Warrant(s), such shares of
stock, securities or assets as such holder would have received in
connection with such Organic Change if such holder had exercised
its Warrants immediately prior to such Organic Change. In each
such case, the Company shall also make appropriate provision (in
form and substance satisfactory to the Registered Holders of a
majority of the Warrants then outstanding) to insure that the
provisions of this Section 2 and Section 5 hereof shall thereafter
be applicable to the Warrants (including, in the case of any such
Organic Change in which the successor entity or purchasing entity
is other than the Company, an immediate adjustment of the Exercise
Price to the value for the Common Stock reflected by the terms of
such Organic Change and a corresponding immediate adjustment in the
number of Warrant Shares acquirable and receivable upon exercise of
the Warrants, if the value so reflected is less than the Fair
Market Value of the Common Stock in effect immediately prior to
such Organic Change). The Company shall not effect any such
Organic Change unless, prior to the consummation thereof, the
successor entity (if other than the Company) resulting from such
Organic Change assumes by written instrument (in form and substance
reasonably satisfactory to the Registered Holders of a majority of
the Warrants then outstanding) the obligation to deliver to each
Registered Holder of Warrant(s) such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such
Registered Holder may be entitled to acquire.
2F. Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then the Company's Board of
Directors shall make an appropriate adjustment in the Exercise
Price and the number of Warrant Shares obtainable upon exercise of
this Warrant so as to protect the rights of the Registered Holder
of this Warrant; provided that no adjustment shall be made for
stock appreciation rights and phantom stock rights granted to
employees pursuant to employee benefit plans approved by the
Company's Board of Directors; and provided further that no such
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adjustment shall increase the Exercise Price as otherwise
determined pursuant to this Section 2 or decrease the number of
Warrant Shares issuable upon conversion of any Warrant.
2G. Notices.
(i) Promptly after any adjustment of the Exercise
Price, the Company shall give written notice thereof to the Registered
Holder, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Company shall give written notice to the
Registered Holder at least 20 days prior to the date on which any
Organic Change shall take place.
(iii) The Company shall also give written notice to the
Registered Holder at least 20 days prior to the date on which any
Organic Change, dissolution or liquidation shall take place.
SECTION 3. Liquidating Dividends. If the Company
declares or pays a dividend upon the Common Stock payable otherwise
than in cash out of earnings or earned surplus (determined in accordance
with generally accepted accounting principles, consistently applied)
except for a stock dividend payable in shares of Common Stock (a
"Liquidating Dividend"), then the Company shall pay to the Registered
Holder of this Warrant at the time of payment thereof the Liquidating
Dividend which would have been paid to such Registered Holder on the
Warrant Stock had this Warrant been fully exercised immediately prior
to the date on which a record is taken for such Liquidating Dividend,
or, if no record is taken, the date as of which the record holders of
Common Stock entitled to such dividends are to be determined.
SECTION 4. Purchase Rights. To the extent not
prohibited by paragraph EIGHTH of the Corporation's Certificate of
Incorporation, if at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then
each holder of Warrants shall be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase
Rights which such holder could have acquired if such holder had
held the number of Warrant Shares acquirable upon conversion of
such holder's Warrants immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase
Rights, or if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.
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SECTION 5. No Voting Rights; Limitations of Liability.
This Warrant shall not entitle the Registered Holder hereof to any
voting rights or other rights as a stockholder of the Company. No
provision hereof, in the absence of affirmative action by the
Registered Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of the Registered Holder shall
give rise to any liability of such Registered Holder for the
Exercise Price of Warrant Shares acquirable by exercise hereof or
as a stockholder of the Company.
SECTION 6. Transferability. Subject to the transfer
conditions referred to in the legend endorsed hereon, this Warrant
and all rights hereunder are transferable, in whole or in part,
without charge to the Registered Holder, upon surrender of this
Warrant with a properly executed Assignment (in the form of Exhibit
II hereto) at the principal office of the Company.
SECTION 7. Warrant Exchangeable for Different
Denominations. This Warrant is exchangeable, upon the surrender
hereof by the Registered Holder at the principal office of the
Company, for new Warrants of like tenor representing in the
aggregate the purchase rights hereunder, and each of such new
Warrants shall represent such portion of such rights as is
designated by the Registered Holder at the time of such surrender.
At the request of the Registered Holder (pursuant to a transfer of
Warrants or otherwise), this Warrant may be exchanged for one or
more Warrants to purchase Common Stock. The date the Company
initially issues Warrants pursuant to the Securities Purchase
Agreement shall be deemed to be the "Date of Issuance" regardless
of the number of times new certificates representing the unexpired
and unexercised rights formerly represented by this Warrant shall
be issued. All Warrants representing portions of the rights
hereunder are referred to herein as the "Warrants."
SECTION 8. Definitions. The following terms have the
meanings set forth below:
"Affiliate" means with respect to any Person, any other
Person directly or indirectly controlling or controlled by or is
under direct or indirect control with such specified Person.
"Amended Certificate of Incorporation" means the
Company's Amended Certificate of Incorporation filed with the
Secretary of the State of New York on July 18, 1995.
"Common Stock" means the Company's Common Stock, $.01 par
value per share, or any securities into which such Common Stock is
hereafter converted or exchanged.
"Common Stock Deemed Outstanding" means, at any given
time, the number of shares of Common Stock actually outstanding at
such time, plus the number of shares of Common Stock deemed to be
outstanding pursuant to Sections 2C(1) and 2C(2) hereof.
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"Convertible Securities" means any stock or securities
directly or indirectly convertible into or exchangeable for Common
Stock, other than any such securities referred to in Section 2B
above.
"Fair Market Value" of any security means the average of
the closing prices of such security's sales on all securities
exchanges on which such security may at the time be listed or as
reported on the NASDAQ National Market, or, if there has been no
sales on any such exchange or reported on the NASDAQ National
Market on any day, the average of the highest bid and lowest asked
prices on all such exchanges or reported at the end of such day,
or, if on any day such security is not so listed or included in the
NASDAQ National Market, the average of the representative bid and
asked prices quoted in the NASDAQ Stock Market as of 4:00 P.M., New
York time, or, if on any day such security is not quoted in the
NASDAQ Stock Market, the average of the highest bid and lowest
asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any
similar successor organization, in each such case averaged over a
period of 21 days consisting of the day as of which "Fair Market
Value" is being determined and the 20 consecutive business days
prior to such day. If at any time such security is not listed on
any securities exchange or quoted in the NASDAQ National Market,
the NASDAQ Stock Market or the over-the-counter market, the "Fair
Market Value" shall be the fair value thereof determined jointly by
the Company and the Registered Holders of a majority of the
Warrants. If such parties are unable to reach agreement within a
reasonable period of time, such fair value shall be determined by
an independent appraiser experienced in valuing securities jointly
selected by the Company and the Registered Holders of a majority of
the Warrants. The determination of such appraiser shall be final
and binding upon the parties, and the Company shall pay the fees
and expenses of such appraiser.
"Options" means any rights, warrants or options to
subscribe for or purchase Common Stock or Convertible Securities
other than rights, warrants or options referred to in Section 2B
above.
"Person" means an individual, a partnership (including a
limited partnership), a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" means the Cumulative Convertible
Preferred Stock issued pursuant to the Securities Purchase
Agreement.
"Registered Holder" means the holder of this Warrant as
reflected in the records of the Company maintained pursuant to
Section 13.
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"Warrant Shares" means shares of the Company's Common
Stock issuable upon exercise of the Warrant; provided, that if the
securities issuable upon exercise of the Warrants are issued by an
entity other than the Company or there is a change in the class of
securities so issuable, then the term "Warrant Shares" shall mean
shares of the security issuable upon exercise of the Warrants if
such security is issuable in shares, or shall mean the equivalent
units in which such security is issuable if such security is not
issuable in shares.
SECTION 9. Replacement. Upon receipt of evidence
reasonably satisfactory to the Company (an affidavit of the
Registered Holder shall be satisfactory) of the ownership and the
loss, theft, destruction or mutilation of any certificate
evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to
the Company (provided that if the Registered Holder is a financial
institution or other institutional investor its own agreement shall
be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Company shall (at its expense)
execute and deliver in lieu of such certificate a new certificate
of like kind representing the same rights represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate.
SECTION 10. Notices. Except as otherwise expressly
provided herein, all notices referred to herein shall be in writing
and shall be delivered by registered or certified mail, return
receipt requested, postage prepaid and will be deemed to have been
given when so mailed (i) to the Company, at its principal executive
offices and (ii) to a Registered Holder, at such Registered
Holder's address as it appears in the records of the Company
(unless otherwise indicated by any such Registered Holder).
SECTION 11. Amendment and Waiver. No amendment,
modification or waiver will be binding or effective with respect to
any provision of this Warrant without the prior written consent of
the Registered Holders of the Warrants then outstanding.
SECTION 12. Warrant Register. The Company shall
maintain at its principal executive offices a register for the
registration of transfer of Warrants. Upon the surrender of any
certificate representing Warrants at such place, the Company will,
at the request of the record holder of such certificate, execute
and deliver (at the Company's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the
number of Warrant Shares represented by the surrendered
certificate. Each such new certificate will be registered in such
name and will represent such number of Warrant Shares as is
requested by the holder of the surrendered certificate and will be
substantially identical in form to the surrendered certificate.
SECTION 13. Fractions of Shares. If any fractional
interest in a Warrant Share would, except for the provisions of
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this subparagraph, be delivered upon any exercise of the Warrant,
at the request of the Registered Holder the Company, in lieu of
delivering the fractional share therefor, shall pay an amount to
the Registered Holder thereof equal to the Fair Market Value of
such fractional interest as of the date of exercise.
SECTION 14. Descriptive Headings; Governing Law. The
descriptive headings of the several Sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a
part of this Warrant. THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
* * * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant
to be signed and attested by its duly authorized officers under its
corporate seal and to be dated as of the date hereof.
PEOPLES TELEPHONE COMPANY, INC.
By: _________________________
Name:
Title:
Attest:
____________________________
Assistant Secretary
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EXHIBIT I
EXERCISE AGREEMENT
To: Dated:
The undersigned, pursuant to the provisions set forth in
the attached Warrant (Certificate No. W-____), hereby agrees to
subscribe for the purchase of ______ Warrant Shares covered by such
Warrant and makes payment herewith in full therefor at the price
per share provided by such Warrant.
Signature ____________________
Address ______________________
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EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, _____________________________ hereby
sells, assigns and transfers all of the rights of the undersigned
under the attached Warrant (Certificate No. W-_____) with respect
to the number of the Warrant Shares covered thereby set forth
below, unto:
Names of Assignee Address No. of Shares
- - - ----------------- ------- -------------
Dated: Signature _______________________
_______________________
Witness _______________________
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