|
Moscow CableCom Corp.
WARRANT AGREEMENT
May 18, 2006
i
TABLE OF CONTENTS
Page
SECTION
1.
Warrant Certificates.
1
SECTION
2.
Execution of Warrant Certificates.
1
SECTION
3.
Registration.
2
SECTION
4.
Registration of Transfers and Exchanges.
2
SECTION
5.
Exercisability and Cancellation of Warrants; Exercise of Warrants;
HSR Compliance.
3
SECTION
6.
Payment of Taxes.
4
SECTION
7.
Delivery of Warrant Shares.
4
SECTION
8.
Mutilated or Missing Warrant Certificates.
4
SECTION
9.
Reservation of Warrant Shares.
5
SECTION
10.
Adjustment of Exercise Price and Number of Warrant
Shares Issuable.
5
(a)
Adjustment for Change in Capital Stock.
5
(b)
Adjustment for Other Distributions.
6
(c)
Market Price
7
(d)
When De Minimis Adjustment May Be Deferred
7
(e)
Notice of Adjustment.
7
(f)
Reorganization of Company
7
(g)
Adjustment in Number of Shares
8
(h)
Form of Warrants.
8
SECTION
11.
No Dilution or Impairment.
8
SECTION
12.
Fractional Interests.
9
SECTION
13.
Notices to Warrantholder.
9
SECTION
14.
Notices to Company and Warrantholder.
11
SECTION
15.
Amendments and Waivers.
11
SECTION
16.
Representations and Warranties of the Warrantholder.
12
SECTION
17.
Successors.
12
SECTION
18.
Termination.
12
SECTION
19.
Governing Law; Jurisdiction; Venue.
12
SECTION
20.
Benefits of this Warrant Agreement.
13
SECTION
21.
Headings.
13
SECTION
22.
Interpretation.
14
SECTION
23.
Entire Agreement.
14
SECTION
24.
Severability.
14
SECTION
25.
Counterparts.
14
EXHIBIT A: FORM OF WARRANT CERTIFICATE
16
1013433
1
WARRANT AGREEMENT
This WARRANT AGREEMENT (this "Warrant Agreement") dated as
of May 18, 2006, by and between Moscow CableCom Corp., a
Delaware corporation ("MOCC" or the "Company"), and the undersigned
(the "Warrantholder").
WHEREAS, the parties hereto have entered into a Subscription
Agreement dated May 5, 2006 (the "Subscription Agreement"),
pursuant to which the Warrantholder has acquired Units of the
Company consisting of (i) one share of Common Stock, par value $.01
per share, ("Common Stock"), and (ii) one-half warrant to purchase
a share of Common Stock (the "Warrants"), collectively (the
"Units"), at a price of and in the total amount set forth in and on
the terms and conditions described in the Subscription Agreement,
which is incorporated by reference herein;
WHEREAS, the Company has authorized the Warrants, and approved
the issuance and grant to the Warrantholder Warrants, with each
whole Warrant entitling the Warrantholder to purchase one share of
Common Stock (the "Warrant Shares") at an Exercise Price (as
defined herein);
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
SECTION
1.
Warrant Certificates.
The Company shall promptly cause to be executed and delivered to
the Warrantholder certificate(s) evidencing the Warrants ("Warrant
Certificate(s)") to be issued to the Warrantholder. The
Warrant Certificate(s) shall be issued in registered form only,
shall be substantially in the form set forth in Exhibit A attached
hereto, and may have such letters, numbers or other identification
marks and legends, summaries or endorsements printed thereon as the
Company may deem appropriate and that are not inconsistent with the
terms of this Warrant Agreement or as may be required by applicable
law, rule or regulation. The Warrant Certificate(s) shall be
dated the date hereof.
SECTION
2.
Execution of Warrant Certificates.
The Warrant Certificate(s) shall be signed on behalf of the
Company by its Chief Executive Officer, President or a Director of
the Company. Each such signature upon the Warrant Certificate(s)
may be in the form of a facsimile signature and may be imprinted or
otherwise reproduced on the Warrant Certificate(s).
In case any officer or director of the Company who shall have
signed the Warrant Certificate(s) shall cease to be such officer
before the Warrant Certificate(s) so signed shall have been
disposed of by the Company, such Warrant Certificate(s)
nevertheless may be delivered or disposed of as though such person
had not ceased to be such officer of the Company .
2
SECTION
3.
Registration.
The Company will keep or cause to be kept books for registration
of ownership and transfer of the Warrant Certificate(s) issued
pursuant to this Warrant Agreement. The Warrant Certificate(s)
issued pursuant to this Warrant Agreement shall be numbered by the
Company and initially shall be registered by the Company in the
name of the Warrantholder. The Company may deem and treat the
registered holder of the Warrant Certificate(s) as the absolute
owner thereof (notwithstanding any notation of ownership or other
writing thereon made by anyone), for the purpose of any exercise
thereof and for all other purposes
.
SECTION
4.
Registration of Transfers and Exchanges.
(a)
Transfers . Subject to the following provisions of
this Section 4, the Warrants are transferable, in whole or in part,
upon surrender of the Warrant Certificate(s) evidencing such
Warrants at the office of the Company referred to in Section 14,
together with a written assignment in the form of the Assignment
appearing at the end of the form of Warrant Certificate attached
hereto, duly executed by the Warrantholder or its agent or
attorney. Upon such surrender, the Company shall, subject to this
Section 4, register or cause the registration of the transfer upon
the books maintained by or on behalf of the Company for such
purpose. If the Warrants evidenced by the Warrant Certificate(s)
are to be transferred in whole, the Company shall execute and
deliver new Warrant Certificate(s) in the name of the assignee or
assignees in the denominations specified in the instrument of
assignment. If the Warrants evidenced by the Warrant Certificate(s)
are to be transferred in part, the Company shall execute and
deliver new Warrant Certificate(s) to and in the name of the
assignee or assignees in the denominations specified in the
instrument of assignment and new Warrant Certificate(s) to and in
the name of the Warrantholder in an amount equal to the number of
Warrants evidenced by the surrendered Warrant Certificate(s) that
were not transferred.
(b)
Restrictions on Transfer . The Warrants may not be
sold, pledged, hypothecated, assigned, conveyed, transferred or
otherwise disposed of (each a "transfer") unless the transfer
complies with all applicable securities laws and the provisions of
this Warrant Agreement.
(c)
Exchanges . The Warrant Certificate(s) may be exchanged, at
the option of the Warrantholder, upon surrender of such Warrant
Certificate(s) at the office of the Company referred to in Section
14, for one or more other Warrant Certificate(s) representing in
the aggregate the same number of Warrants as was represented by the
surrendered Warrant Certificate(s).
(d)
Legend on Warrant Certificates and Warrant Shares .
The Warrant Certificates and all certificates evidencing Warrant
Shares to be issued upon exercise of any Warrant shall be stamped
or imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED BY
THIS
3
CERTIFICATE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH, OR PURSUANT TO AN EXEMPTION
FROM, THE REQUIREMENTS OF SUCH ACT AND LAWS.
If the Warrant Certificates and certificates evidencing Warrant
Shares are issued with the aforementioned legend, upon the
occurrence of any event permitting the removal of such legend, the
Company, upon the surrender of certificates containing such legend,
shall, at its own expense, deliver to the holder one or more new
certificates evidencing Warrants or Warrant Shares not bearing such
legend.
SECTION
5.
Exercisability and Cancellation of Warrants; Exercise of Warrants;
HSR Compliance.
(a)
Exercise . Subject to the terms and conditions set
forth in this Section 5, the Warrants may be exercised, in whole or
in part (but not as to any fractional part of a Warrant), at any
time or from time to time on and from the date hereof until 5:00
p.m., New York City time, on the second anniversary of the date
hereof (the "Expiration Date"). The minimum amount
exercisable shall be two half-Warrants representing one Warrant
Share and the aggregate number of Warrants exercisable shall be an
even number representing whole Warrant Shares. To exercise
any Warrant, the Warrantholder shall deliver to the Company at its
office referred to in Section 14 the following: (i) a written
notice in the form of the Election to Purchase appearing at the end
of the form of Warrant Certificate attached hereto of the
Warrantholder's election to exercise Warrants, which notice shall
specify the number of Warrants being exercised; (ii) the Warrant
Certificate(s) evidencing the Warrants being exercised; and (iii)
payment of the aggregate Exercise Price. All rights of the
Warrantholder with respect to any Warrant that has not been
exercised on or prior to 5:00 p.m., New York City time, on the
Expiration Date shall immediately cease and such Warrants shall be
automatically cancelled without any further action on the part of
the Company or the Warrantholder.
All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled and disposed of by the Company. The
Company shall keep copies of this Warrant Agreement and any notices
given or received hereunder available for inspection by the holders
during normal business hours at its office.
(b)
Payment of Exercise Price . The exercise price per
Warrant shall be equal to 120% of the closing bid price of the
Common Stock as quoted on the Nasdaq National Market on May 4,
2006, subject to adjustment pursuant to Section 10 (the "Exercise
Price"). Payment of the aggregate Exercise Price with
respect to Warrants being exercised hereunder shall be made by the
payment to the Company, in cash, by check or wire transfer, of an
amount equal to the Exercise Price multiplied by the number of
Warrants then being exercised.
(c)
HSR Compliance .
If the Warrantholder determines that a notification under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder (the "HSR
Act"), is required in connection with the exercise of any Warrants,
the Company
4
together with the Warrantholder shall (i) file as soon as
practicable after the date of such determination notifications
under the HSR Act, (ii) respond as promptly as practicable to all
inquiries or requests received from the United States Federal Trade
Commission or the Antitrust Division of the Department of Justice
for additional information or documentation and (iii) respond as
promptly as practicable to all inquiries and requests received from
any State Attorney General or other governmental authority in
connection with antitrust matters. The Company shall take
such action as may be necessary to ensure that any necessary
notifications or filings are made and that all inquiries and
requests received from the relevant governmental authorities are
responded to as promptly as practicable.
SECTION
6.
Payment of Taxes.
The Company shall be responsible for paying any and all issue,
documentary, stamp or other taxes that may be payable in respect of
any issuance or delivery of Warrant Shares on the exercise of a
Warrant.
SECTION
7.
Delivery of Warrant Shares.
The Company shall, as promptly as practicable, and in any event
within three (3) business days, execute and deliver or cause to be
executed and delivered, to or upon the written order of the
Warrantholder, and in the name of the Warrantholder or such
Warrantholder's designee, a stock certificate or stock certificates
representing the number of Warrant Shares to be issued on exercise
of the Warrant(s). Such certificates shall bear the restrictive
legend set forth in Section 4(d) above and may, in addition, bear
any other restrictive legend required under applicable law, rule or
regulation. The stock certificate or certificates so delivered
shall be registered in the name of the Warrantholder or such other
name as shall be designated in said notice. A Warrant shall be
deemed to have been exercised and such stock certificate or stock
certificates shall be deemed to have been issued, and such holder
or any other Person so designated to be named therein shall be
deemed to have become a holder of record of such shares for all
purposes, as of the date that such notice, together with payment of
the aggregate Exercise Price and the Warrant Certificate or Warrant
Certificates evidencing the Warrants to be exercised, is received
by the Company as aforesaid. If the Warrants evidenced by any
Warrant Certificate are exercised in part, the Company shall, at
the time of delivery of the certificates representing the Warrant
Shares, deliver to the Warrantholder a new Warrant Certificate
evidencing the Warrants that were not exercised or surrendered,
which shall in all respects (other than as to the number of
Warrants evidenced thereby) be identical to the Warrant Certificate
being exercised. Any Warrant Certificates surrendered upon exercise
of Warrants shall be canceled by the Company.
SECTION
8.
Mutilated or Missing Warrant Certificates.
In case any Warrant Certificate shall be mutilated, lost, stolen
or destroyed, the Company shall issue, 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 representing an
equivalent number of Warrants, but only upon surrender of the
mutilated certificate or upon receipt of evidence reasonably
satisfactory to the Company of
5
such loss, theft or destruction of such Warrant Certificate, as
applicable, together with an indemnity from the warrant-holder that
is deemed satisfactory by the Company.
SECTION
9.
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 that may then be
deliverable upon the exercise of all outstanding Warrants.
Before taking any action that would cause an adjustment pursuant
to Section 10 hereof to reduce the Exercise Price below the then
par value (if any) of the Warrant Shares, the Company will take any
corporate action that may, in the opinion of its counsel (that 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 that may be
issued upon exercise of Warrants will, upon issue, be fully
paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the
issue thereof.
SECTION
10.
Adjustment of Exercise Price and Number of Warrant Shares Issuable.
The Exercise Price and the number of the Warrant Shares issuable
upon the exercise of each Warrant are subject to adjustment from
time to time upon the occurrence of the events enumerated in this
Section. "Capital Stock" means shares now or hereafter
authorized of any class of common stock of the Company and any
other stock of the Company, however designated, that has the right
(subject to any prior rights of any class or series of preferred
stock) to participate in any distribution of the assets or earnings
of the Company without limit as to percentage or per share amount.
(a)
Adjustment for Change in Capital Stock.
If the Company:
(i)
pays a dividend or makes a distribution on its Common Stock in
shares of Capital Stock;
(ii)
subdivides its outstanding shares of Common Stock into a greater
number of shares;
(iii)
combines its outstanding shares of Common Stock into a smaller
number of shares;
(iv)
issues by reclassification of its Common Stock any shares of
Capital Stock;
then the Exercise Price and the number and kind of shares of
Capital Stock of the Company issuable upon the exercise of each
Warrant as in effect immediately prior to such action shall be
6
proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of
shares of Capital Stock of the Company that he or she would have
owned immediately following such action if such Warrant had been
exercised immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision,
combination or reclassification.
If after an adjustment the Warrantholder, upon exercise of the
Warrants, shall be entitled to receive shares of more than one
class of Capital Stock of the Company, the Board of Directors of
the Company (the "Board of Directors") shall determine the
allocation of the adjusted Exercise Price between the classes of
capital stock in good faith. After such allocation, the
exercise rights and the Exercise Price with respect to each such
class of Capital Stock shall thereafter be subject to adjustment on
terms comparable to those applicable to Common Stock in this
Section 10.
Such adjustment shall be made successively whenever any event
set forth above shall occur.
(b)
Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock
any of its assets (including but not limited to cash), debt
securities, preferred stock, or any rights or warrants to purchase
debt securities, preferred stock, assets or other securities of the
Company, the Exercise Price shall be adjusted in accordance with
the formula:
E'
= E x (
M - F)
M
where:
E'
= the
adjusted Exercise Price.
E
= the
Exercise Price immediately prior to the adjustment.
M
= the market
price per share of Common Stock on the record date mentioned
below.
F
= the fair
market value on the record date for such distribution of the
assets, securities, rights or warrants applicable to one share of
Common Stock. The Board of Directors shall determine the fair
market value in good faith.
The adjustment shall be made successively whenever any such
distribution is made and shall become effectively immediately after
the record date for such distribution.
7
(c)
Market Price
In this Agreement, the market price per share of Common Stock on
any date shall equal the average of the Quoted Prices of the Common
Stock for 30 consecutive trading days commencing 45 trading days
before the date in question. The "Quoted Price" of the Common
Stock is the last reported sales price of the Common Stock as
reported by Nasdaq, National Market System, or if the Common Stock
is listed on a securities exchange, the last reported sales price
of the Common Stock on such exchange, which shall be for
consolidated trading if applicable to such exchange, or if neither
so reported or listed, the last reported bid price of the Common
Stock. In the absence of one or more such quotations, the
Board of Directors of the Company shall determine the market price
on the basis of such quotations and evaluations as it in reasonable
good faith considers appropriate; provided, however, that if the
Warrantholder objects in writing to such determination within 20
business days after receiving notice of any adjustment based in
part on such determination,
| 
