CORNING NATURAL GAS CORPORATION and Registrar and Transfer Company, as Warrant Agent WARRANT AGREEMENT Dated as of [ ], 2007
Exhibit 4.3
CORNING
NATURAL GAS CORPORATION
and
Registrar
and Transfer Company, as Warrant Agent
WARRANT
AGREEMENT
Dated as of [ ], 2007
Dated as of [ ], 2007
WARRANT AGREEMENT (the “Agreement”) dated as of
[ ],
2007 between CORNING NATURAL GAS CORPORATION, a New York
corporation (the “Corporation”), and REGISTRAR AND
TRANSFER COMPANY, a New Jersey corporation, as Warrant Agent
(the “Warrant Agent”).
WHEREAS, the Corporation proposes to issue up to 506,918 common
stock purchase Warrants, as hereinafter described (the
“Warrants”), which in the aggregate initially entitle
the holders thereof (the words “holders” or
“holder” meaning the registered holders or registered
holder of the Warrants) to purchase up to 506,918 shares of
common stock of the Corporation (the “Common Stock”)
which constitute 32% of the Common Stock outstanding (on a fully
diluted basis) on the date hereof (the Common Stock issuable on
exercise of the Warrants being referred to herein as the
“Warrant Shares”).
WHEREAS, the Corporation desires the Warrant Agent to act on
behalf of the Corporation, and the Warrant Agent is willing so
to act, in connection with the issuance, transfer, exchange and
exercise of Warrants and other matters as provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Appointment
of Warrant Agent. The Corporation hereby
appoints the Warrant Agent to act as agent for the Corporation
in accordance with the instructions set forth hereinafter in
this Agreement, and the Warrant Agent hereby accepts such
appointment. The Corporation may from time to time appoint such
Co-Warrant Agents as it may deem necessary or desirable upon ten
(10) days prior written notice to the Warrant Agent. The
Warrant Agent shall have no duty to supervise, and shall in no
event be liable for, the acts or omissions of any such
Co-Warrant Agent.
Section 2. Warrant
Certificates. The certificates evidencing the
Warrants (the “Warrant Certificates”) to be delivered
pursuant to this Agreement shall be in registered form only and
shall be substantially in the form set forth in Exhibit A
attached hereto.
Section 3. Execution
of Warrant Certificates. The Warrant
Certificates shall be signed on behalf of the Corporation by its
Chairman of the Board or its President and by its Secretary or
an Assistant Secretary. 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,
Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that
purpose the Corporation may adopt and use the facsimile
signature of any person who shall have been Chairman of the
Board, President, Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Warrant
Certificates shall be countersigned and delivered or disposed of
he or she shall have ceased to hold such office.
In case any officer of the Corporation 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
Corporation, 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 Corporation; and any
Warrant Certificate may be signed on behalf of the Corporation
by any person who, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the
Corporation to sign such Warrant Certificate, although at the
date of the execution of this Agreement any such person was not
such officer.
Warrant Certificates shall be dated the date of countersignature
by the Warrant Agent.
Section 4. Registration
and Countersignature. The Warrant Agent, on
behalf of the Corporation, shall hold the Warrant Certificates
unnumbered and unregistered.
The 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 or the President of
the Corporation, initially countersign, issue and deliver
Warrants collectively for all Warrants outstanding 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 Corporation and the Warrant Agent may deem and treat the
registered 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 Corporation nor the Warrant Agent shall be affected
by any notice to the contrary.
Section 5. Registration
of Transfers and Exchanges. The Warrant Agent
shall from time to time, subject to the limitations of
Section 6 hereof, register the transfer of any outstanding
Warrant Certificates upon the records to be maintained by it for
that purpose, upon surrender thereof duly endorsed or
accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to
the Warrant Agent, duly executed by the registered holder or
holders thereof or by the duly appointed legal representative
thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be
issued to the transferee(s) and the surrendered Warrant
Certificate shall be cancelled by the Warrant Agent. Cancelled
Warrant Certificates shall thereafter be disposed of by the
Warrant Agent in its customary manner.
Subject to the terms of this Agreement, Warrant Certificates may
be exchanged at the option of the holder(s) thereof, when
surrendered to the Warrant Agent at its principal corporate
trust office, which is currently located at the address listed
in Section 19 hereof, for another Warrant Certificate or
other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants. Any holder desiring to
exchange a Warrant Certificate shall deliver a written request
to the Warrant Agent, and shall surrender, duly endorsed or
accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to
the Warrant Agent, the Warrant Certificate or Certificates to be
so exchanged. Warrant Certificates surrendered for exchange
shall be cancelled by the Warrant Agent. Such cancelled Warrant
Certificates shall then be disposed of by such Warrant Agent in
its customary manner.
The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 5 and of
Section 4 hereof, the new Warrant Certificates required
pursuant to the provisions of this Section 5.
Section 6. Terms
of Warrants. The initial exercise price per
share at which Warrant Shares shall be purchasable upon the
exercise of Warrants (the “Exercise Price”) shall be
$20.00 per share. The Warrants shall be initially
exercisable in the aggregate for that number of shares of Common
Stock equal to 32% of the fully diluted Common Stock outstanding
on the date hereof (calculated after giving effect to the
exercise of such Warrants and all options, warrants and rights
to acquire Common Stock and the conversion of all convertible
securities for the maximum number of shares of Common Stock
obtainable whether or not such options, warrants or rights are
then exercisable or vested and whether or not such convertible
securities are then convertible).
Subject to the terms of this Agreement, each Warrant holder
shall have the right, which may be exercised until
5:00 p.m., New York City time on <expiration date>,
2011, to receive from the Corporation the number of fully paid
and nonassessable Warrant Shares 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. Each Warrant not exercised prior to 5:00 p.m., New
York City time, on <expiration date>, 2011, 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.
A Warrant may be exercised upon surrender to the Corporation at
the principal stock transfer office of the Warrant Agent, which
is currently located at the address listed in Section 19
hereof, of the certificate or certificates evidencing the
Warrants to be exercised with the form of election to purchase
filled in and signed and such other documentation as the Warrant
Agent may reasonably request, and upon payment to the Warrant
Agent for the account of the Corporation of the Exercise Price
which is set forth in the form of Warrant Certificate attached
hereto
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as Exhibit A as adjusted as herein provided, for the number
of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the aggregate Exercise Price shall be made
(i) in cash or by certified or official bank check payable
to the order of Registrar and Transfer Company, or the
equivalent thereof or (ii) in the manner provided in this
Section 6.
Subject to the provisions of Section 7 hereof, upon such
surrender of Warrants and payment of the Exercise Price, the
Corporation shall issue and cause to be delivered with all
reasonable dispatch to and in such name or names as the Warrant
holder may designate, a certificate or certificates for the
number of full Warrant Shares issuable upon the exercise of such
Warrants. Such certificate or certificates 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, 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 6 and of
Section 4 hereof, and the Corporation, whenever required by
the Warrant Agent, shall supply the Warrant Agent with Warrant
Certificates duly executed on behalf of the Corporation for such
purpose. The Warrant Agent may assume that any Warrant presented
for exercise is permitted to be so exercised under applicable
law and shall have no liability for acting in reliance on such
assumption.
All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Warrant Agent. Such canceled Warrant
Certificates shall then be disposed of by the Warrant Agent in
its customary manner. The Warrant Agent shall account promptly
to the Corporation with respect to Warrants exercised and
concurrently pay to the Corporation 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 available for inspection by
the holders with reasonable prior written notice during normal
business hours at its office. The Corporation shall supply the
Warrant Agent from time to time with such numbers of copies of
this Agreement as the Warrant Agent may request.
Section 7. Payment
of Taxes. The Corporation covenants and
agrees that it shall pay when due and payable any and all
federal and state documentary or stamp taxes (other than federal
or state income taxes or similar laws) or other costs which may
be payable in respect of the issue of the Warrants or any Common
Stock or certificates therefor issuable upon the exercise of the
Warrants (provided, however, the Corporation’s obligations
to any holder in this regard will in all events be conditioned
upon such holder cooperating with the Corporation in any
reasonable arrangement designed to minimize or eliminate any
such taxes), except that, if Warrant Shares or new Warrants
shall be registered in a name or names other than the name of
any holder, funds sufficient to pay all transfer taxes payable
as a result of such transfer shall be paid by such holder at the
time of delivery of the election to purchase.
Section 8. Mutilated
or Missing Warrant Certificates. In case any
of the Warrant Certificates shall be mutilated, lost, stolen or
destroyed, the Corporation shall issue and the Warrant Agent
shall 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 satisfactory to the Corporation and the
Warrant Agent of such loss, theft or destruction of such Warrant
Certificate and indemnity, also satisfactory to the Corporation
and the Warrant Agent. Except as otherwise provided herein, in
the case of the loss, theft, or destruction of a Warrant
Certificate, Corporation shall pay all expenses, taxes and other
charges payable in connection with any replacement of such
Warrant Certificate.
Section 9. Reservation
of Warrant Shares. The Corporation shall at
all times reserve and keep available out of its authorized but
unissued Common Stock (or out of shares of Common Stock held in
its treasury) solely for the purpose of issuance upon the
exercise of the Warrants, the maximum number of Warrant Shares
issuable upon
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the exercise of the Warrants. The Warrant Agent shall have no
duty to verify availability of such shares set aside by the
Corporation.
The Corporation or, if appointed, the transfer agent for the
Common Stock (the “Transfer Agent”) and every
subsequent transfer agent for any shares of the
Corporation’s Common Stock issuable upon the exercise of
any of the Warrants will be irrevocably authorized and directed
at all times to reserve such number of authorized stock
certificates as shall be required for such purpose. The
Corporation will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any
shares of the Company’s Common Stock issuable upon the
exercise of the Warrants. The Company will supply such Transfer
Agent with duly executed certificates for such purposes. The
Company will furnish such Transfer Agent a copy of all notices
of adjustments and certificates transmitted to each holder
pursuant to Section 11 hereof.
The Corporation covenants and agrees that all shares of Common
Stock that may be issued upon the exercise of the rights
represented by the Warrants shall, upon issuance, be validly
issued, fully paid and nonassessable, and free from all taxes,
liens, preemptive rights and charges with respect to the issue
thereof. The Corporation shall take all such actions as may be
necessary to ensure that all such Warrant Shares may be so
issued without violation by the Corporation of any applicable
law or governmental regulation or any requirements of any
domestic securities exchange or quotation system upon which
shares of Common Stock or other securities constituting Warrant
Shares may be listed or quoted (except for official notice of
issuance which shall be immediately delivered by the Corporation
upon each such issuance).
Section 10. Adjustment
of Number of Warrant Shares and Exercise Price.
(a) Adjustment of Number of Shares. Upon
each adjustment of the Warrant Price as provided in
subsection (b) of this Section 10, each holder
shall thereafter be entitled to purchase, at the Warrant Price
resulting from such adjustment, only the number of shares
(calculated to the nearest whole share) obtained by multiplying
the Warrant Price in effect immediately prior to such adjustment
by the number of shares purchasable by such holder pursuant
hereto immediately prior to such adjustment and dividing the
product thereof by the Warrant Price resulting from such
adjustment.
(b) Adjustment in Exercise Price. The
Warrant Price shall be subject to adjustment from time to time
as follows:
(i) If, at any time during the Term of this Agreement, the
number of shares of Common Stock outstanding is increased by a
stock dividend payable in shares of Common Stock or by a
subdivision or
split-up of
shares of Common Stock, then, following the record date fixed
for the determination of holders of Common Stock entitled to
receive such stock dividend, subdivision or
split-up,
the Warrant Price shall be appropriately decreased so that the
number of shares of Common Stock issuable upon the exercise
hereof shall be increased in proportion to such increase in
outstanding shares.
(ii) If, at any time during the Term of this Warrant, the
number of shares of Common Stock outstanding is decreased by a
combination of the outstanding shares of Common Stock, then,
following the record date for such combination, the Warrant
Price shall be appropriately increased so that the number of
shares of Common Stock issuable upon the exercise hereof shall
be decreased in proportion to such decrease in outstanding
shares.
(iii) Whenever the Warrant Price shall be adjusted as
provided in this Section 10, the Corporation shall promptly
prepare a statement showing the facts requiring such adjustment
and the Warrant Price that shall be in effect after such
adjustment, setting forth in reasonable detail and certifying
the calculation of such adjustment. The Corporation shall cause
a copy of such statement (i) to be filed with the Warrant
Agent and (ii) cause a copy of such statement to be sent by
mail, first class postage prepaid, to each holder at its, his or
her address appearing on the Warrant register. Where
appropriate, such copy may be given in advance and may be
included as part of the notice required to be mailed under the
provisions of clause (v) of this Section 10(b). The
Warrant Agent shall be fully protected in relying on any such
statement and on any adjustment therein contained and shall not
be deemed to have knowledge of such adjustment unless and until
it shall have received such statement.
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(iv) Adjustments made pursuant to this Section 10
shall be made on the date such dividend, subdivision,
split-up,
combination or distribution, as the case may be, is made, and
shall become effective at the opening of business on the
business day next following the record date for the
determination of stockholders entitled to such dividend,
subdivision,
split-up,
combination or distribution.
(v) In the event the Corporation shall propose to take any
action of the types described in this Section 10, the
Corporation shall forward, at the same time and in the same
manner, to holder such notice, if any, which the Corporation
shall give to the holders of capital stock of the Corporation.
(vi) In any case in which the provisions of this
Section 10 shall require that an adjustment shall become
effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event,
issuing to any holder of all or any part of any Warrant that
exercised all or part of such Warrant after such record date,
and before the occurrence of such event, the additional shares
of capital stock issuable upon such exercise by reason of the
adjustment required by such event over and above the shares of
capital stock issuable upon such exercise before giving effect
to such adjustment exercise; provided, however, that the
Corporation shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder’s right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
(c) Mergers, Consolidation, Sales. In the
case of any proposed consolidation or merger of the Corporation
with another entity, or the proposed sale of all or
substantially all of its assets to another person or entity, or
any proposed reorganization, recapitalization, reclassification
of the capital stock of the Corporation or other transaction,
then, as a condition of such consolidation, merger, sale,
reorganization, recapitalization, reclassification or other
transaction, the Corporation shall give 30 days’ prior
written notice thereof to Warrant holders and lawful and
adequate provision shall be made whereby holders shall
thereafter have the right to receive upon the basis and upon the
terms and conditions specified herein, in lieu of the shares of
the Common Stock of the Corporation immediately theretofore
purchasable hereunder, such shares of stock, securities or
assets as may (by virtue of such consolidation, merger, sale,
reorganization, recapitalization, reclassification or other
transaction) be issued or payable with respect to or in exchange
for the number of shares of such Common Stock purchasable
hereunder immediately before such consolidation, merger, sale,
reorganization, recapitalization, reclassification or other
transaction. In any such case appropriate provision shall be
made with respect to the rights and interests of the holders to
the end that the provisions hereof shall thereafter be
applicable as nearly as may be practicable, in relation to any
shares of stock, securities or assets thereafter deliverable
upon the exercise of the Warrants. The Corporation shall not
effect any such consolidation, merger, sale, reorganization,
recapitalization, reclassification or other transaction unless,
prior to the consummation thereof, the successor entity (if
other than the Corporation) resulting from such consolidation,
merger, sale, reorganization, recapitalization, reclassification
or other transaction (including a purchaser of all or
substantially all the Corporation’s assets) assumes by
written instrument the obligation to deliver to each holder of
Warrants such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be
entitled to acquire upon exercise of Warrants.
(d) Warrant Agent’s Disclaimer. The
Warrant Agent has no duty to determine when an adjustment under
this Section 10 should be made, how it should be made or
what it should be. The Warrant Agent makes no representation as
to the validity or value of any securities or assets issued upon
exercise of Warrants. The Warrant Agent shall not be responsible
for the Corporation’s failure to comply with this section.
(e) Form of Warrants. Irrespective of any
adjustments 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 and Exercise Price as are stated
in the Warrants initially issuable pursuant to this Agreement.
Section 11. Special
Arrangements of the Corporation. The
Corporation covenants and agrees with each holder of a Warrant
that during the Term of such Warrant, unless otherwise approved
by such holder:
(a) Certain Actions. The Corporation
shall not amend its certificate of incorporation to eliminate as
an authorized class of capital stock that class denominated as
“Common Stock” on the date hereof. The Corporation
shall not, and shall not permit its subsidiaries to, directly or
indirectly, by any action (including, without limitation,
reincorporation in a jurisdiction other than New York, amending
its Certificate of
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Incorporation (as may be amended
and/or
restated from time to time) or through any merger, sale,
consolidation, reorganization, reclassification, issuance or
sale of securities or any other action) avoid or seek to avoid
the observance or performance of any terms of this Agreement or
the Warrants or impair or diminish the value of the Warrants,
but shall at all times in good faith assist in the carrying out
of all such terms of this Agreement and the Warrants. Without
limiting the generality of the foregoing, the Corporation shall
(a) obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as
may be necessary to enable the Corporation to perform its
obligations under this Agreement and the Warrants and
(b) not undertake any reverse stock split, combination,
reorganization or other reclassification of its capital stock
which would have the effect of making the Warrants exercisable
for less than one share of Common Stock (except as permitted
under Section 10 hereof).
(b) Shall Bind Successors. This
Agreement, the Warrants and the rights evidenced hereby and
thereby shall be binding upon the successors of the Corporation.
(c) No Exercise Interference; Par
Value. The Corporation shall not close its books
against the transfer of any Warrant or of any Warrant Shares
issued or issuable upon the exercise of any Warrant in any
manner which interferes with the timely exercise of any Warrant.
The Corporation 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 the Warrants
is at all times equal to or less than the Warrant Price then in
effect.
(d) Governmental Filings. The Corporation
shall assist and cooperate with any reasonable request by any
holder of any Warrant which is required to make any governmental
filings or obtain any governmental approvals prior to or in
connection with any exercise of any Warrant.
(e) Notices of Certain Actions. The
Corporation shall give written notice to the holders at least
30 days prior to the date on which the Corporation closes
its books or takes a record (A) with respect to any
dividend or distribution upon the Common Stock, (B) with
respect to any pro rata subscription offer to holders of Common
Stock, or (C) for determining rights to vote with respect
to any recapitalization, reorganization, reclassification,
consolidation, merger, dissolution, liquidation or sale of all
or substantially all of the Corporation’s assets or other
transaction 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.
Section 12. Maintenance
of Registration and Qualification of Common
Stock. The Corporation shall use its best
efforts to maintain the effectiveness of the Corporation’s
Registration Statement (No.
[ ])
on
Form S-3
filed with the Securities and Exchange Commission for the
registration of the Warrant Shares, and keep current a
prospectus in those states in which the Warrants were initially
offered by the Corporation, for so long as the holders are
entitled to exercise any Warrants. However, that upon the
occurrence of any event that would cause the Registration
Statement not to be effective and usable for the issuance of the
Warrant Shares upon the exercise of any Warrant, the Corporation
may refuse to allow any Warrant to be exercised until the
Corporation has cured such defect.
Section 13. Notices
to Warrant holders. Any notice or other
document required or permitted to be given or delivered to
holders shall be delivered at, or sent by certified or
registered mail to, each holder at its, his or her address
appearing on the Warrant register. Any notice so addressed and
mailed by registered or certified mail shall be deemed to be
given when so mailed. Any notice so addressed and otherwise
delivered shall be deemed to be given when actually received by
the addressee.
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 Corporation or any other matter, or
any rights whatsoever as shareholders of the Corporation.
Section 14. Public
Offering; Sale of
Corporation. Notwithstanding any other
provision hereof, if an exercise of any portion of any Warrant
is to be made in connection with a public offering or a sale of
the Corporation (pursuant to a merger, sale of stock or
otherwise), such exercise may at the election of the holder of
such Warrant be
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conditioned upon the consummation of such transaction, in which
case such exercise shall not be deemed to be effective until
immediately prior to consummation of such transaction.
Section 15. Representations
of the Corporation. The Corporation has all
requisite corporate power and authority to enter into and
perform its obligations under this Agreement and the Warrants,
to deliver the Agreement to the Warrant Agent and to issue and
deliver the Warrants to the holders. The execution, delivery,
and performance by the Corporation of its obligations under this
Agreement and the Warrants, including the issuance and delivery
of the Warrants to the purchaser, have been duly authorized by
all necessary corporate action on the part of the Corporation.
This Agreement has been duly executed and delivered by the
Corporation and is a legal, valid, and binding obligation of the
Corporation and is enforceable against the Corporation in
accordance with its terms.
Section 16. 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 all or substantially all the corporate trust or
agency 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 18. 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 17. Warrant
Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement (and no implied
duties or obligations shall be read into this Agreement against
the Warrant Agent) upon the following terms and conditions, by
all of which the Corporation 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 Corporation 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.
(b) The Warrant Agent shall not be responsible for any
failure of the Corporation to comply with any of the covenants
contained in this Agreement or in the Warrant Certificates to be
complied with by the Corporation.
(c) The Warrant Agent may consult at any time with counsel
of its own selection (who may be counsel for the
Corporation), which counsel shall be generally recognized as
having competence in the subject matter under consideration, and
the Warrant Agent shall incur no liability or responsibility to
the Corporation 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. The Warrant Agent may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Warrant
Agent shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by
it hereunder.
(d) The Warrant Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to
the Warrant Agent and conforming to the
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requirements of this Agreement. The Warrant Agent shall incur no
liability or responsibility to the Corporation 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 (whether in its original or facsimile
form) believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(e) The Corporation agrees to pay to the Warrant Agent such
compensation for all services rendered by the Warrant Agent in
the administration and execution of this Agreement as the
Corporation and the Warrant Agent shall agree in writing to
reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature
incurred by the Warrant Agent in the execution of this Agreement
(including fees and expenses of its counsel) and to indemnify
the Warrant Agent (and any predecessor Warrant Agent) and save
it harmless against any and all claims (whether asserted by the
Corporation, a holder or any other person), damages, losses,
expenses (including taxes other than taxes based on the income
of the Warrant Agent), liabilities, including judgments, costs
and counsel fees and expenses, for anything done or omitted by
the Warrant Agent in the execution of this Agreement except as a
result of its gross negligence or willful misconduct. The
provisions of this Section 17(e) shall survive the
expiration of the Warrants and the termination of this Agreement.
(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 Corporation or
one or more registered holders of Warrant Certificates shall
furnish the Warrant Agent with security and indemnity
satisfactory to it 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
registered holders of the Warrants, as their respective rights
or interests may appear.
(g) The Warrant Agent, and any shareholder, director,
officer or employee of it, may buy, sell or deal in any of the
Warrants or other securities of the Corporation or become
pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money to
the Corporation 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 Corporation or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent
for the Corporation, and its duties shall be determined solely
by the provisions hereof. The Warrant Agent shall not be liable
for anything which it may do or refrain from doing in connection
with this Agreement except for its own gross negligence or
willful misconduct. The Warrant Agent shall not be liable for
any error of judgment made in good faith by it, unless it shall
be proved that the Warrant Agent was grossly negligent in
ascertaining the pertinent facts. Notwithstanding anything in
this Agreement to the contrary, in no event shall the Warrant
Agent be liable for special, indirect, punitive or consequential
loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Warrant Agent has been advised of
the likelihood of the loss or damage and regardless of the form
of the action.
(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.
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(j) Notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Warrant Agent shall
have any liability to any holder of a Warrant Certificate or
other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by
a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation; provided that the
Corporation must use its reasonable best efforts to have any
such order, decree or ruling lifted or otherwise overturned as
soon as possible.
(k) Any application by the Warrant Agent for written
instructions from the Corporation may, at the option of the
Warrant Agent, set forth in writing any action proposed to be
taken or omitted by the Warrant Agent under this Agreement and
the date on
and/or after
which such action shall be taken or such omission shall be
effective. The Warrant Agent shall not be liable for any action
taken by, or omission of, the Warrant Agent in accordance with a
proposal included in such application on or after the date
specified in such application (which date shall not be less than
three Business Days after the date any officer of the
Corporation actually receives such application, unless any such
officer shall have consented in writing to any earlier date)
unless prior to taking any such action (or the effective date in
the case of an omission), the Warrant Agent shall have received
written instructions in response to such application specifying
the action to be taken or omitted.
(l) No provision of this Agreement shall require the
Warrant Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights.
(m) In addition to the foregoing, the Warrant Agent shall
be protected and shall incur no liability for, or in respect of,
any action taken or omitted by it in connection with its
administration of this Agreement if such acts or omissions are
in reliance upon the proper execution of the certification
concerning beneficial ownership appended to the form of
assignment and the form of the election attached hereto unless
the Warrant Agent shall have actual knowledge that, as executed,
such certification is untrue, or the non-execution of such
certification including, without limitation, any refusal to
honor any otherwise permissible assignment or election by reason
of such non-execution.
Section 18. Change
of Warrant Agent. The Warrant Agent may at
any time resign as Warrant Agent upon written notice to the
Corporation. If the Warrant Agent shall become incapable of
acting as Warrant Agent, the Corporation shall appoint a
successor to such Warrant Agent. If the Corporation shall fail
to make such appointment within a period of 30 days after
it has been notified in writing of such resignation or of such
incapacity by the Warrant Agent or by the registered holder of a
Warrant Certificate, then the registered holder of any Warrant
Certificate or the Warrant Agent may apply, at the expense of
the Corporation, to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending
appointment of a successor to such Warrant Agent, either by the
Corporation or by such a court, the duties of the Warrant Agent
shall be carried out by the Corporation. The holders of a
majority of the unexercised Warrants shall be entitled at any
time to remove the Warrant Agent and appoint a successor to such
Warrant Agent. If a Successor Warrant Agent shall not have been
appointed within 30 days of such removal, the Warrant Agent
may apply, at the expense of the Corporation, to any court of
competent jurisdiction for the appointment of a successor to the
Warrant Agent. Such successor to the Warrant Agent need not be
approved by the Corporation or the former Warrant Agent. After
appointment the successor to the Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Warrant Agent without further
act or deed; but the former Warrant Agent upon payment of all
fees and expenses due it and its agents and counsel shall
deliver and transfer to the successor to the Warrant Agent any
property at the time held by it hereunder and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Failure to give any notice provided for in this
Section 18, however, or any defect therein, shall not
affect the legality or validity of the appointment of a
successor to the Warrant Agent.
Section 19. Notices
to Corporation and Warrant Agent. Any notice
or demand authorized by this Agreement to be given or made by
the Warrant Agent or by the registered holder of any Warrant
Certificate to or on the Corporation shall be sufficiently given
or made when and if delivered by hand or by courier, or
deposited in
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the mail, first class or registered, postage prepaid, or by
telecopy confirmed in writing, and addressed (until another
address is filed in writing by the Corporation with the Warrant
Agent), as follows:
Corning Natural Gas Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
In case the Corporation 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 corporate
trust office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the
Corporation or by the registered holder(s) of any Warrant
Certificate to the Warrant Agent shall be sufficiently given
when and if delivered by hand or by courier, or deposited in the
mail, first-class or registered, postage prepaid, or by telecopy
confirmed in writing, and addressed (until another address is
filed in writing by the Warrant Agent with the Corporation) to
the Warrant Agent as follows:
Registrar and Transfer Company
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
[ ]
Section 20. Supplements
and Amendments. The Corporation 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 Corporation 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.
Upon the delivery of a certificate from an appropriate officer
of the Corporation which states that the proposed supplement or
amendment is in compliance with the terms of this
Section 20, the Warrant Agent shall execute such supplement
or amendment. Notwithstanding anything in this Agreement to the
contrary, the prior written consent of the Warrant Agent must be
obtained in connection with any supplement or amendment which
alters the rights or duties of the Warrant Agent. The
Corporation and the Warrant Agent may amend any provision herein
with the consent of the holders of Warrants exercisable for a
majority of the Warrant Shares issuable on exercise of all
outstanding Warrants.
Section 21. Successors. All
the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
Section 22. Termination. This
Agreement will terminate on any earlier date if all Warrants
have been exercised or expired without exercise. The provisions
of Section 17 hereof shall survive such termination.
Section 23. 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 the validity,
interpretation, and enforcement of this Agreement and each
Warrant Certificate shall be governed by and construed in
accordance with the internal laws of said State without giving
effect to the conflict of law principles thereof. The parties
agree that, all actions and proceedings arising out of this
Agreement or any of the transactions contemplated hereby, shall
be brought in Steuben County, New York and that, in connection
with any such action or proceeding, submit to the jurisdiction
of, and venue in, such court. Each of the parties hereto also
irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim arising out of this Agreement or the
transactions contemplated hereby.
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Section 24. Benefits
of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other
than the Corporation, the Warrant Agent and the registered
holders of the Warrant Certificates any legal or equitable
right, remedy or claim under this Agreement, and this Agreement
shall be for the sole and exclusive benefit of the Corporation,
the Warrant Agent and the registered holders of the Warrant
Certificates.
SECTION 25. 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.
Section 26. Force
Majeure. In no event shall the Warrant Agent
be responsible or liable for any failure or delay in the
performance of its obligations under this Agreement arising out
of or caused by, directly or indirectly, forces beyond its
reasonable control, including without limitation strikes, work
stoppages, accidents, acts of war or terrorism, civil or
military disturbances, nuclear or natural catastrophes or acts
of God, and interruptions, loss or malfunctions of utilities,
communications or computer (software or hardware) services.
<Signature
page follows>
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first
above written.
CORNING NATURAL GAS CORPORATION
By: ▇▇▇▇▇▇▇ ▇. German
Its: President and Chief Executive Officer
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Chief Financial Officer
REGISTRAR AND TRANSFER COMPANY,
as Warrant Agent
| By: |
Authorized Signatory
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