Exhibit 10.6
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF
OCTOBER 11, 2000, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE
AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SUCH ACT.
Right to Purchase 909,091 Shares of Common Stock, par value $.001 per share
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, RGC International Investors, LDC
or its registered assigns, is entitled to purchase from American Telescource
International, Inc., a Delaware corporation (the "Company"), at any time or from
time to time during the period specified in Paragraph 2 hereof, Nine Hundred
Nine Thousand Ninety-One (909,091) fully paid and nonassessable shares of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), at an
exercise price of $1.71875 (per share (the "Exercise Price"); provided, however,
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if the average of the Closing Bid Prices (as defined in the Certificate of
Designation (as defined in the Securities Purchase Agreement (as defined
below))) of the Common Stock on the American Stock Exchange (the "AMEX") (or
such other principal securities market or stock exchange on which the Common
Stock is then listed) for the ten (10) Trading Days (as defined in the
Certificate of Designation) preceding October 11, 2001 (the "Anniversary Price")
is less than the Exercise Price, the Exercise Price will be reduced to the
Anniversary Price. The term "Warrant Shares," as used herein, refers to the
shares of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Paragraph 4 hereof. The
term Warrants means this Warrant and the other warrants issued pursuant to that
certain Securities Purchase Agreement, dated October 11, 2000, by and among the
Company and the Buyers listed on the execution page thereof (the "Securities
Purchase Agreement").
This Warrant is subject to the following terms, provisions, and conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject
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to the provisions hereof, this Warrant may be exercised by the holder hereof, in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the "Exercise Agreement"), to
the Company during normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer for the
account of the Company of the Exercise Price for the Warrant Shares specified in
the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder
is not then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), delivery to the
Company of a written notice of an election to effect a "Cashless Exercise" (as
defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder's designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares (or an election to effect a
Cashless Exercise has been made) as set forth above. Certificates for the
Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding two (2) business days, after this
Warrant shall have been so exercised. The certificates so delivered shall be in
such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be designated
by such holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.
2. Notwithstanding anything in this Warrant to the contrary, in no event
shall the Holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including shares of Series E Preferred Stock (as
defined in the Securities Purchase Agreement)) subject to a limitation on
conversion or exercise analogous to the limitation contained herein) and (ii)
the number of shares of Common Stock issuable upon exercise of the Warrants (or
portions thereof) with respect to which the determination described herein is
being made, would result in beneficial ownership by the Holder and its
affiliates of more than 4.9% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13D-G thereunder, except as otherwise provided
in clause (i) hereof. Notwithstanding anything in this Warrant to the contrary,
the restrictions on exercise of this Warrant set forth in this paragraph shall
not be amended without
(i) the written consent of the Holder and the Company and (ii) the approval of
the holders of a majority of the Common Stock present, or represented by proxy,
and voting at any meeting called to vote on the amendment of such restriction.
3. Period of Exercise. This Warrant is exercisable at any time or from time
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to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement (the "Issue Date")
and before 5:00 p.m., New York City time on the fourth (4th) anniversary of the
Issue Date (the "Exercise Period").
4. Certain Agreements of the Company. The Company hereby covenants and
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agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in
-----------------------
accordance with the terms of this Warrant, be validly issued, fully paid,
and nonassessable and free from all taxes, liens, and charges with respect
to the issue thereof.
(b) Reservation of Shares. During the Exercise Period, the Company shall at
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all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(c) Listing. The Company shall promptly secure the listing of the shares of
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Common Stock issuable upon exercise of the Warrant upon each national
securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of
issuance upon exercise of this Warrant) and shall maintain, so long as any
other shares of Common Stock shall be so listed, such listing of all
shares of Common Stock from time to time issuable upon the exercise of
this Warrant; and the Company shall so list on each national securities
exchange or automated quotation system, as the case may be, and shall
maintain such listing of, any other shares of capital stock of the Company
issuable upon the exercise of this Warrant if and so long as any shares of
the same class shall be listed on such national securities exchange or
automated quotation system.
(d) Certain Actions Prohibited. The Company will not, by amendment of its
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charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed by it hereunder, but will at all times
in good faith assist in the carrying out of all the provisions of this
Warrant and in the taking of all such action as may reasonably be
requested by the holder of this Warrant in order to protect the exercise
privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. Without
limiting the generality of the foregoing, the Company (i) will not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.
Notwithstanding anything to the contrary contained herein, the limitation
on exercise of this Warrant set forth in this paragraph may not be amended
without (i) the written consent of the holder hereof and the Company and
(ii) the approval of the holders of a majority of the Company's Common
Stock present, or represented by proxy, and voting at any meeting called
to vote on the amendment of such restriction.
(e) Successors and Assigns. This Warrant will be binding upon any entity
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succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.
Antidilution Provisions. During the Exercise Period, the Exercise Price
-----------------------
and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.
In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to
the nearest cent.
(f) Adjustment of Exercise Price and Number of Shares upon Issuance of Common
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Stock. Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if
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and whenever on or after the Issue Date of this Warrant, the Company issues
or sells, or in accordance with Paragraph 4(b) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses or
commissions or underwriting discounts or allowances in connection
therewith) less than the greater of (1) the Market Price (as hereinafter
defined) and (2) then effective Exercise Price on the date of issuance (or
deemed issuance) of such Common Stock (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance, the Exercise Price will be reduced
to a price determined by multiplying the Exercise Price in effect
immediately prior to the Dilutive Issuance by a fraction, (i) the numerator
of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually outstanding immediately prior to the Dilutive
Issuance, plus (y) the quotient of the aggregate consideration, calculated
as set forth in Paragraph 4(b) hereof, received by the Company upon such
Dilutive Issuance divided by the greater of (1) the Market Price and (2)
the Exercise Price in effect immediately prior to the Dilutive Issuance,
and (ii) the denominator of which is the total number of shares of Common
Stock Deemed Outstanding (as defined below) immediately after the Dilutive
Issuance.
(g) Effect on Exercise Price of Certain Events. For purposes of determining
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the adjusted Exercise Price under Paragraph 4(a) hereof, the following will
be applicable:
(i) Issuance of Rights or Options. If the Company in any manner issues or
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grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the
price per share for which Common Stock is issuable upon the exercise of
such Options is less than the greater of (1) the Market Price and (2) the
Exercise Price on the date of issuance or grant of such Options, then the
maximum total number of shares of Common Stock issuable upon the exercise
of all such Options will, as of the date of the issuance or grant of such
Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding
sentence, the "price per share for which Common Stock is issuable upon the
exercise of such Options" is determined by dividing (i) the total amount,
if any, received or receivable by the Company as consideration for the
issuance or granting of all such Options, plus the minimum aggregate amount
of additional consideration, if any, payable to the Company upon the
exercise of all such Options, plus, in the case of Convertible Securities
issuable upon the exercise of such Options, the minimum
aggregate amount of additional consideration payable upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment
to the Exercise Price will be made upon the actual issuance of such Common
Stock upon the exercise of such Options or upon the conversion or exchange
of Convertible Securities issuable upon exercise of such Options.
(i) Issuance of Convertible Securities. If the Company in any manner issues or
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sells any Convertible Securities, whether or not immediately convertible
(other than where the same are issuable upon the exercise of Options) and
the price per share for which Common Stock is issuable upon such conversion
or exchange is less than the greater of (1) the Market Price and (2) the
Exercise Price on the date of issuance of such Convertible Securities, then
the maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities will, as of the
date of the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such price
per share. For the purposes of the preceding sentence, the "price per
share for which Common Stock is issuable upon such conversion or exchange"
is determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or sale of all
such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof at the time such Convertible Securities
first become convertible or exchangeable, by (ii) the maximum total number
of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment to the Exercise Price
will be made upon the actual issuance of such Common Stock upon conversion
or exchange of such Convertible Securities.
(i) Change in Option Price or Conversion Rate. If there is a change at any
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time in (i) the amount of additional consideration payable to the Company
upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common
Stock (other than under or by reason of provisions designed to protect
against dilution), the Exercise Price in effect at the time of such change
will be readjusted 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 additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold.
(i) Treatment of Expired Options and Unexercised Convertible Securities. If,
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in any case, the total number of shares of Common Stock issuable upon
exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option
or to convert or exchange such
Convertible Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which would have
been in effect at the time of such expiration or termination had such
Option or Convertible Securities, to the extent outstanding immediately
prior to such expiration or termination (other than in respect of the
actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.
(i) Calculation of Consideration Received. If any Common Stock, Options or
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Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable
expenses paid or incurred by the Company in connection with such issuance,
grant or sale. In case any Common Stock, Options or Convertible Securities
are issued or sold for a consideration part or all of which shall be other
than cash, the amount of the consideration other than cash received by the
Company will 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 will be the Market Price thereof as
of the date of receipt. In case any Common Stock, Options or Convertible
Securities are issued in connection with any acquisition, merger or
consolidation in which the Company is the surviving corporation, the amount
of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as
is attributable to such Common Stock, Options or Convertible Securities, as
the case may be. The fair value of any consideration other than cash or
securities will be determined in good faith by the Board of Directors of
the Company.
(i) Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise
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Price will be made (i) upon the exercise of any warrants, options or
convertible securities granted, issued and outstanding on the date of
issuance of this Warrant; (ii) upon the grant or exercise of any stock or
options which may hereafter be granted or exercised under any employee
benefit plan of the Company now existing or to be implemented in the
future, so long as the issuance of such stock or options is approved by a
majority of the independent members of the Board of Directors of the
Company or a majority of the members of a committee of independent
directors established for such purpose; or (iii) upon the exercise of the
Warrants.
(a) Subdivision or Combination of Common Stock. If the Company at any time
------------------------------------------
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date
of record for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced. If
the Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares,
then, after the date of record for effecting such combination, the Exercise
Price in effect immediately prior to such combination will be
proportionately increased.
(b) Adjustment in Number of Shares. Upon each adjustment of the Exercise Price
------------------------------
pursuant to the provisions of this Paragraph 4, the number of shares of
Common Stock issuable upon exercise of this Warrant shall be adjusted by
multiplying a number equal to the Exercise Price in effect immediately
prior to such adjustment by the number of shares of Common Stock issuable
upon exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
(c) Consolidation, Merger or Sale. In case of any consolidation of the Company
-----------------------------
with, or merger of the Company into any other corporation, or in case of
any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company, then as a condition of such consolidation, merger or sale or
conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this
Warrant in lieu of the shares of Common Stock immediately theretofore
acquirable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such
consolidation, merger or sale or conveyance not taken place. In any such
case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities
thereafter deliverable upon the exercise of this Warrant. The Company will
not effect any consolidation, merger or sale or conveyance unless prior to
the consummation thereof, the successor or acquiring entity (if other than
the Company) and, if an entity different from the successor or acquiring
entity, the entity whose capital stock or assets the holders of the Common
Stock of the Company are entitled to receive as a result of such
consolidation, merger or sale or conveyance assumes by written instrument
the obligations under this Paragraph 4 and the obligations to deliver to
the holder of this Warrant such shares of stock, securities or assets as,
in accordance with the foregoing provisions, the holder may be entitled to
acquire.
(d) Distribution of Assets. In case the Company shall declare or make any
----------------------
distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise,
then, after the date of record for determining stockholders entitled to
such distribution, but prior to the date of distribution, the holder of
this Warrant shall be entitled upon exercise of this Warrant for the
purchase of any or all of the shares of Common Stock subject hereto, to
receive the amount of such assets which would have been payable to the
holder had such holder been the holder of such shares of Common Stock on
the record date for the determination of stockholders entitled to such
distribution.
(e) Notice of Adjustment. Upon the occurrence of any event which requires any
--------------------
adjustment of the Exercise Price, then, and in each such case, the Company
shall give notice thereof to the holder of this Warrant, which notice shall
state the Exercise Price resulting from such adjustment and the increase or
decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based. Such calculation shall be
certified by the chief financial officer of the Company.
(f) Minimum Adjustment of Exercise Price. No adjustment of the Exercise Price
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shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(g) No Fractional Shares. No fractional shares of Common Stock are to be
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issued upon the exercise of this Warrant. If the exercise of this Warrant
would result in a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares of Common Stock issuable upon
exercise of the Warrant shall be the next higher number of shares.
(h) Other Notices. In case at any time:
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(i) the Company shall declare any dividend upon the Common Stock payable in
shares of stock of any class or make any other distribution (including
dividends or distributions payable in cash out of retained earnings) to the
holders of the Common Stock;
(i) the Company shall offer for subscription pro rata to the holders of the
Common Stock any additional shares of stock of any class or other rights;
(i) there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or
(i) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the
date on which the holders of Common Stock shall be entitled to receive such
dividend, distribution, or subscription rights or to exchange their Common Stock
for stock or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall
not affect the validity of the proceedings referred to in clauses (i), (ii),
(iii) and (iv) above.
(a) Certain Events. If any event occurs of the type contemplated by the
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adjustment provisions of this Paragraph 4 but not expressly provided for by
such provisions, the Company
will give notice of such event as provided in Paragraph 4(g) hereof, and
the Company's Board of Directors will make an appropriate adjustment in the
Exercise Price and the number of shares of Common Stock acquirable upon
exercise of this Warrant so that the rights of the Holder shall be neither
enhanced nor diminished by such event.
(b) Certain Definitions.
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(i) "Common Stock Deemed Outstanding" shall mean the number of shares of Common
-------------------------------
Stock actually outstanding (not including shares of Common Stock held in
the treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i)
hereof, the maximum total number of shares of Common Stock issuable upon
the exercise of Options, as of the date of such issuance or grant of such
Options, if any, and (y) pursuant to Paragraph 4(b)(ii) hereof, the maximum
total number of shares of Common Stock issuable upon conversion or exchange
of Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.
(i) "Market Price," as of any date, (i) means the average of the last reported
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sale prices for the shares of Common Stock on the AMEX for the five (5)
trading days immediately preceding such date as reported by Bloomberg
Financial Markets or an equivalent reliable reporting service mutually
acceptable to and hereafter designated by the holder of this Warrant and
the Company ("Bloomberg"), or (ii) if the AMEX is not the principal trading
market for the shares of Common Stock, the average of the last reported
sale prices on the principal trading market for the Common Stock during the
same period as reported by Bloomberg, or (iii) if market value cannot be
calculated as of such date on any of the foregoing bases, the Market Price
shall be the fair market value as reasonably determined in good faith by
(a) the Board of Directors of the Corporation or, at the option of a
majority-in-interest of the holders of the outstanding Warrants by (b) an
independent investment bank of nationally recognized standing in the
valuation of businesses similar to the business of the corporation. The
manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in
respect of which a determination as to market value must be made hereunder.
(i) "Common Stock," for purposes of this Paragraph 4, includes the Common
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Stock, par value $.001 per share, and any additional class of stock of the
Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant
shall include only shares of Common Stock, par value $.001 per share, in
respect of which this Warrant is exercisable, or shares resulting from any
subdivision or combination of such Common Stock, or in the case of any
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Paragraph 4(e) hereof, the stock or other
securities or property provided for in such Paragraph.
1. Issue Tax. The issuance of certificates for Warrant Shares upon the
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exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than the holder of this
Warrant.
2. No Rights or Liabilities as a Shareholder. This Warrant shall not
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entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
3. Transfer, Exchange, and Replacement of Warrant.
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(a) Restriction on Transfer. This Warrant and the rights granted to the holder
-----------------------
hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph
7(e) below, provided, however, that any transfer or assignment shall be
subject to the conditions set forth in Paragraph 7(f) hereof and to the
applicable provisions of the Securities Purchase Agreement. Until due
presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder
hereof for all purposes, and the Company shall not be affected by any
notice to the contrary. Notwithstanding anything to the contrary contained
herein, the registration rights described in Paragraph 8 are assignable
only in accordance with the provisions of that certain Registration Rights
Agreement, dated as of October 11, 2000, by and among the Company and the
other signatories thereto (the "Registration Rights Agreement").
(b) Warrant Exchangeable for Different Denominations. This Warrant is
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exchangeable, upon the surrender hereof by the holder hereof at the office
or agency of the Company referred to in Paragraph 7(e) below, for new
Warrants of like tenor representing in the aggregate the right to purchase
the number of shares of Common Stock which may be purchased hereunder, each
of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the holder hereof at the time of such
surrender.
(c) Replacement of Warrant. Upon receipt of evidence reasonably satisfactory
----------------------
to the Company of the loss, theft, destruction, or mutilation of this
Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and
amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense,
will execute and deliver, in lieu thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender of this Warrant in
---------------------------------
connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by the Holder
or transferees) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Paragraph 7.
(e) Register. The Company shall maintain, at its principal executive offices
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(or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the
Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee
and each prior owner of this Warrant.
(f) Exercise or Transfer Without Registration. If, at the time of the
-----------------------------------------
surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise,
the Warrant Shares issuable hereunder), shall not be registered under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such exercise, transfer, or
exchange, (i) that the holder or transferee of this Warrant, as the case
may be, furnish to the Company a written opinion of counsel, which opinion
and counsel are acceptable to the Company, to the effect that such
exercise, transfer, or exchange may be made without registration under said
Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act; provided that no such opinion, letter
or status as an "accredited investor" shall be required in connection with
a transfer pursuant to Rule 144 under the Securities Act. The first holder
of this Warrant, by taking and holding the same, represents to the Company
that such holder is acquiring this Warrant for investment and not with a
view to the distribution thereof.
4. Registration Rights. The initial holder of this Warrant (and certain
-------------------
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.
5. Notices. All notices, requests, and other communications required or
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permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 00000 Xxxxxxx Xxxx.,
Xxxxx 000, Xxx Xxxxxxx, Xxxxx 00000, Attention: H. Xxxxxxx Xxxxxxxx, Chief
Financial Officer, or at such other address as shall have been furnished to the
holder of this Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.
6. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF DELAWARE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS). BOTH PARTIES IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE COURTS LOCATED IN
DELAWARE WITH RESPECT TO ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER THIS
AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-
APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.
7. Miscellaneous.
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(a) Amendments. This Warrant and any provision hereof may only be amended by
----------
an instrument in writing signed by the Company and the holder hereof.
(b) Descriptive Headings. The descriptive headings of the several paragraphs
--------------------
of this Warrant are inserted for purposes of reference only, and shall not
affect the meaning or construction of any of the provisions hereof.
(a) Cashless Exercise. Notwithstanding anything to the contrary contained in
-----------------
this Warrant, if the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under the
Securities Act, this Warrant may be exercised by presentation and surrender
of this Warrant to the Company at its principal executive offices with a
written notice of the holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be
issued upon such exercise in accordance with the terms hereof (a "Cashless
Exercise"). In the event of a Cashless Exercise, in lieu of paying the
Exercise Price in cash, the holder shall surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number of
Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market
Price per share of the Common Stock and the Exercise Price, and the
denominator of which shall be the then current Market Price per share of
Common Stock.
(b) Remedies. The Company acknowledges that a breach by it of its obligations
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hereunder will cause irreparable harm to the holder of this Warrant by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach
of its obligations under this Warrant will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of
this Warrant, that the holder of this Warrant shall be entitled, in
addition to all other available remedies in law or in equity, to an
injunction or injunctions to prevent or cure any breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions of
this Warrant, without the necessity of showing economic loss and without
any bond or other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
AMERICAN TELESOURCE INTERNATIONAL, INC.
By: /c/ H. Xxxxxxx Xxxxxxxx
-----------------------
H. Xxxxxxx Xxxxxxxx
Senior Vice President and Chief Financial Officer
Dated as of October 11, 2000
FORM OF EXERCISE AGREEMENT
Dated: ________ __, 200_
To: AMERICAN TELESOURCE INTERNATIONAL, INC.
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:
Name:
Signature:_________________
Address:___________________
___________________________
___________________________
Note: The above signature should correspond exactly with the name on the face
of the within Warrant.
and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:
Name of Assignee Address No of Shares
------------------------------- ------------------------------- -------------------------------
, and hereby irrevocably constitutes and appoints ______________
________________________ as agent and attorney-in-fact to transfer said Warrant
on the books of the within-named corporation, with full power of substitution in
the premises.
Dated: ________ __, 200_
In the presence of:
_________________________
Name:__________________
Signature:_______________
Title of Signing Officer or Agent (if any):
Address:______________
______________________
______________________
Note: The above signature should correspond exactly with the name on the face
of the within Warrant.