Exhibit 10.2
This Warrant and the securities to be issued upon exercise hereof have not
been registered under the Securities' Act of 1933 (the "Securities Act"), or the
securities laws of any state. Neither this Warrant nor any, interest herein may
be offered, sold, transferred, pledged, hypothecated or otherwise disposed of
except as expressly provided for herein. Neither the securities issuable upon
exercise hereof nor any interest therein may be offered, sold, transferred,
pledged, hypothecated or otherwise disposed of except pursuant to (i) an
effective registration statement under the Securities Act and any applicable
state securities laws or (ii) an exemption from the registration requirements of
the Securities Act and any applicable state securities laws, such exemption to
be evidenced by such documentation as the Company may reasonably request.
TELEMONDE, INC.
WARRANT
Dated: August 25, 1999
No: 1
THIS IS TO CERTIFY THAT, for value received, Atlantic Crossing Ltd., a
Bermuda Company ("Holder"), pursuant to Section 2.2 hereof, is entitled to
purchase from Telemonde, Inc., a Nevada corporation (the "Company"), prior to
5:00 p.m., New York City time on the first anniversary of the date hereof (the
"Expiration Date"), at the offices of the Warrant Agent (as hereinafter
defined), up to one million one hundred thousand (1,100,000) shares of common
stock, $.001 par value per share (each a "Share" and collectively, the
"Shares"), of the Company at an exercise price of $5.25 per Share (subject to
adjustment pursuant to Article III, the "Exercise Price"), subject to adjustment
and upon the terms and conditions as hereinafter provided. Certain terms used
in this Warrant are defined in Article IV.
ARTICLE I
EXERCISE OF WARRANT
1.1 Method of Exercise. To exercise this Warrant in whole or in part, the
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Holder shall deliver to the Company, at the offices of the Warrant Agent, (a)
this Warrant, (b) a written notice, in substantially the form of the
Subscription Notice attached hereto as Exhibit A, of such Holder's election to
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exercise this Warrant, which notice shall specify the number of Shares to be
purchased (in lots of not less than 1,000 Shares), the denominations of the
Share certificate or certificates desired and the name or names in which such
certificates are to be registered and (c) payment of the Exercise Price with
respect to such Shares. Such payment shall be made in immediately available
funds or by certified check.
The Company shall as promptly as practicable and in any event within
five Business Days after receipt of the Subscription Notice, execute and deliver
or cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate
number of Shares to which the Holder is entitled. The Share certificate or
certificates so delivered shall be in such denominations as may be specified in
such notice or, if such notice shall not specify denominations, in denominations
of 1,000 Shares each, and shall be issued in the name of the Holder or such
other name or names as shall be designated in such notice. Such certificate or
certificates shall be deemed to have been issued, and the Holder or any other
person so designated to be named therein shall be deemed for all purposes to
have become holders of record of such Shares, as of the date the aforementioned
notice is received by the Company. If this Warrant shall have been exercised
only in part, unless this Warrant shall have expired, the Company shall, at the
time of delivery of the certificate or certificates, deliver to the Holder a new
Warrant evidencing the rights to purchase the remaining Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with
this Warrant, or, at the request of the Holder, appropriate notation may be made
on this Warrant which shall then be returned to the Holder. The Company shall
pay all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of Share certificates and new Warrants,
except that, if Share certificates shall be registered in a name or names other
than the name of the Holder, funds sufficient to pay all transfer taxes payable
as a result of such transfer shall be paid by the Holder at the time of
delivering the aforementioned notice of exercise or promptly upon receipt of a
written request of the Company for payment. The Company shall not be required to
pay any tax or taxes that may be payable with respect to any transfer of this
Warrant.
1.2 Shares to be Fully Paid and Nonassessable; Reservation and Listing.
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All Shares issued upon the exercise of this Warrant shall be validly issued,
fully paid and nonassessable and the Company shall at all times reserve and keep
available out of its authorized Shares, solely for the purpose of issuance upon
the exercise of this Warrant, such number of Shares as shall be issuable upon
the exercise hereof. If the Shares are then listed on any national securities
exchange (as such term is used in the Exchange Act) or quoted on NASDAQ, the
Company shall cause the Shares issuable upon exercise of this Warrant to be duly
listed or quoted thereon, as the case may be.
1.3 No Fractional Shares to be Issued. The Company shall not be required
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to issue fractions of Shares upon exercise of this Warrant. If any fraction of
a Share would, but for this Section, be issuable upon any exercise of this
Warrant, in lieu of such factional Share the Company shall pay to the Holder in
cash, an amount equal to the same fraction of the Market Price per Share of
outstanding Shares at the close of business on the Business Day immediately
prior to the date of such exercise.
1.4 Share Legend. Each certificate for Shares issued upon exercise of
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this Warrant, unless at the time of exercise such Shares are registered under
the Securities Act, shall bear the following legend:
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This security has not been registered under the Securities Act of 1933
(the "Securities Act"), or the securities laws of any state and may
not be offered, sold, transferred, pledged, hypothecated or otherwise
disposed of except pursuant to (i) an effective registration statement
under the Securities Act and any applicable state securities laws or
(ii) an exemption from the registration requirements of the Securities
Act and any applicable state securities laws, such exemption to be
evidenced by such documentation as the issuer may reasonably request.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless the holder of such
certificate shall have delivered to the Company an opinion of counsel, in
writing and addressed to the Company (which counsel and opinion shall be
reasonably acceptable to the Company), that the securities represented thereby
need no longer be subject to restrictions on resale under the Securities Act or
any state securities laws.
ARTICLE II
WARRANT AGENT; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1 Warrant Agent. Until such time, if any, as an independent agent shall
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be appointed by the Company to perform services with respect to this Warrant
described herein (the "Warrant Agent"), the Company shall perform the
obligations of the Warrant Agent provided herein at its principal office address
or such other address in the United States as the Company shall specify by prior
written notice to the Holder.
2.2 No Transfer. Except as provided herein, the Holder of this Warrant,
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by its acceptance hereof, covenants and agrees that neither this Warrant nor any
interest herein may be sold, transferred, pledged or hypothecated, other than a
transfer to an Affiliate of the Holder. Neither the Shares issuable upon
exercise hereof nor any interest therein may be offered, sold, transferred,
pledged, hypothecated or otherwise disposed of, except pursuant to (i) an
effective registration statement under the Securities Act and any applicable
state securities laws or (ii) an exemption from the registration requirements of
the Securities Act and any applicable state securities laws, such exemption to
be evidenced by such documentation as the Company may reasonably request,
including an opinion of counsel, in writing and addressed to the Company (which
counsel and opinion shall be reasonably satisfactory to the Company), that such
transfer is not in violation of the Securities Act and any applicable state
laws. The Company shall treat the Holder as the holder and owner hereof for all
purposes (and shall not be affected by any notice to the contrary).
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2.3 Division or Combination of Warrants. This Warrant may be divided (in
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lots exercisable for not less than 1,000 Shares) or combined with other Warrants
upon surrender hereof. The Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.4 Loss, Theft, Destruction of Warrant Certificates. Upon receipt of
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evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company, at the Holder's expense, will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new warrant of like tenor
and representing the right to purchase the same aggregate number of Shares.
ARTICLE III
ADJUSTMENT PROVISIONS
3.1 Adjustments Generally. The Exercise Price and the number of Shares
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(or other securities or property) issuable upon exercise of this Warrant shall
be subject to adjustment from time to time upon the occurrence of certain
events, as provided in this Article III.
3.2 Stock Dividends; Stock Splits; Reverse Stock Splits;
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Reclassifications. In case the Company shall, at any time or from time to time
prior to the Issue Date, (a) declare a dividend or other distribution on its
Shares in shares of any class or series of capital stock, (b) subdivide its
outstanding Shares, (c) combine its outstanding Shares into a smaller number of
Shares or (d) issue any shares of its capital stock in a reclassification of the
Shares, the number of Shares purchasable upon exercise of this Warrant
immediately prior to the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
adjusted so that the Holder shall thereafter be entitled to receive for this
Warrant the kind and number of Shares that the Holder would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been fully exercised immediately prior to the happening
of such event or any record date with respect thereto. An adjustment made
pursuant to this Section 3.2 shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
3.3 Rights, Options and Warrants.
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(a) If the Company fixes a record date for the distribution of any
rights, options or warrants to all holders of its Shares entitling such holders
to subscribe for or purchase Shares (or Convertible Securities), whether or not
immediately exercisable, and the price per share at which Shares are issuable
upon exercise (such price to be determined by dividing (x) the total amount
receivable by the Company in consideration of the issuance of such rights,
options, warrants or Convertible Securities, if any, plus the total
consideration payable to the Company upon exercise, conversion or exchange
thereof, by (y) the total number of Shares covered by such rights, options,
warrants or Convertible Securities) is lower than the Market Price per Share at
the record date for such issuance, the number of Shares the Holder would be
entitled to subscribe for or purchase upon exercise of this Warrant immediately
prior to the record date shall be adjusted by multiplying the number of Shares
theretofore purchasable upon exercise of this Warrant by a fraction, the
numerator of which shall be the number of Shares outstanding immediately prior
to the issuance of such rights, options, warrants or Convertible Securities plus
the number of additional Shares offered for subscription or purchase or issuable
upon conversion or exchange, and the denominator of which shall be the number of
Shares outstanding immediately poor to the issuance of such rights, options
warrants or Convertible Securities plus the number of Shares which the aggregate
offering price of the total number of Shares so offered would purchase at such
Market Price. Such adjustment shall be made whenever such rights, options,
warrants or Convertible Securities are issued, and shall become effective on the
distribution date, retroactive to the record date for the determination of
shareholders entitled to receive such rights, options, warrants or Convertible
Securities.
(b) If rights, options or warrants distributed pursuant to Section
3.3(a) (i) are deemed to be transferred with the Shares, (ii) are not
exercisable and (iii) are also issued in respect of future issuances of Shares,
in each case until the occurrence of a specified event or events ("Trigger
Event"), such rights, options or warrants shall be deemed not to have been
distributed for purposes of this Article III (and no adjustments under this
Article III will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights, options and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) shall be made as
provided in this Article III.
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3.4 Expiration of Rights; Options and Conversion Privileges. Upon the
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expiration of any rights, options or warrants, the issuance of which caused an
adjustment pursuant to this Article III, if any thereof shall not have been
exercised, the Exercise Price and the number of Shares purchasable upon the
exercise of this Warrant shall, upon such expiration, be readjusted and shall
thereafter, upon any fixture exercise, be such as they would have been had they
been originally adjusted (or had the original adjustment not been required, as
the case may be) as if (a) the only Shares so issued were the Shares, if any,
actually issued or sold upon the exercise of such rights, options, warrants or
conversion or exchange rights and (b) such Shares, if any, were issued or sold
for the consideration actually received by the Company upon such exercise plus
the consideration, if any, actually received by the Company for issuance, sale
or grant of all such rights, options, warrants or conversion or exchange rights
whether or not exercised; provided, further, that no such readjustment shall
have the effect of increasing the Exercise Price by an amount, or decreasing the
number of shares purchasable upon exercise of this Warrant by a number, in
excess of the amount or number of the adjustment initially made in respect to
the issuance, sale or grant of such rights, options, warrants or conversion or
exchange rights.
3.5 Merger or Consolidation.
-----------------------
(a) Subject to the provisions of Section 3.5(b), in case of the
consolidation of the Company with, or merger of the Company with or into, or
often sale of all or substantially all of the properties and assets of the
Company to, any person, and in connection therewith consideration is payable to
holders of Shares (or other securities or property purchasable upon exercise of
this Warrant) in exchange therefor, this Warrant shall remain subject to the
terms and conditions set forth herein and this Warrant shall, after such
consolidation, merger or sale, entitle the Holder to receive upon exercise the
number of shares of capital stock or other securities or property (including
cash) of the Company, or of such Person resulting from such consolidation or
surviving such merger or to which such sale shall be made, as the case may be,
that would have been distributable or payable on account of the Shares (or other
securities or properties purchasable upon exercise of Warrants) if such Holder's
Warrants had been exercised immediately prior to such merger, consolidation or
sale (or, if applicable, the record date therefor), and in any such case the
provisions of this Warrant with respect to the rights and interests thereafter
of the Holder of this Warrant shall be appropriately adjusted by the Board of
Directors of the Company or the surviving entity in good faith so as to be
applicable, as nearly as may be reasonably be, to any shares of stock or other
securities or any property thereafter deliverable on the exercise of this
Warrant.
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(b) Notwithstanding the foregoing, (i) if the Company merges or
consolidates with or into, or sells all or substantially all of its property and
assets to, another person and consideration is payable to holders of Shares in
exchange for their Shares in connection with such merger, consolidation or sale
which consists solely of cash or (ii) in the event of the dissolution,
liquidation or winding up of the Company, then the Holder shall be entitled to
receive distributions on the date of such event on an equal basis with holders
of Shares (or other securities issuable upon exercise of this Warrant) as if
this Warrant had been exercised immediately prior to such event, less the
aggregate Exercise Price. Upon receipt of such payment, if any, the right of the
Holder shall terminate and cease and this Warrant shall expire.
3.6 Adjustment Rules.
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(a) Any adjustments pursuant to this Article III shall be made
successively whenever an event referred to herein shall occur.
(b) No adjustment shall be made pursuant to this Article III in
respect of the issuance from time to time of Shares solely as a result of the
exercise of this Warrant.
(c) If the Company shall set a record date to determine the holders of
Shares for purposes of an action specified in this Article III and shall abandon
such action prior to effecting such action, then no adjustment shall be made
pursuant to this Article III in respect of such action.
(d) If the aggregate number of Shares issuable upon the exercise of
this Warrant shall be adjusted pursuant to this Article III, the Exercise Price
per Share shall be appropriately adjusted.
(e) If the occurrence of one event with respect to the Company could
result in two or more adjustments pursuant to this Article III, then the Board
of Directors of the Company shall, in its sole discretion, determine which such
adjustment shall result from such event.
3.7 Notice of Adjustment. As promptly as practicable after any action is
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taken (or sooner, if the Company determines to take any action) which requires
an adjustment or readjustment pursuant to this Article III, the Company shall
give notice to the Holder of such event, and, if determinable, the required
adjustment and the computation thereof. If the required adjustment is not
determinable at
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the time of such notice, the Company shall give notice to the Holder of such
adjustment and computation promptly after such adjustment becomes determinable.
ARTICLE IV
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"Affiliate" means, with respect to any Person, any entity which
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directly or indirectly controls, is controlled by, or is under common control
with, such Person or any subsidiary of such Person or any Person who is a
director, officer or partner of such Person or any subsidiary of such Person.
For purposes of this definition, "control" means the possession, directly or
indirectly, of the power to (a) vote fifty percent (50%) or more of the
securities having ordinary voting power for the election of directors of such
Person, or (b) direct or cause the direction of management and policies of a
business, whether through the ownership of voting securities, by contract or
otherwise.
"Business Day" means each day in which banking institutions in New
------------
York are not required or authorized by law or executive order to close.
"Company" shall have the meaning set forth in the first paragraph of
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this Warrant.
"Convertible Securities" means any securities which are convertible
----------------------
into or exercisable or exchangeable for Shares (whether or not immediately
exercisable, convertible or exchangeable).
"Exchange Act" means the Securities Exchange Act of 1934.
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"Exercise Price" shall have the meaning set forth in the first
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paragraph of this Warrant.
"Expiration Date" shall have the meaning set forth in the first
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paragraph of this Warrant.
"Holder" shall have the meaning set forth in the first paragraph of
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this Warrant.
"Issue Date" means the Business Day on which the Holder exercises its
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rights under this Agreement to subscribe for the Shares.
8
"Market Price" means, with respect to Shares, the average of the daily
------------
closing prices for the Shares on the ten consecutive trading days before the day
in question. The closing price for each day shall be the last reported sales
price regular way or, in case no such reported sale takes place on such date,
the average of the reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange ("NYSE"), or if the Shares are not listed or
admitted to trading on the NYSE, on the principal securities exchange on which
the Shares are listed or admitted to trading or NASDAQ or, if not listed or
admitted to trading on any securities exchange or NASDAQ, the closing sale price
of the Shares, or in case no reported sale takes place, the average of the
closing bid and asked prices, on any inter-dealer quotation system or any
comparable system, or if the Shares are not so quoted, the parties hereto agree
for the purposes of this Warrant that the current Market Price shall be as
determined in good faith by the Board of Directors of the Company.
"NASDAQ" means The NASDAQ Stock Market.
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"Person" shall mean an individual, corporation, partnership,
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association, trust or unincorporated organization,
"Securities Act" means The Securities Act of 1933.
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"Shares" shall have the meaning set form in the first paragraph of
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this Warrant.
"Warrant Agent" shall have the meaning set forth in Section 2.1.
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ARTICLE V
MISCELLANEOUS
5.1 Expiration. This Warrant shall expire and be of no further force and
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effect on the Expiration Date.
5.2 Notices. All notices, consents, waivers, and other communications
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under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in
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each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):
In the case of the Holder:
Atlantic Crossing Ltd.
Xxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Facsimile No.: (000) 000 0000
Attention: General Counsel
In the case of the Company:
Telemonde, Inc.
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000 0000
copy to: X. Xxxxxx Xxxxxx, Jr., Esquire
Baker, Donelson, Bearman & Xxxxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile No.: (000) 000-0000
5.3 Waivers; Amendments. No failure or delay of the Holder in exercising
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any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the Holder.
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5.4 GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
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GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF LAW
PRINCIPLES.
5.5 Survival of Agreements. All covenants and agreements made by the
----------------------
parties herein shall be considered to have been relied upon by each party and
shall survive the issuance and delivery of this Warrant, and shall continue in
full force and effect so long as this Warrant is outstanding.
5.6 Covenants to Bind Successor and Assigns. All covenants, stipulations,
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promises and agreements in this Warrant contained by or on behalf of the Company
shall bind its successors and assigns, whether so expressed or not.
5.7 Withholding. The Company shall be entitled to withhold any amounts
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required to be withheld under applicable law from any amounts to be paid to the
Holder hereunder.
5.8 Severability. In case any one or more of the provisions contained in
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this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
5.9 Section Headings. The section headings used herein are for
----------------
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
5.10 No Rights as Stockholder. This Warrant shall not entitle the Holder
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to any rights as a stockholder of the Company and no dividends shall be payable
or accrue in respect of this Warrant or the interest represented hereby or the
Shares underlying this Warrant exercisable hereunder unless and until and only
to the extent this Warrant shall be exercised.
5.11 No Requirement to Exercise. Nothing contained in this Warrant shall
--------------------------
be construed as requiring the Holder to exercise this Warrant.
5.12 Facsimiles. This Agreement may be executed by a facsimile signature,
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which shall have the same force and effect as a manually executed signature.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first above written.
TELEMONDE, INC.
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
Acknowledged and Agreed:
ATLANTIC CROSSING, LTD.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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Exhibit A
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SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To: Telemonde, Inc.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to purchase thereunder,
___________ Shares, as provided for therein, and tenders herewith payment of the
Exercise Price in immediately available funds.
Please issue a certificate or certificates for such Shares in the
following name or names and denominations:
If said number of Shares shall not be all the Shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such Shares less any fraction of a
Share paid in cash.
Dated:
[THE HOLDER]
By:
Name:
Title:
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