Warrant to Purchase
WE-1 **________**
Shares of Common Stock
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SHARES UNDER SAID ACT OR ANY
APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO ADSOUTH PARTNERS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
Void after 5:30 P.M. New York City time on May 15, 2010
SERIES B COMMON STOCK PURCHASE WARRANT
OF
ADSOUTH PARTNERS, INC.
This is to certify that, FOR VALUE RECEIVED, ___________________ or
registered assigns ("Holder"), is entitled to purchase, on the terms and subject
to the provisions of this Warrant, from Adsouth Partners, Inc., a Nevada
corporation (the "Company"), _____________________ (_______) shares of the
common stock, par value $.0001 per share ("Common Stock"), of the Company at an
exercise price per share (the "Exercise Price") of one and 275/1000 dollars
($1.275), at any time during the period (the "Exercise Period") commencing on
the date of this Warrant and ending at 5:30 P.M. New York City time, on May 15,
2010; provided, however, that if such date is a day on which banking
institutions in the State of Florida are authorized by law to close, then on the
next succeeding day on which such banks are not authorized to be closed.
Reference to the Warrants shall mean all of the Series B Common Stock Purchase
Warrants issued by the Company and any Warrants issued as a result of the
transfer or partial exercise of any of such Warrants pursuant to subscription
agreements (the "Subscription Agreements" and each, individually a "Subscription
Agreement") dated on or about the initial date of this Warrant between the
Company and the initial holders of the Warrants.
1. Exercise of Warrant.
(a) This Warrant may be exercised in whole at any time or in part from
time to time during the Exercise Period by presentation and surrender of this
Warrant to the Company at its principal office, or at the office of its stock
transfer agent, if any, with the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price for the number of shares of Common
Stock specified in such form. Payment of the Exercise Price shall be made by
wire transfer or check (subject to collection) in the amount of the Exercise
Price payable to the order of the Company. If this Warrant should be exercised
in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the rights of the
Holder to purchase the balance of the shares of Common Stock purchasable
hereunder. Upon receipt by the Company of this Warrant at its office, or by the
stock transfer agent of the Company at its office, in proper form for exercise,
the Holder shall be deemed to be the holder of record of the shares of Common
Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the Holder. The
shares of Common Stock issued or issuable upon exercise of this Warrant are
referred to as the "Warrant Shares."
(b) If the Registration Statement, as defined in the Subscription
Agreement, shall not have been declared effective by the Securities and Exchange
Commission (the "Commission") by the Effective Date, as defined in the
Subscription Agreement, then until a registration statement covering the Warrant
Shares shall have become effective, in lieu of exercising this Warrant by
payment of the Exercise Price pursuant to Section 1(a) of this Warrant, the
Holder shall have the right to convert this Warrant, in whole or in part to the
extent that this Warrant has not been exercised pursuant to said Section 1(a),
for the number of shares of Common Stock determined by (i) multiplying (x) the
number of shares as to which this Warrant is being exercised by (y) the
difference between the current value per share of Common Stock on the date of
exercise and the Exercise Price per share, as in effect on such date, and (ii)
dividing the result so obtained by the current value per share of Common Stock
on the date of exercise. The date of exercise shall mean, for purposes of this
Section 1, the date on which this Warrant accompanied by the notice of exercise
is received by the Company; provided, however, that if this Warrant is exercised
or converted and delivery of this Warrant is made by an overnight courier or
overnight mail service which provides evidence of delivery, the date of exercise
shall mean the date that this Warrant, accompanied by the notice of exercise, is
delivered to the overnight courier or overnight mail service. The current value
per share of Common Stock shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange or listed
for trading on the Nasdaq Stock Market ("Nasdaq") or other automated quotation
system which provides information as to the last sale price or is traded on the
OTC Bulletin Board or another market which provides information as to the last
sale price, the current value shall be the average of the reported last sale
prices of one share of Common Stock on such exchange, market or system on the
trading date immediately preceding the date of exercise of this Warrant, or if,
on any such date, no such sale is made on such day, the closing bid price for
the Common Stock such date on such exchange, market or system shall be used;
provided, however, that if this Warrant is exercised during a trading day, the
Holder of this Warrant and the Company may, by mutual agreement, treat the
current price as the last reported sales price at or about the time of
conversion; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current value shall be the mean average of the reported
last bid and asked prices of one share of Common Stock as reported by Nasdaq,
the OTC Bulletin Board, the Pink Sheet, LLP, the National Quotation Bureau, Inc.
or other similar reporting service, on the date of the exercise of this Warrant.
2. Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise or conversion
of this Warrant such number of shares of Common Stock as shall be required for
issuance and delivery upon exercise of this Warrant and that it shall not,
without the prior approval of the holders of a majority of the Warrants then
outstanding, increase the par value of the Common Stock.
3. Fractional Shares. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. If, upon
any full exercise of this Warrant, the holder would, except for the provisions
of this Section 3, be entitled to receive a fractional share of Common Stock,
then the fractional share will be rounded up by the issuance of such additional
fraction of a share as is necessary to increase the fractional share to a full
share of Common Stock.
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4. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. Subject to the provisions of Section 12 of this
Warrant, upon surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant" as used herein
includes any Warrants into which this Warrant may be divided or exchanged. Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Warrant, if mutilated, the Company will execute and deliver
a new Warrant of like tenor. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
5. Rights of the Holder. The Holder shall not, by virtue of this
Warrant, be entitled to any rights of a stockholder in the Company, either at
law or equity, and the rights of the Holder are limited to those expressed in
the Warrant and are not enforceable against the Company except to the extent set
forth in this Warrant.
6. Adjustment to the Exercise Price. In addition to adjustments in the
Exercise Price made pursuant to Section 13(b) of the Subscription Agreement, if
the Company shall, subsequent to May 15, 2005, (A) pay a dividend or make a
distribution on its shares of Common Stock in shares of Common Stock, (B)
subdivide or reclassify its outstanding Common Stock into a greater number of
shares or otherwise effect a stock split or stock distribution, or (C) combine
or reclassify its outstanding Common Stock into a smaller number of shares or
otherwise effect a reverse split, the Exercise Price in effect at the time of
the record date for such dividend or distribution or of the effective date of
such subdivision or other combination or reclassification shall be
proportionately adjusted upward or downward, as the case may be in accordance
with generally accepted accounting principles and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted. Such adjustment
shall be made successively whenever any event listed in this Section 6. The
Exercise Price and the number of shares issuable upon exercise of this Warrant
shall also be subject to adjustment in the manner and to the extent provided in
the Subscription Agreement.
7. Officer's Certificate. Whenever the Exercise Price shall be adjusted
as required by the provisions of Section 6 of this Warrant, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price and the adjusted number of
shares of Common Stock issuable upon exercise of each Warrant, determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder, and the Company shall, forthwith
after each such
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adjustment, mail, by first class mail, a copy of such certificate to the Holder
at the Holder's address set forth in the Company's Warrant Register.
8. Notices to Warrant Holders. So long as this Warrant shall be
outstanding, (a) if the Company shall pay any dividend or make any distribution
upon Common Stock (other than a regular cash dividend payable out of retained
earnings) or (b) if the Company shall offer to the holders of Common Stock for
subscription or purchase by them any share of any class or any other rights or
(c) if any capital reorganization of the Company, reclassification of the
capital stock of the Company, consolidation or merger of the Company with or
into another corporation, sale, lease or transfer of all or substantially all of
the property and assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then in any such case, the Company shall cause to be mailed by
certified mail, return receipt requested, to the Holder, at least fifteen days
prior to the date specified in clauses (i) and (ii), as the case may be, of this
Section 8. a notice containing a brief description of the proposed action and
stating the date on which (x) a record is to be taken for the purpose of such
dividend, distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, lease, dissolution, liquidation or winding up
is to take place and the date, if any is to be fixed, as of which the holders of
Common Stock or other securities shall receive cash or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.
9. Reclassification, Reorganization or Merger.
(a) In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock of the Company, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant, to purchase
the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, capital reorganization and other change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock which might have been purchased upon exercise of this Warrant
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance. Any such provision shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing provisions of this Section 9(a) shall
similarly apply to successive reclassifications, capital reorganizations and
changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances.
(b) Notwithstanding the provisions of Section 9(a) of this Warrant, in
the event of a Specified Merger, as hereinafter defined, this Warrant, if not
exercised prior to the effective time of the Specified Merger, shall, at the
effective time of the Specified Merger, without any action on the part of the
holder, become and be converted into the right to receive cash or securities
having a value equal to the amount determined by multiplying the number of
shares of Common Stock issuable upon exercise of this Warrant by the amount by
which (i) the consideration payable with respect to one share of Common Stock in
the Specified Merger exceeds (ii) the Exercise Price. A Specified Merger shall
mean the merger or consolidation of the Company into another corporation or
entity or the sale by the Company of all or substantially all of its business
and assets in a transaction in which the net proceeds or other
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consideration from such sale are distributed to the Company's stockholders in
liquidation of their shares of Common Stock, if, and only if, the sole
consideration to be received by the holders of the Common Stock is cash,
including any contingent cash, and/or securities all of which are listed on the
New York or American Stock Exchange or the Nasdaq Stock Market. Securities
issued in the Specified Merger shall be valued at the average closing price
thereof on the principal stock exchange or market on which the securities are
listed for the five-day period ending the day prior to the effective date of the
Specified Merger. Payment to the holder of this Warrant with respect to any such
securities shall be payable in either cash or in such securities (valued as
herein provided), as the Company shall determine. If, in a Specified Merger, the
value of the consideration payable with respect to one share of Common Stock is
less than the Exercise Price, no payment shall be made to the holder of this
Warrant, and this Warrant shall terminate.
10. Limitation of Right to Exercise Warrant. Notwithstanding anything
contained in this Warrant to the contrary, this Warrant may not be exercised or
converted in whole or in part into a number of shares of Common Stock that would
result in the Holder being deemed to be the beneficial owner of more than 9.99%
of the Company's outstanding Common Stock. Beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13d-3 of the Commission thereunder. The Holder
may allocate which of the equity of the Company deemed beneficially owned by the
Holder shall be included in the 9.99% amount described above and which shall be
allocated to the excess above 9.99%.
11. Registration under the Securities Act of 1933. The Holder of the
Warrants shall have the registration right with respect to the Warrants as set
forth in Section 11 of the Subscription Agreement.
12. Transfer to Comply with the Securities Act. This Warrant or the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may not be sold or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel for the Company, is a
person to whom this Warrant or Warrant Shares may legally be transferred without
registration and without the delivery of a current prospectus under the
Securities Act and in compliance with applicable state securities laws with
respect thereto and then only against receipt of an agreement of such person to
comply with the provisions of this Section 12 with respect to any resale or
other disposition of such securities which agreement shall be satisfactory in
form and substance to the Company and its counsel; or
(b) To any person upon delivery of a prospectus then meeting the
requirements of the Securities Act and state securities laws relating to such
securities and the offering thereof for such sale or disposition.
Dated as of May 16, 2005
ADSOUTH PARTNERS, INC.
By:______________________________
Name:
Title:
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PURCHASE FORM
Dated: , 20
The undersigned hereby irrevocably exercises this Warrant to the extent of
purchasing _______ shares of Common Stock and hereby makes payment of
$____________ in payment of the Exercise Price therefor.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:_______________________________________________________________________
(Please typewrite or print in block letters)
Signature:___________________________________________
Social Security or Employer Identification No.________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED,_______________________________________________________
hereby sells, assigns and transfer unto
Name_________________________________________________________________________
(Please typewrite or print in block letters)
Address________________________________________________________________________
Social Security or Employer Identification No._______________________
The right to purchase Common Stock represented by this Warrant to the extent of
_________shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint __________________ attorney to transfer the
same on the books of the Company with full power of substitution.
Dated: , 20
Signature_________________________________________
Signature Medallion Guaranteed:
__________________________________________________
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