10.1 Class A Common Stock Purchase Warrant and Warrant Agreement
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT") OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED AT ANY TIME EXCEPT UPON
REGISTRATION OR UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR EVIDENCE
SATISFACTORY TO THE COMPANY THAT ANY SUCH TRANSFER WILL NOT VIOLATE THE ACT OR
THE SECURITIES LAWS OF ANY STATE."
[GRAPHIC OMITTED] EAGLE TELECOM INTERNATIONAL, INC.
CLASS A WARRANT CERTIFICATE
NO. NUMBER OF CLASS A WARRANTS
XXX XXX,XXX
VOID AFTER 5:00 p.m., HOUSTON TIME, AUGUST 31, 2000 (UNLESS EXTENDED)
WARRANT TO PURCHASE COMMON STOCK
This Warrant Certificate certifies that_____________________, or, subject
to certain restrictions on transfer described in the Warrant Agreement (as
hereinafter defined), registered assigns, is the registered holder of the number
indicated above of warrants ("Class A Warrants") to purchase shares of common
stock, $.001 par value ("Common Stock"), of Eagle Telecom International, Inc., a
Texas corporation ("Company"). Each Warrant entitles the holder thereof to
purchase from the Company, on or before 8/31/2000 (subject to extension by the
Company), one fully paid and nonassessable share of Common Stock, upon
presentation and surrender of this Warrant Certificate, with the Subscription
Form duly executed, at the corporate office of the Company (as defined below)
and upon proper payment of the Exercise Price. Subject to adjustment as provided
in the warrant agreement between the Company and the holder hereof ("Warrant
Agreement"), the exercise price ("Exercise Price") for each Warrant evidenced
hereby shall be $4.00 per share. Payment of the Exercise Price shall be made in
lawful money of the United States of America by cashier's check, certified
check, federal funds or clearing house check payable to the Company. This
Warrant may be redeemed by the Company as provided for in the Warrant Agreement.
As provided in the Warrant Agreement, the Exercise Price and the number of
shares of Common Stock purchasable upon the exercise of the Class A Warrants
are, upon the happening of certain events, subject to modification or
adjustment.
References to the Warrant Agent herein shall mean the Company, and any
successor or additional Warrant Agent designated as provided in the Warrant
Agreement.
This Warrant Certificate is subject to all of the terms, provisions, and
conditions of the Warrant Agreement, including the provisions of such Agreement
relating to the amendment thereof, which Warrant Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Warrant Agreement for a full description of the rights, limitations
of rights, obligations, duties, and immunities of the Company, and the holder of
this Warrant Certificate. Copies of the Warrant Agreement, as such may be
amended from time to time, are available for inspection at the offices of the
Company.
This Warrant Certificate, with or without other Warrant Certificates, upon
surrender to the Company or any successor or additional Warrant Agent, may be
exchanged for another Warrant Certificate or Warrant Certificates evidencing a
like aggregate number of Class A Warrants. If this Warrant Certificate shall be
exercised in part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Warrant Certificates evidencing the number
of Class A Warrants not exercised.
No holder of this Warrant Certificate shall be deemed to be the holder of
Common Stock or any other securities of the Company that may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained in
the Warrant Agreement or herein be construed to confer upon the holder of this
Warrant Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any reorganization, issuance of stock,
reclassification or conversion of stock, change of par value, or exchange of
stock to no par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise, until this Warrant Certificate shall have been exercised and the
Common Stock purchasable upon the exercise hereof shall have become issuable as
provided in the Warrant Agreement.
Every holder of this Warrant Certificate, by accepting the same, consents
and agrees with the Company and with every other holder of a Warrant Certificate
that:
(a) subject to the restrictions on transfer described in the Warrant
Agreement, this Warrant Certificate is transferable by the registered holder
hereof in person or by attorney duly authorized in writing, at the principal
corporate office of the Company, in whole or in part;
(b) anything herein to the contrary notwithstanding, in no event shall the
Company be obligated to issue Warrant Certificates evidencing other than a whole
number of Class A Warrants or issue certificates evidencing other than a whole
number of shares of Common Stock upon the exercise of this Warrant Certificate;
and
(c) the Company may deem and treat the person in whose name this Warrant
Certificate is registered as the absolute, true, and lawful owner hereof for all
purposes whatsoever, and the Company shall not be affected by any notice to the
contrary.
WITNESS the signatures of the proper officers of the Company.
Date: ___________________________ EAGLE TELECOM INTERNATIONAL, INC.
BY_______________________________
H. XXXX XXXXXX, Chief Executive Officer
Attest: ___________________
Secretary
Countersigned: __________________________________
(Address)
FORM OF SUBSCRIPTION
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
To Eagle Telecom International, Inc.:
The undersigned, the holder of the enclosed Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ____________ shares of Common Stock of Eagle Telecom
International, Inc. and herewith makes payment of $____________ therefor, and
requests that the certificate or certificates for such shares be issued in the
name of and delivered to the undersigned.
Dated: _______________
______________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the enclosed Warrant)
______________________________________
(Address)
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY UPON ASSIGNMENT OF WARRANT)
For value received and subject to the restrictions on transfer described
in the Warrant Agreement under which this Warrant was issued, _______________
hereby sells, assigns, and transfers unto _________________ Class A Warrants
represented by the within Warrant Certificate, together with all right, title,
and interest therein, and does hereby irrevocably constitute and appoint
______________________attorney, to transfer such Class A Warrants of the books
of the within named corporation, with full power of substitution.
Dated ____________________
______________________________
Signature of Warrant Holder
______________________________
Printed Name of Warrant Holder
Note: the above signature must correspond with the name as written upon the face
of this Warrant in every particular, without any change whatsoever.
TRANSFER FEE: $7.50 PER CERTIFICATE
EAGLE TELECOM INTERNATIONAL, INC.
WARRANT AGREEMENT
FOR CLASS A COMMON STOCK PURCHASE WARRANTS
DATED AS OF AUGUST 5, 1997
TABLE OF CONTENTS
Page
PARTIES...................................................................... 1
RECITALS..................................................................... 1
ARTICLE I ISSUANCE AND EXECUTION OF CLASS A WARRANTS
1.01 Appointment of Warrant Agent......................... 1
1.02 Form of Warrant...................................... 1
ARTICLE II EXERCISE PRICE, TERM, METHOD OF EXERCISE
2.01 Exercise Price....................................... 2
2.02 Warrant Rights and Term.............................. 2
2.03 Expiration........................................... 2
2.04 Method of Exercise................................... 2
2.05 Extension of Expiration Date......................... 3
2.06 Method of Redemption................................. 3
2.07 Reduction of Exercise Price.......................... 3
2.08 Solicitation Fee..................................... 3
ARTICLE III ADJUSTMENTS TO CLASS A WARRANTS UPON CERTAIN EVENTS
3.01 Adjustment of Purchase Price and Number of
Shares Purchasable.................................. 3
3.02 Notice of Adjustment................................. 5
3.03 Notice of Certain Events............................. 5
3.04 Effect of Adjustment on Warrant Certificate.......... 6
3.05 Company Not Responsible for Adjustment............... 6
ARTICLE IV RIGHTS OF WARRANT HOLDERS
4.01 No Right of Stockholders............................. 6
4.02 Lost Warrants........................................ 7
4.03 Maintenance of Sufficient and Proper
Shares of Common Stock.............................. 7
4.04 Fractional Shares of Warrants........................ 8
4.05 Registered Holder as Owner........................... 9
40.6 Exchange and Transfer of Warrants.................... 9
i
ARTICLE V THE WARRANT AGENT
5.01 Additional Warrant Agents............................10
ARTICLE VI GENERAL
6.01 Canceled Warrants....................................10
6.02 Taxes on Issuance of Shares of Common Stock.........10
6.03 Dates and Times......................................10
6.04 Amendments to Warrant Agreement......................10
6.05 Binding Agreement....................................10
6.06 Copies of Agreement with Warrant Agent...............11
6.07 Notices..............................................11
6.08 Governing Law........................................11
6.09 Headings.............................................11
6.10 Counterparts.........................................11
SIGNATURES...................................................................12
EXHIBIT A
ii
CLASS A WARRANT AGREEMENT
THIS AGREEMENT is dated as of August 5, 1997, by and between EAGLE TELECOM
INTERNATIONAL, INC., a Texas corporation (the "Company"), and Xxxxxxx X. Xxxxxx
with reference to the following recitals:
W I T N E S S E T H:
WHEREAS, pursuant to a Private Placement Memorandum, the Company is
selling units, each unit consisting of 20,000 shares of common stock, par value
$.001 per share ("Common Stock"), 20,000 four-year redeemable class A warrants
to purchase 20,000 shares of Common Stock at a purchase price of $4.00 per share
("Class A Warrants"), and 20,000 four-year redeemable class B warrants to
purchase 20,000 shares of Common Stock at a purchase price of $6.00 per share
("Class B Warrants").
WHEREAS, Owners of the Class A Warrants shall have certain rights as
specified herein; and
WHEREAS, each Class A Warrant issued under this Agreement entitles the
holder thereof to purchase one share of Common Stock at the price designated as
the "Exercise Price" herein (subject to adjustment hereunder);
NOW THEREFORE, in consideration of the mutual agreements contained herein
and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
ISSUANCE AND EXECUTION OF CLASS A WARRANTS
Section 1.01. APPOINTMENT OF WARRANT AGENT. The Company shall act as
Warrant Agent in accordance with the terms hereof.
Section 1.02. FORM OF WARRANT. Each Class A Warrant shall be evidenced by
a certificate ("Warrant Certificate"). The text of each Warrant Certificate (and
the related forms of exercise and assignment) shall be substantially in the form
attached hereto as Exhibit "A" and may have such identification, designation,
and information thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of the National Association of Securities Dealers, Inc.,
or any stock exchange on which the Class A Warrants may be listed, or to conform
to usage.
Warrant Certificates shall be executed on behalf of the Company by its
President or any Vice President and by its Secretary or an Assistant Secretary.
Each Warrant Certificate shall be dated the date of its initial issuance .
Warrant Certificates shall be executed on behalf of the Company manually and
shall have the Company's seal or a facsimile thereof affixed or
1
imprinted thereon. In case any officer whose signature has been placed upon any
Warrant Certificate ceases to be such before such Warrant Certificate is issued,
it may be issued with the same effect as if such officer had not ceased to be
such at the date of issuance.
ARTICLE II
EXERCISE PRICE, TERM, AND METHOD OF EXERCISE
Section 2.01. EXERCISE PRICE. Unless adjusted as otherwise provided
herein, the exercise price ("Exercise Price") of each Warrant issued hereunder
shall be $4.00 per share. The exercise Price may be adjusted by the Company upon
any extension of the Expiration Date (as hereinafter defined) pursuant to
Section 2.05 and shall be adjusted upon the occurrence of certain events as set
forth in Article III hereof.
Section 2.02. WARRANT RIGHTS AND TERM. Each Class A Warrant shall entitle
the person in whose name the Warrant Certificate shall then be registered on the
books maintained by the Company ("Warrant Holder"), upon exercise thereof and
subject to the provisions thereof and of this Agreement, including provisions
relating to adjustments, to purchase from the Company one fully paid and
non-assessable share of Common Stock at the then Exercise Price, at any time on
and after the date hereof until the expiration of the warrant at 5:00 p.m.,
Houston time, on August 31, 2000, or such later date as may be established
pursuant to Section 2.05 ("Expiration Date").
Section 2.03. EXPIRATION. Each Class A Warrant not exercised by 5:00 p.m.,
Houston time, on the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof under this Agreement shall
thereupon cease.
Section 2.04. METHOD OF EXERCISE. The Warrant Holder may exercise his
rights with respect to all or any whole number of Class A Warrants evidenced by
a Warrant Certificate, provided that (except as provided in Section 4.04), Class
A Warrants shall not be exercisable for other than a whole number of shares of
Common Stock. Exercise shall be effected by surrender of the Warrant
Certificate, with the exercise form thereon duly executed, to the Company at its
offices as designated in Section 6.07 hereof, together with the Exercise Price
for each share of Common Stock to be purchased. Payment of the Exercise Price
shall be made in lawful money of the United States of America by cashier's
check, certified check, federal funds or clearing house check, payable to the
order of the Company.
Upon receipt of a Warrant Certificate with the exercise form duly executed
and accompanied by full and proper payment of the Exercise Price for the shares
of Common Stock purchased thereby, the Company (after requisitioning any
certificates for shares of Common Stock from the Company's transfer agent, if
necessary) shall deliver to the Warrant Holder certificates for the total number
of whole shares of Common Stock for which the Class A Warrants evidenced by such
Warrant Certificate are being exercised in such names and denominations as the
Warrant Holder has directed; provided, however, that it, on the date of
surrender of such Warrant Certificate and payment of the Exercise Price, the
transfer books for the Common Stock shall be closed, the certificates for the
shares of Common Stock shall be issuable as of the date on which such books
shall next be open (whether before, on , or after the Expiration Date) at the
exercise Price and upon the other conditions in effect on the date of such
surrender.
2
In the event that any Warrant Holder shall exercise rights with respect to
less than all of the Class A Warrants evidenced by a Warrant Certificate
surrendered upon the exercise of Class A Warrants, a new Warrant Certificate for
the balance of such Class A Warrants shall be countersigned and delivered to ,
or in accordance with the instructions of, such Warrant Holder.
Section 2.05. EXTENSION OF EXPIRATION DATE. At any time or from time to
time prior to the Expiration Date then in effect, the Company may, in its sole
discretion, extend the Expiration Date to provide for an additional period or
periods during which the Class A Warrants may be exercised as the Company in its
sole discretion, may elect. In connection with any such extension of the
Expiration Date, the Company may, in its sole discretion, increase or decrease
the Exercise Price payable during any such extension.
Section 2.06. METHOD OF REDEMPTION. If the closing bid price of the Common
Stock shall have equaled or exceeded $5.50 per share for a period of twenty (20)
consecutive trading days at any time during the term hereof, the Company may, in
its sole discretion, redeem the Class A Warrants by paying Warrant Holders $.05
per Warrant, provided such notice is mailed to all Warrant holders not later
than twenty (20) days after the end of such period and prescribes a redemption
date at least thirty (30) days but not more than sixty (60) days thereafter.
Warrant Holders will be entitled to exercise Class A Warrants at any time up to
the business day next preceding the redemption date.
Section 2.07. REDUCTION OF EXERCISE PRICE. The Board of Directors retains
the right to reduce the Exercise Price of the Class A Warrants.
Section 2.08. SOLICITATION FEE. The Company reserves the right to pay a
solicitation fee in the amount of 3% of the Exercise Price to NASD registered
broker dealers or other authorized third parties.
ARTICLE III
ADJUSTMENTS TO CLASS A WARRANTS UPON CERTAIN EVENTS
Section 3.01. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES
Purchasable. The Purchase Price and the number of Shares are subject to
adjustment from time to time as set forth in this Section 3.01.
(a) In case the Company shall at any time after the date of this Agreement
(i) declare a dividend on the Common Stock in shares of its capital stock, (ii)
subdivide the outstanding shares, (iii) combine the outstanding Common Stock
into a smaller number of common Stock, or (iv) issue any shares of its capital
stock by reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Purchase Price,
and the number and kind of shares receivable upon exercise, in effect at the
time of the record
3
date for such dividend or of the effective date of such subdivision,
combination, or reclassification shall be proportionately adjusted so that the
holder of any Warrant exercised after such time shall be entitled to receive the
aggregate number and kind of shares which, if such Warrant had been exercised
immediately prior to such time, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination, or
reclassification. Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) No adjustment in the Purchase Price shall be required if such
adjustment is less than $.05; PROVIDED, HOWEVER, that any adjustments which by
reason of this subsection (b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 3.01 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
(c) Upon each adjustment of the Purchase Price as a result of the
calculations made in subsection (a) of this Section 3.01, each Warrant
outstanding prior to the making of the adjustment in the Purchase Price shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of Shares (calculated to the nearest thousandth) obtained by (i)
multiplying the number of Shares purchasable upon exercise of a Warrant
immediately prior to adjustment of the number of Shares by the Purchase Price in
effect prior to adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(d) In case of any capital reorganization of the Company, or of any
reclassification of the Common Stock (other than a reclassification of the
Common Stock referred to in subsection (a) of this Section 3.01), or in the case
of the consolidation of the Company with or the merger of the Company into any
other corporation or of the sale, transfer, or lease of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation, each Warrant shall after such capital reorganization,
reclassification of the Common Stock, consolidation, merger, sale, transfer or
lease be exercisable upon the terms and conditions specified in the Agreement,
for the number of shares of stock or other securities, assets, or cash to which
a holder of the number of shares of Common Stock purchasable (at the time of
such capital reorganization, reclassification of shares consolidation, merger,
sale, transfer, or lease) upon exercise of such Warrant would have been entitled
upon such capital reorganization reclassification of the Common Stock,
consolidation, merger, sale, transfer, or lease; and in any such case, if
necessary, the provisions set forth in this Section 3.01 with respect to the
rights and interests thereafter of the holders of the Class A Warrants shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any shares of stock or other securities, assets, or cash thereafter
deliverable upon the exercise of the Class A Warrants. The subdivision or
combination of the Common Stock at any time outstanding into a greater or lesser
number of shares shall not be deemed to be a reclassification of the Common
Stock for the purposes of this paragraph. The Company shall not effect any such
consolidation, merger, transfer, or lease, unless prior to or simultaneously wit
the consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing,
receiving, or leasing such
4
assets or other appropriate corporation or entity shall assume, by written
instrument executed and delivered to the Warrant holder, the obligation to
deliver to the Warrant holder such shares of stock, securities, or assets as, in
accordance with the foregoing provision, such holders may be entitled to
purchase, and to perform the other obligations of the Company under this Warrant
Agreement.
Section 3.02. NOTICE OF ADJUSTMENT. Whenever the Exercise Price is
adjusted as provided in this Warrant Agreement:
(a) the Company shall compute the adjusted Exercise Price and the number
of shares of Common Stock issuable upon exercise of a Warrant and shall prepare
a notice signed by its Treasurer or Secretary setting forth the adjusted
Exercise Price and the adjusted number of shares of Common Stock issuable upon
the exercise of Warrant or the number of Class A Warrants into which each
outstanding Warrant will be changed, if applicable. Such notice shall show in
reasonable detail the facts (and computations) upon which such adjustment are
base.
(b) the Company shall cause to be mailed to each Warrant Holder in
accordance with the provisions of Section 6.07 a notice stating that the
Exercise Price has been adjusted and setting forth the adjusted Exercise Price
and the adjusted number of Common Stock issuable upon the exercise of a Warrant
or the number of Class A Warrants into which each outstanding Warrant will be
changed , if applicable.
Section 3.03. NOTICE OF CERTAIN EVENTS. In the event that any time after
the date of this Agreement:
(a) the Company shall adopt a dividend policy, change a previously adopted
dividend policy, or declare a dividend in the absence of, or in conflict with, a
dividend policy or declare any distribution with respect to the Common stock; or
(b) the Company shall offer for subscription to the holders of the Common
Stock any additional shares of stock of any class or any other securities
convertible into Common Stock or any rights to subscribe thereto; or
(c) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Common
Stock, regardless of the effect of any such event on the outstanding number of
shares of Common Stock; or
(d) there shall be any Capital Change in the Company or any merger of the
Company with another corporation (other than a merger with a subsidiary in which
merger the Company is the continuing corporation and which does not result in
any reclassification or change of the shares of Common Stock issuable upon
exercise of the Warrant); or
(e) there shall be a voluntary or involuntary dissolution, liquidation, or
winding up of the Company; (each such event hereinafter being referred to as a
"Notification Event"), the Company shall cause to be mailed to each Warrant
Holder, not later than the earlier of the date public announcement of the
Notification Event is first made or the date 20 days prior to the record date,
if any, in connection with such Notification Event, written notice specifying
the
5
nature of such event and the effective date of , or the date on which the books
of the Company shall close or a record shall be taken with respect to such
event. Such notice shall also set forth facts indicating the effect of such
action (to the extent such effect may be known at the date of such notice) on
the Exercise Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Class A Warrants. The
failure to give the notice required by this Section 3.03 shall not affect the
legality or validity of any such Notification Event.
Section 3.04. EFFECT OF ADJUSTMENT OF WARRANT CERTIFICATES. The form of
Warrant Certificate need not be changed because of any change in the Exercise
Price, the number of shares of Common Stock issuable upon the exercise of a
Warrant, or the number of Class A Warrants outstanding pursuant to this Article
and Warrant Certificates issued before or after such changes may state the same
Exercise Price, the same number of Class A Warrants, and the same number of
shares of Common Stock issuable upon exercise of Class A Warrants as are stated
in the Warrant Certificates thereafter issued pursuant to this Agreement. The
Company may, however, at any time, in its sole discretion, make any change in
the form of Warrant Certificate that it may deem appropriate and that does not
affect the substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substituted for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
Section 3.05. COMPANY NOT RESPONSIBLE FOR ADJUSTMENT. The Company shall
have the right, but shall not at any time be under any duty or responsibility to
any Warrant Holder, to determine whether such facts exist which may require any
adjustment in the Exercise Price of, or the shares of Common Stock issuable upon
exercise of, the Class A Warrants or to make inquiry or take other action with
respect of the nature or extent of any such adjustments, when made, or with
respect to the validity or value or the kind or amount of any shares of Common
Stock or of any securities or property which may at any time be issued or
delivered upon the exercise of any Warrant, and makes no representation with
respect thereto.
ARTICLE IV
RIGHTS OF WARRANT HOLDERS
Section 4.01. NO RIGHTS OF STOCKHOLDERS. No Warrant Holder, as such, shall
be entitled to vote or to receive dividends or shall otherwise be deemed to be
the holder of shares of Common Stock for any purpose, nor shall anything
contained herein or in any Warrant Certificate be construed to confer upon any
Warrant Holder, as such, any of the rights of a stockholder of the Company or
any right to vote upon or give or withhold consent to any action of the Company
(whether upon any reorganization, issuance of securities, reclassification or
conversion of Common Stock, consolidation, merger, sale, lease, conveyance, or
otherwise), receive notice of meetings or other action affecting stockholders
(except for notices expressly provided for in the Agreement) or receive
dividends or subscription rights, until such Warrant Certificate shall have been
surrendered for exercise accompanied by full and proper payment of the Exercise
Price as provided in this Agreement and shares of Common Stock thereunder shall
have become issuable and until such person shall have been deemed to have become
a holder of record of such shares. If, the date of surrender of such Warrant
Certificate and payment of such Exercise Price, the transfer books for the
Common Stock shall be closed, certificates for the shares of Common Stock shall
be issuable on the date on which such books
6
shall next be open (whether before, on, or after the Expiration Date) and until
such date, the Company shall be under no duty to deliver any certificate for
such shares of Common Stock. No Warrant Holder shall, upon the exercise of Class
A Warrants, be entitled to any dividends if the record date with respect to
payment of such dividends shall be a date prior to the date such shares of
Common Stock became issuable upon the exercise of such Class A Warrants.
Section 4.02 LOST CLASS A WARRANTS. If any Warrant Certificate is lost,
stolen, mutilated, or destroyed, the Company may, upon receipt of evidence
satisfactory to the Company of such loss, theft, mutilation, or destruction and
on such terms as to indemnity or otherwise as the Company may in its discretion
impose (which shall, in the case of a mutilated Warrant Certificate, include the
surrender thereof) , issue a new Warrant Certificate of like denomination and
tenor as the lost, stolen, mutilated, or destroyed Certificate. Applicants for
such substitute Warrant Certificates shall also comply with such other
reasonable regulations and pay any such reasonable charges as the Company may
prescribe. IN the event any Warrant certificate is lost, stolen, mutilated, or
destroyed, and the owner thereof desires to exercise the Class A Warrants
evidenced thereby, the Company may, in lieu of issuing a substitute Warrant
Certificate, exercise or authorize the exercise thereof upon receipt of the
above evidence and on such terms of indemnity as it may require.
Section 4.03. MAINTENANCE OF SUFFICIENT AND PROPER SHARES OF COMMON STOCK.
(a) The Company shall at all times reserve and keep available a number of
authorized shares of Common Stock sufficient to permit the exercise in full of
all outstanding Class A Warrants and will cause to be available a sufficient
number of certificates therefor.
(b) If at any time hereafter the Common Stock shall become listed on a
national securities exchange, prior to the issuance of any shares of Common
Stock upon the exercise of Class A Warrants, the Company shall use its best
efforts to secure the listing of such share of Common Stock upon any and all
such securities exchanges.
(c) If at any time the taking of any action would cause an adjustment in
the Exercise Price so that the exercise of a Warrant while such Exercise Price
is in effect would cause a share of Common Stock to be issued at a price below
its then par value, the Company shall take such action as may, in the opinion of
its counsel, be necessary in order that it may validly and legally issue fully
paid and non-assessable shares of Common Stock upon the exercise of the Class A
Warrants at such Exercise Price.
(d) Subject to the restrictions on transfer referred to in Section 4.06,
if any shares of Common Stock issuable upon the exercise of the Class A Warrants
require registration or approval of any governmental authority, or the taking of
any other action under the laws of the United States or any political
subdivision thereof or any other jurisdiction before such shares of Common Stock
may be legally and validly issued, then the Company shall in good faith and with
reasonable diligence endeavor to secure such registration or approval or to take
such other actions as may be appropriate to allow for the lawful issuance of
shares of Common
7
Stock upon exercise of the Class A Warrants, provided that no share of Common
Stock shall be issued for the period during which the Company is endeavoring to
obtain such registration or approval or is taking such other action. Warrant
Holders may exercise Class A Warrants during any such period as provided herein
and shall be entitled to the issuance of the shares of Common Stock on such date
as the shares of Common Stock may be legally and validly issued, at the Exercise
Price and upon the other conditions in effect on the date of surrender of the
Warrant Certificates accompanied by full and proper payment for the shares of
Common Stock.
Section 4.04. FRACTIONAL SHARES OF CLASS A WARRANTS.
(a) Anything contained herein to the contrary notwithstanding, the Company
shall not be required to issue any fraction of a share of Common Stock in
connection with the exercise of Class A Warrants. Class A Warrants may not be
exercised in such number as would result (except for the provisions of this
Section) in the issuance of a fraction of a share of Common Stock, unless the
Warrant Holder is presenting for exercise Warrant Certificates representing all
Class A Warrants then owned of record by such Warrant Holder. In such event, the
Company shall, upon the exercise of all of such Class A Warrants, issue to such
Warrant Holder the largest aggregate whole number of shares of Common Stock
called for thereby upon receipt of the Exercise Price for all of such Class A
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Common Stock, multiplied by its fair market value as of the first business day
preceding the date on which the Class A Warrants are presented for exercise.
Such fair market value shall be (1) the average of the high and low bid prices
of the Common Stock, as reported by the National Association of Securities
Dealers Automated Quotation System on such date, or (2) if the Common Stock is
then listed on a national securities exchange or the national market system of
the over-the-counter market, the closing price of the Common Stock on such
exchange on such date, or (3) if the Common Stock is not trading on an exchange,
or an over-the-counter market, then as determined by the Board of Directors.
Every Warrant Holder, by the acceptance of the Warrant Certificate, expressly
waives any right to exercise Class A Warrants for a fractional share of Common
Stock except as provided in this subsection.
(b) Anything herein to the contrary notwithstanding, the Company shall not
be required to issue fractions of Class A Warrants on any distribution of Class
A Warrants to Warrant Holders or to distribute Warrant Certificates that
evidence fractional Class A Warrants nor shall the Company be required to make
any cash adjustment with respect to a fractional interest in a Warrant. Any
person entitled to a fractional interest in a Warrant may elect, during such
period of time (not in excess of 90 days) from the date such fractional interest
is acquired, as the Company shall determine, to purchase the additional
fractional interest required to make up a full Warrant or to sell the fractional
interest to which such person is entitled. Such election shall be made on the
form provided for such purpose by the Company. If such election is not made in
the time prescribed by the Company, the fractional interest to which such person
is entitled shall be sold. Such purchase or sale shall be effected in the manner
set forth in subsection (c) of this Section by the Company, acting as agent for
the person entitled to such fractional interest.
8
(c) The Company shall xxxx each person entitled to a fractional interest
in Class A Warrants for the cost of any such fractional interest purchased by it
as agent for such person or shall remit to such person the proceeds of the sale
of any such fractional interest sold by it as such agent. In the case of a
purchase, the Company may sell the Warrant to which such person is entitled if
payment is not received by the Company within 30 days after the mailing of such
xxxx and, after deducting the amount of such xxxx and any other charges, shall
remit the balance, if any, to such person. Fractional interests in Class A
Warrants shall be nontransferable except by or to the Company acting as herein
authorized. The Company may purchase or sell fractional interests on the basis
of market prices of the Class A Warrants, as determined by the company in its
sole discretion, and it is expressly authorized to value fractional interests
without actual purchase or sale on the basis of the market price of the Class A
Warrants as determined by it in its sole discretion. Purchase and sales of
fractional interests by the Company may, in its sole discretion, be set off
against each other on the basis of market prices of the Class A Warrants, as
determined by the Company in its sole discretion.
Section 4.05. REGISTERED HOLDER AS OWNER. Every holder of a Warrant
Certificate, by accepting the same, consents and agrees with the Company, and
every subsequent holder of such Warrant Certificate that until the Warrant
Certificate is transferred on the books of the Company, the Company may treat
the registered Warrant Holder as the absolute owner thereof for all purposes,
notwithstanding any notice to the contrary.
Section 4.06. EXCHANGE AND TRANSFER OF CLASS A WARRANTS. Warrant
Certificates may be split-up, combined, or exchanged at any time for other
Warrant Certificates evidencing a like aggregate whole number of Class A
Warrants and may be transferred in whole or in part. Any Warrant Holder desiring
to split-up, combine, or exchange Warrant Certificates shall make such request
in writing delivered to the Company as provided by Section 6.07 and shall
surrender therewith the Warrant Certificate or Certificates to be so split-up,
combined, or exchanged. Subject to the restrictions on transfer of the Class A
Warrants contained in the applicable federal or state securities laws, transfers
of outstanding Warrant Certificates may be effected by the Company, from time to
time, upon the books to be maintained by the Company for that purpose, upon
surrender of the Warrant Certificates to the Company as provided by Section
6.07, which Certificates must be properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer, all in form
satisfactory to the Company. Upon any such surrender for a split-up,
combination, exchange, or transfer, the Company shall countersign and deliver to
the person entitled thereto a Warrant Certificate or Warrant Certificates as so
requested. The Company shall not be required to effect any transfer, split-up,
or exchange that will result in the issuance of a Warrant Certificate evidencing
other than a whole number of Class A Warrants.
9
ARTICLE V
THE WARRANT AGENT
Section 5.01. ADDITIONAL WARRANT AGENTS. The Company may designate one or
more corporations as a successor Warrant Agent, or as additional Warrant Agents
to perform, either jointly or in place of the Company.
ARTICLE VI
GENERAL
Section 6.01. CANCELED CLASS A WARRANTS. The Company shall cancel any
Warrant Certificate delivered to it for exercise, in whole or in part, or
delivered to it for transfer, or for split-up, combination, exchange, or
substitution and shall deliver to the Company, in a manner satisfactory to the
Company, such canceled Warrant Certificates.
Section 6.02. TAXES ON ISSUANCE OF SHARES OF COMMON STOCK. The Company
shall from time to time promptly pay all taxes and charges that may be imposed
upon the Company with respect to the issuance or delivery of shares of Common
Stock upon the exercise of Class A Warrants, but the Company shall not be
obligated to pay any transfer taxes with respect of the issuance or delivery of
the Warrant Certificates or shares of Common Stock in a name other than that of
the Warrant Holder. The Company shall be authorized to charge Warrant Holders a
transfer fee of up to $7.50 per certificate.
Section 6.03. DATES AND TIMES. If any date set forth in this Warrant
Agreement shall fall on a day other than a full business day in Houston, said
date shall be deemed to be the next business day succeeding that date. All times
shall be the legal time then in effect in Houston.
Section 6.04. AMENDMENTS TO WARRANT AGREEMENTS. The Company may, without
the consent or concurrence of the Warrant Holders, by supplemental agreement or
otherwise, make any amendments, alterations, deletions, or corrections in this
Agreement that it deem necessary or desirable: (a) to cure any ambiguity or
correct any defect, inconsistency, clerical omission or mistake, or manifest
error contained herein; (b) to confer additional rights upon the Warrant
Holders; or (c) in any other respect that does not adversely affect the rights
of the Warrant Holders hereunder.
Section 6.05. BINDING AGREEMENT. All the covenants and provisions of this
Agreement by or for the benefit of the company shall bind and inure to the
benefit of the respective successors and assigns hereunder. Nothing expressed in
this Agreement and nothing that may be implied from any of the provisions hereof
is intended, or shall be construed, to confer upon or give to any person or
corporation, other than the Company and the Warrant Holders, any legal or
equitable right, remedy, or claim under or by reason of this Agreement or of any
covenant, condition, stipulation, promise, or agreement herein, and all
covenants, conditions, stipulations, promises, and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Holders, and their respective successors and assigns.
10
Section 6.06. COPIES OF AGREEMENT. A copy of this Agreement, as such may
be amended from time to time, shall be available for inspection by any Warrant
Holder at the office of the Company, as designated in Section 6.07, during
normal business hours. As a condition of such inspection, the Company may
require any such Warrant Holder to submit his or her Warrant Certificate for
inspection.
Section 6.07. NOTICES. Any communication, notice, or demand to be given
hereunder shall be duly given if in writing and delivered, or sent by first
class mail, certified or registered, postage prepaid and addressed as follows:
(a) If to the Company:
H. Xxxx Xxxxxx, Chief Executive Officer
Eagle Telecom International, Inc.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
(b) If to a Warrant Holder: at such person's last known address as such
shall appear on the registration books maintained by the Company.
Any party may change the address to which any communication, notice,
or demand shall be given by giving notice of such change in conformity with the
provisions of this Section.
Section 6.08. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 6.09 HEADINGS. The Article and Section headings herein are for
convenience only and are not part of this Agreement and shall not affect the
interpretation thereof.
Section 6.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original and
all such counterparts shall together constitute but one and the same instrument.
11
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
EAGLE TELECOM INTERNATIONAL, INC.
By ______________________________
H. XXXX XXXXXX
Chief Executive Officer
