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Exhibit 5 WARRANT TO PURCHASE COMMON STOCK
OF
PICK COMMUNICATIONS CORP.
This is to Certify That, FOR VALUE RECEIVED, _______________, or
assigns ("Holder"), is entitled to purchase, subject to the provisions of this
Warrant, from PICK Communications Corp., a Nevada corporation ("Company"),
______________________________ fully paid, validly issued and nonassessable
shares of Common Stock of the Company ("Common Stock") at a price equal to $.50
per share at any time or from time to time during the period from July 29, 1998
until July 29, 2003, subject to adjustment as set forth herein. The number of
shares of Common Stock to be received upon the exercise of this Warrant and the
price to be paid for each share of Common Stock may be adjusted from time to
time as hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price". This Warrant was originally issued pursuant
to an agency agreement ("Agency Agreement") between the Company and Commonwealth
Associates ("Commonwealth"), in connection with a private offering (the "Private
Placement") of the Company's 10% senior secured notes (the "Notes") through
Commonwealth pursuant to the terms of a confidential term sheet dated July 13,
1998 (the "Term Sheet").
(a) EXERCISE OF WARRANT; CANCELLATION OF WARRANT.
(1) This Warrant may be exercised in whole or in part at any
time or from time to time on or after July 29, 1998 and until July 29, 2003 (the
"Exercise Period"), subject to the provisions of Section (j)(2) hereof;
provided, however, that (i) if either such day is a day on which banking
institutions in the State of New York are authorized by law to close, then on
the next succeeding day which shall not be such a day, and (ii) in the event of
any merger, consolidation or sale of substantially all the assets of the Company
as an entirety, resulting in any distribution to the Company's stockholders,
prior to July 29, 2003, the Holder shall have the right to exercise this Warrant
commencing at such time through July 29, 2003 into the kind and amount of shares
of stock and other securities and property (including cash) receivable by a
holder of the number of shares of Common Stock into which this Warrant might
have been exercisable immediately prior thereto. This Warrant may be exercised
by presentation and surrender hereof 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 Warrant Shares specified in such form. As soon as practicable
after each such exercise of the warrants, but not later than seven (7) days from
the date of such exercise, the Company shall issue and deliver to the Holder a
certificate or certificate for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee. 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 thereof to purchase the balance of the Warrant Shares purchasable
thereunder. 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
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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 physically delivered to the Holder.
(2) At any time during the Exercise Period, the Holder may, at
its option, exchange this Warrant, in whole or in part (a "Warrant Exchange"),
into the number of Warrant Shares determined in accordance with this Section
(a)(2), by surrendering this Warrant at the principal office of the Company or
at the office of its stock transfer agent, accompanied by a notice stating such
Xxxxxx's intent to effect such exchange, the number of Warrant Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
shares issuable upon such Warrant Exchange and, if applicable, a new warrant of
like tenor evidencing the balance of the shares remaining subject to this
Warrant, shall be issued as of the Exchange Date and delivered to the Holder
within seven (7) days following the Exchange Date. In connection with any
Warrant Exchange, this Warrant shall represent the right to subscribe for and
acquire the number of Warrant Shares (rounded to the next highest integer) equal
to (i) the number of Warrant Shares specified by the Holder in its Notice of
Exchange (the "Total Number") less (ii) the number of Warrant Shares equal to
the quotient obtained by dividing (A) the product of the Total Number and the
existing Exercise Price by (B) the current market value of a share of Common
Stock. Current market value shall have the meaning set forth Section (c) below,
except that for purposes hereof, the date of exercise, as used in such Section
(c), shall mean the Exchange Date.
(b) RESERVATION OF SHARES. The Company shall at all times reserve
for issuance and/or delivery upon exercise of this Warrant such number of shares
of its Common Stock as shall be required for issuance and delivery upon exercise
of the Warrants.
(c) FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:
(1) 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 National Market, the current
market value shall be the last reported sale price of the Common
Stock on such exchange or market on the last business day prior to
the date of exercise of this Warrant or if no such sale is made on
such day, the average closing bid and asked prices for such day on
such exchange or market; or
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, but is traded on the Nasdaq SmallCap
Market, the current market value shall be the average of the closing
bid and asked prices for such day on such market and if the Common
Stock is not so traded, the current market value shall be the mean
of the last reported bid and asked prices reported by the National
Quotation Bureau, Inc. on the last business day prior to the date of
the exercise of this Warrant; or
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(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value shall be an amount, not less than
book value thereof as at the end of the most recent fiscal year of
the Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the
Board of Directors of the Company.
(d) 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. Upon surrender of this Warrant to the Company at
its principal office 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 cancelled. This Warrant may be divided or
combined with other warrants which carry the same rights upon presentation
hereof at the principal 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 and date. 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.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder 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 herein.
(f) ANTI-DILUTION PROVISIONS. Subject to the provisions of Section l
hereof, the Exercise Price in effect at any time and the number and kind of
securities purchasable upon the exercise of the Warrants shall be subject to
adjustment from time to time upon the happening of certain events as follows:
(1) In case the Company shall (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify its outstanding shares of Common Stock into a smaller
number of shares, 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, combination or reclassification shall be
adjusted so that it shall equal the price determined by multiplying
the Exercise Price by a fraction, the denominator of which shall be
the number of shares of Common Stock outstanding after giving effect
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to such action, and the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such action.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(2) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at a price (the
"Subscription Price") (or having a conversion price per share) less
than the current market price of the Common Stock (as defined in
Subsection (8) below) on the record date mentioned below, or less
than the Exercise Price on such record date the Exercise Price shall
be adjusted so that the same shall equal the lower of (i) the price
determined by multiplying the Exercise Price in effect immediately
prior to the date of such issuance by a fraction, the numerator of
which shall be the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and the number of
additional shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so offered)
would purchase at such current market price per share of the Common
Stock, and the denominator of which shall be the sum of the number
of shares of Common Stock outstanding on such record date and the
number of additional shares of Common Stock offered for subscription
or purchase (or into which the convertible securities so offered are
convertible) or (ii) in the event the Subscription Price is equal to
or higher than the current market price but is less than the
Exercise Price, the price determined by multiplying the Exercise
Price in effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the sum of the number of
shares outstanding on the record date mentioned below and the number
of additional shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so offered (or
the aggregate conversion price of the convertible securities so
offered) would purchase at the Exercise Price in effect immediately
prior to the date of such issuance, and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
on the record date mentioned below and the number of additional
shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever such rights or
warrants are issued and shall become effective immediately after the
record date for the determination of shareholders entitled to
receive such rights or warrants; and to the extent that shares of
Common Stock are not delivered (or securities convertible into
Common Stock are not delivered) after the expiration of such rights
or warrants the Exercise Price shall be readjusted to the Exercise
Price which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered.
(3) In case the Company shall hereafter distribute to the
holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions and dividends or
distributions referred to in Subsection (1) above) or subscription
rights or warrants (excluding those referred to in Subsection (2)
above),
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then in each such case the Exercise Price in effect thereafter shall
be determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding
multiplied by the current market price per share of Common Stock (as
defined in Subsection (8) below), less the fair market value (as
determined by the Company's Board of Directors) of said assets or
evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of
shares of Common Stock outstanding multiplied by such current market
price per share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed. Such adjustment
shall be made whenever any such distribution is made and shall
become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(4) In case the Company shall issue shares of its Common Stock
(excluding shares issued (i) in any of the transactions described in
Subsection (1) above, (ii) upon exercise of options granted to the
Company's employees under a plan or plans adopted by the Company's
Board of Directors and approved by its shareholders, if such shares
would otherwise be included in this Subsection (4), (but only to the
extent that the aggregate number of shares excluded hereby and
issued after the date hereof, shall not exceed 5% of the Company's
Common Stock outstanding at the time of any issuance), (iii) upon
exercise of options and warrants outstanding at July 29, 1998, and
this Warrant (iv) to shareholders of any corporation which merges
into the Company in proportion to their stock holdings of such
corporation immediately prior to such merger, upon such merger, or
(v) issued in a bona fide public offering pursuant to a firm
commitment underwriting, but only if no adjustment is required
pursuant to any other specific subsection of this Section (f)
(without regard to Subsection (9) below) with respect to the
transaction giving rise to such rights] for a consideration per
share (the "Offering Price") less than the current market price per
share (as defined in Subsection (8) below) on the date the Company
fixes the offering price of such additional shares or less than the
Exercise Price, the Exercise Price shall be adjusted immediately
thereafter so that it shall equal the lower of (i) the price
determined by multiplying the Exercise Price in effect immediately
prior thereto by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares and the number of
shares of Common Stock which the aggregate consideration received
(determined as provided in Subsection (7) below) for the issuance of
such additional shares would purchase at such current market price
per share of Common Stock, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after the
issuance of such additional shares or (ii) in the event the Offering
Price is equal to or higher than the current market price per share
but less than the Exercise Price, the price determined by
multiplying the Exercise Price in effect immediately prior to the
date of issuance by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to
the issuance of such additional shares and the number of shares of
Common Stock which the aggregate consideration received (determined
as provided in subsection (7) below) for the issuance of such
additional shares would purchase at the Exercise Price in effect
immediately prior to the date of
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such issuance, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the issuance of
such additional shares. Such adjustment shall be made successively
whenever such an issuance is made.
(5) In case the Company shall issue any securities convertible
into or exchangeable for its Common Stock (excluding securities
issued in transactions described in Subsections (2) and (3) above)
for a consideration per share of Common Stock (the "Conversion
Price") initially deliverable upon conversion or exchange of such
securities (determined as provided in Subsection (7) below) less
than the current market price per share (as defined in Subsection
(8) below) in effect immediately prior to the issuance of such
securities, or less than the Exercise Price, the Exercise Price
shall be adjusted immediately thereafter so that it shall equal the
lower of (i) the price determined by multiplying the Exercise Price
in effect immediately prior thereto by a fraction, the numerator of
which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such securities and
the number of shares of Common Stock which the aggregate
consideration received (determined as provided in Subsection (7)
below) for such securities would purchase at such current market
price per share of Common Stock, and the denominator of which shall
be the sum of the number of shares of Common Stock outstanding
immediately prior to such issuance and the maximum number of shares
of Common Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or exchange
price or rate or (ii) in the event the Conversion Price is equal to
or higher than the current market price per share but less than the
Exercise Price, the price determined by multiplying the Exercise
Price in effect immediately prior to the date of issuance by a
fraction, the numerator of which shall be the sum of the number of
shares outstanding immediately prior to the issuance of such
securities and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in
subsection (7) below) for such securities would purchase at the
Exercise Price in effect immediately prior to the date of such
issuance, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to
the issuance of such securities and the maximum number of shares of
Common Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or exchange
price or rate. Such adjustment shall be made successively whenever
such an issuance is made.
(6) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsections (1), (2), (3), (4) and
(5) above, the number of Shares purchasable upon exercise of this
Warrant shall simultaneously be adjusted by multiplying the number
of Shares initially issuable upon exercise of this Warrant by the
Exercise Price in effect on the date hereof and dividing the product
so obtained by the Exercise Price, as adjusted.
(7) For purposes of any computation respecting consideration
received pursuant to Subsections (4) and (5) above, the following
shall apply:
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(A) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such
cash, provided that in no case shall any deduction be made for
any commissions, discounts or other expenses incurred by the
Company for any underwriting of the issue or otherwise in
connection therewith;
(B) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the
fair market value thereof as determined in good faith by the
Board of Directors of the Company (irrespective of the
accounting treatment thereof), whose determination shall be
conclusive; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock,
the aggregate consideration received therefor shall be deemed
to be the consideration received by the Company for the
issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the
conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (A)
and (B) of this Subsection (7)).
(8) For the purpose of any computation under Subsections (2),
(3), (4) and (5) above, the current market price per share of Common
Stock at any date shall be determined in the manner set forth in
Section (c) hereof except that the current market price per share
shall be deemed to be the higher of (i) the average of the prices
for 30 consecutive business days before such date or (ii) the price
on the business day immediately preceding such date.
(9) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least five cents ($0.05) in such price; provided, however, that any
adjustments which by reason of this Subsection (9) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All
calculations under this Section (f) shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
Anything in this Section (f) to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to make such
changes in the Exercise Price, in addition to those required by this
Section (f), as it shall determine, in its sole discretion, to be
advisable in order that any dividend or distribution in shares of
Common Stock, or any subdivision, reclassification or combination of
Common Stock, hereafter made by the Company shall not result in any
Federal Income tax liability to the holders of Common Stock or
securities convertible into Common Stock (including Warrants).
(10) Whenever the Exercise Price is adjusted, as herein
provided, the Company shall promptly but no later than 10 days after
any request for such an adjustment by the Holder, cause a notice
setting forth the adjusted Exercise Price and adjusted number of
Shares issuable upon exercise of each Warrant, and, if requested,
information describing the transactions giving rise to such
adjustments, to be mailed
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to the Holders at their last addresses appearing in the Warrant
Register, and shall cause a certified copy thereof to be mailed to
its transfer agent, if any. In the event the Company does not
provide the Holder with such notice and information within 10 days
of a request by the Holder, then notwithstanding the provisions of
this Section (f), the Exercise Price shall be immediately adjusted
to equal the lowest Offering Price, Subscription Price or Conversion
Price, as applicable, since the date of this Warrant, and the number
of shares issuable upon exercise of this Warrant shall be adjusted
accordingly. The Company may retain a firm of independent certified
public accountants selected by the Board of Directors (who may be
the regular accountants employed by the Company) to make any
computation required by this Section (f), and a certificate signed
by such firm shall be conclusive evidence of the correctness of such
adjustment.
(11) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (1) above, the Holder of this
Warrant thereafter shall become entitled to receive any shares of
the Company, other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Subsections (1) to (9), inclusive
above.
(12) In the event the Company defaults in the payment of the
Notes and fails to file a registration statement to register the
Warrant Shares within 90 days after the Extension Period (as defined
and described in the Notes), the Exercise Price of this Warrant
shall be adjusted downward by 10% per month until such registration
statement is filed.
(13) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon exercise of this
Warrant, Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated
in the similar Warrants initially issuable pursuant to this
Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of the foregoing Section, 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 determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the holder or any
holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common
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Stock or (ii) 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
(iii) 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 to the Holder, at least fifteen days prior the date specified in
(x) or (y) below, as the case may be, 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.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. 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 with a subsidiary
in which merger 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 at any time
prior to the expiration of the 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 (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered by
the provisions of Subsection (1) of Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933.
(1) The Company hereby agrees that no later than 30 days after
its Annual Report on Form 10-K for the year ending December 31, 1998
has been filed with the SEC, it will file a registration statement
covering the resale of the Warrant Shares on Form S-3 or such other
form as the Company desires, pursuant to the Securities Act of 1933
(the "Act'), and the Company will use its best efforts to cause such
registration to become effective as promptly as practicable
thereafter. In the event the
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Company fails to repay the Notes prior to the end of the Extension
Period (as defined and described in the Term Sheet), the Company
hereby agrees to file the registration statement required under this
Section (j)(1) within the 90-day period following the Extension
Period.
(2) The Company will, until such time as the Warrant Shares
may be sold under Rule 144 without volume limitation:
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus
contained therein as may be necessary to keep such
registration statement effective;
(c) furnish to the Holders participating in such registration
and to the underwriters of the securities being registered
such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such
other documents as such underwriters may reasonably request in
order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as the
Holders may reasonably request in writing within twenty (20)
days following the original filing of such registration
statement, except that the Company shall not for any purpose
be required to execute a general consent to service of process
or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(e) notify the Holders, promptly after it shall receive notice
thereof, of the time when such registration statement has
become effective or a supplement to any prospectus forming a
part of such registration statement has been filed;
(f) notify the Holders promptly of any request by the SEC for
the amending or supplementing of such registration statement
or prospectus or for additional information;
(g) prepare and file with the SEC, promptly upon the request
of any Holders, any amendments or supplements to such
registration statement or prospectus which, in the opinion of
counsel for such Holders (and concurred in by counsel for the
Company), is required under the Act or the rules and
regulations thereunder in connection with the distribution of
Common Stock by such Holders;
(h) prepare and promptly file with the SEC and promptly notify
such Holders of the filing of such amendment or supplement to
such registration statement or prospectus as may be necessary
to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be
delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as
then in effect
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would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in the light of the circumstances in which they were
made, not misleading; and
(i) advise the Holders, promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order
by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent
the issuance of any stop order or to obtain its withdrawal if
such stop order should be issued.
(3) All fees, costs and expenses of and incidental to such
registration, inclusion and public offering in connection therewith
shall be borne by the Company, provided, however, that the Holders
shall bear their pro rata share of the underwriting discount and
commissions and transfer taxes. The fees, costs and expenses of
registration to be borne by the Company as provided above shall
include, without limitation, all registration, filing, and NASD
fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, and all legal fees and disbursements
and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are
to be registered and qualified (except as provided above). Fees and
disbursements of counsel and accountants for the Holders and any
other expenses incurred by the Holders not expressly included above
shall be borne by the Holders.
(4) The Company will indemnify and hold harmless each Holder
of Warrant Shares which are included in a registration statement
pursuant to the provisions of Section (j)(1) hereof, its directors
and officers, and any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or such
underwriter within the meaning of the Act, from and against, and
will reimburse such Holder and each such underwriter and controlling
person with respect to, any and all loss, damage, liability, cost
and expense to which such Holder or any such underwriter or
controlling person may become subject under the Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, damage, liability, cost or expenses
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information furnished by such Xxxxxx, such underwriter or such
controlling person in writing specifically for use in the
preparation thereof.
(5) Each Holder of Warrant Shares included in a registration
pursuant to the provisions of Section (j)(1) hereof will indemnify
and hold harmless the
Page 94 of 128 Pages
Company, its directors and officers, any controlling person and any
underwriter from and against, and will reimburse the Company, its
directors and officers, any controlling person and any underwriter
with respect to, any and all loss, damage, liability, cost or
expense to which the Company or any controlling person and/or any
underwriter may become subject under the Act or otherwise, insofar
as such losses, damages, liabilities, costs or expenses are caused
by any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in
which they were made, not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by
or on behalf of such Holder specifically for use in the preparation
thereof.
(6) Promptly after receipt by an indemnified party pursuant to
the provisions of Sections (j)(4) or (5) of notice of the
commencement of any action involving the subject matter of the
foregoing indemnity provisions such indemnified party will, if a
claim thereof is to be made against the indemnifying party pursuant
to the provisions of said Sections (j)(4) or (5), promptly notify
the indemnifying party of the commencement thereof; but the omission
to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified
Page 95 of 128 Pages
party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to participate
in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party,
provided, however, if counsel for the indemnifying party concludes
that a single counsel cannot under applicable legal and ethical
considerations, represent both the indemnifying party and the
indemnified party, the indemnified party or parties have the right
to select separate counsel to participate in the defense of such
action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party pursuant to the
provisions of said Sections (j)(4) or (5) for any legal or other
expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed
counsel in accordance with the provisions of the preceding sentence,
(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after the notice of the commencement
of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of
the indemnifying party.
PICK COMMUNICATIONS CORP.
By:
------------------------------------------
Xxxxxxx X. Xxxxxxx, Vice President Officer
Dated: January 19, 1999
Attest:
------------------------------------------
Xxxxxx X. Xxxxxxx, Chief Financial Officer
Page 96 of 128 Pages
PURCHASE FORM
Dated_______________
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing shares of Common Stock and hereby makes
payment of in payment of the actual exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name________________________________________
(Please typewrite or print in block letters)
Address_____________________________________
Signature___________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED,______________________________hereby sells,
assigns and transfers unto
Name________________________________________
(Please typewrite or print in block letters)
Address_____________________________________
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 in the premises.
Date________________________
Signature___________________
