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EXHIBIT 10.30
THIS STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT
BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD
THERETO, OR (II) IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER,
REGISTRATION UNDER SUCH ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER.
STOCK PURCHASE WARRANT
This Stock Purchase Warrant is issued as of this 21th day of June 1999
by XXXXXXX COMMUNICATIONS CORPORATION, an Iowa corporation (the "Issuer"), to
NEW VALLEY CORPORATION, (the "Purchaser"; the Purchaser or any registered
assignee or transferee hereof, a "Holder").
AGREEMENT:
1. Issuance of Warrants; Term.
(a) For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Issuer hereby grants to Holder
the right to purchase 250,000 shares of the Issuer's Common Stock, no par value
per share (the "Common Stock").
(b) The shares of Common Stock issuable upon exercise of this
Warrant Certificate are hereinafter referred to as the "Warrant Shares." This
Warrant Certificate shall be exercisable at any time and from time to time prior
to June 21, 2009.
2. Exercise Price. The exercise price per Warrant Share for
which all or any of the Warrant Shares may be purchased pursuant to the terms of
this Warrant Certificate shall be $3.50, and shall be subject to adjustment from
time to time in accordance with Section 5 (as the same may be so adjusted from
time to time, the "Exercise Price").
3. Exercise. (a) This Warrant Certificate may be exercised by
the Holder as to all or any increment or increments of one thousand (1000)
Warrant Shares (or the balance of the Warrant Shares if less than such number),
upon delivery of written notice of intent to exercise to the Issuer at the
following address: Xxxxxxx Communications Corporation, 0000 00xx Xxxxxx, X.X.,
Xxxxx Xxxxxx, Xxxx 00000, Attention: Chief Financial Officer (or such other
address as the Issuer shall
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designate in a written notice to the Holder), together with this Warrant
Certificate and payment to the Issuer of the aggregate Exercise Price of the
Warrant Shares so purchased. The Exercise Price shall be payable by certified or
bank check, by wire transfer of immediately available funds, or as otherwise
specified by the Issuer. Upon exercise of this Warrant Certificate as aforesaid,
the Issuer shall as promptly as practicable execute and deliver to the Holder a
certificate or certificates for the total number of whole Warrant Shares for
which this Warrant Certificate is being exercised in such names and
denominations as are requested by such Holder. If this Warrant Certificate shall
be exercised with respect to less than all of the Warrant Shares, the Holder
shall be entitled to receive a new Warrant Certificate covering the number of
Warrant Shares in respect of which this Warrant Certificate shall not have been
exercised, which new Warrant Certificate shall in all other respects be
identical to this Warrant Certificate. The Issuer covenants and agrees that it
will pay when due any and all state and federal issue taxes which may be payable
in respect of the issuance of this Warrant Certificate or the issuance of any
Warrant Shares upon exercise of this Warrant Certificate.
(b) Cashless Exercise. In lieu of exercising this Warrant
Certificate pursuant to Section 3(a) above, the Holder shall have the right (the
"Conversion Right") to require the Issuer to convert any then existing rights to
purchase Common Stock pursuant to this Warrant Certificate, in whole or in part
and at any time or times into Warrant Shares, upon delivery of written notice of
intent to convert to the Issuer at its address in Section 3(a) or such other
address as the Issuer shall designate in a written notice to the Holder,
together with this Warrant Certificate. Upon exercise of the Conversion Right,
the Issuer shall deliver to the Holder (without payment by the Holder of any
Exercise Price) that number of Warrant Shares which is equal to the quotient
obtained by dividing (x) the value of the number of Warrant Shares with respect
to which the Conversion Right is being exercised (determined by subtracting the
aggregate Exercise Price for the Warrant Shares with respect to which the
Conversion Right is being exercised from a number equal to the product of (i)
the Fair Market Value per Share of Common Stock (as determined in accordance
with subsection (b) of Section 9 hereof) as at such time, multiplied by (ii) the
number of Warrant Shares with respect to which the Conversion Right is being
exercised), by (y) such Fair Market Value per Share. Any references in this
Warrant Certificate to the "exercise" of this Warrant Certificate, and the use
of the term exercise herein, shall be deemed to include (without limitation) any
exercise of the Conversion Right.
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4. Covenants and Conditions. The above provisions are subject to
the following:
4.1. Neither this Warrant Certificate nor the Warrant Shares
have been registered under the Securities Act of 1933, as amended ("Securities
Act") or any state securities laws ("Blue Sky Laws"). This Warrant Certificate
has been acquired for investment purposes and not with a view to distribution or
resale and may not be pledged, hypothecated, sold, made subject to a security
interest, or otherwise transferred without (i) an effective registration
statement under the Securities Act and such applicable Blue Sky Laws, or (ii) an
opinion of counsel, which counsel shall be reasonably satisfactory to the
Issuer, that registration is not required under the Securities Act or under any
applicable Blue Sky Laws (the Issuer hereby acknowledges that King & Spalding is
acceptable counsel). Transfer of Warrant Shares issued upon the exercise of this
Warrant Certificate shall be restricted in the same manner and to the same
extent as the Warrant Certificate and the certificates representing such Warrant
Shares shall bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW
AND MAY NOT BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT
UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL
HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) IN THE
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER,
REGISTRATION UNDER SUCH ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER.
The Holder and the Issuer agree to execute such other documents and instruments
as counsel for the Issuer reasonably deems necessary to effect the compliance of
the issuance of this Warrant Certificate and any shares of Common Stock issued
upon exercise hereof with applicable federal and state securities laws.
4.2. The Issuer covenants and agrees that all Warrant Shares
which may be issued upon exercise of this Warrant Certificate will, upon
issuance and payment therefor, be legally and validly issued and outstanding,
fully paid and nonassessable, free from all taxes, liens, charges and preemptive
rights, if any, with respect thereto or to the issuance thereof. The Issuer
shall at all times reserve and keep available for issuance upon the exercise of
this Warrant Certificate such number of authorized but unissued shares of Common
Stock as will be sufficient to permit the exercise in full of this Warrant
Certificate.
5. Adjustment of Exercise Price and Number of Shares Issuable.
The Exercise Price and the number of Warrant Shares (or other securities or
property) issuable upon exercise of this Warrant Certificate shall be subject to
adjustment from time to time upon the occurrence of any of the events enumerated
in this Section 5.
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(a) Common Stock Reorganization. If the Issuer shall
subdivide its outstanding shares of common stock (or any class thereof) into a
greater number of shares or consolidate its outstanding shares of common stock
(or any class thereof) into a smaller number of shares (any such event being
called a "Common Stock Reorganization"), then (a) the Exercise Price shall be
adjusted, effective immediately after the effective date of such Common Stock
Reorganization, to a price determined by multiplying the Exercise Price in
effect immediately prior to such effective date by a fraction, the numerator of
which shall be the number of shares of common stock outstanding on such
effective date before giving effect to such Common Stock Reorganization and the
denominator of which shall be the number of shares of common stock outstanding
after giving effect to such Common Stock Reorganization, and (b) the number of
shares of Common Stock subject to purchase upon exercise of this Warrant
Certificate shall be adjusted, effective at such time, to a number determined by
multiplying the number of shares of Common Stock subject to purchase immediately
before such Common Stock Reorganization by a fraction, the numerator of which
shall be the number of shares of common stock outstanding after giving effect to
such Common Stock Reorganization and the denominator of which shall be the
number of shares of common stock outstanding immediately before such Common
Stock Reorganization.
(b) Common Stock Distribution. If the Issuer shall issue,
sell or otherwise distribute any shares of common stock, other than pursuant to
a Common Stock Reorganization (which is governed by subsection (a) hereof) (any
such event, including any event described in subsections (c) and (d) below,
being herein called a "Common Stock Distribution"), for a consideration per
share less than the Fair Market Value per Share of Common Stock on the date of
such issuance, sale or distribution, then, effective upon such Common Stock
Distribution, the Exercise Price shall be reduced, to the price determined by
dividing (A) an amount equal to the sum of (1) the number of shares of common
stock outstanding immediately prior to such Common Stock Distribution
(calculated on a fully-diluted basis) multiplied by the Exercise Price
immediately prior to such Common Stock Distribution, plus (2) the consideration,
if any, received by the Issuer upon such Common Stock Distribution by (B) the
total number of shares of common stock outstanding immediately after such Common
Stock Distribution. If any Common Stock Distribution shall require an adjustment
to the Exercise Price pursuant to the foregoing provisions of this subsection
(b), including by operation of subsection (c) or (d) below, then, effective at
the time such adjustment is made, the number of shares of Common Stock subject
to purchase upon exercise of this Warrant Certificate shall be increased to a
number determined by multiplying the number of shares of Common Stock subject to
purchase immediately before such Common Stock Distribution by a fraction, the
numerator of which shall be the number of shares of common stock outstanding
immediately after giving effect to such Common Stock Distribution and the
denominator of which shall be the sum of the number of shares outstanding
immediately before giving effect to such Common Stock Distribution (both
calculated on a fully-diluted basis) plus the number of shares of common stock
which the aggregate consideration received by the Issuer with respect to such
Common Stock Distribution would purchase at a price equal to the Exercise Price
immediately prior to such Common Stock Distribution.
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(c) Option Securities. If the Issuer shall issue, sell,
distribute or otherwise grant in any manner any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, common stock or any
stock or securities convertible into or exchangeable for common stock (such
rights, warrants or options being herein called "Option Securities" and such
convertible or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Option Securities or the rights to convert or
exchange any such Convertible Securities in respect of such Option Securities
are immediately exercisable, and the price per share for which common stock is
issuable upon the exercise of such Option Securities or upon conversion or
exchange of such Convertible Securities in respect of such Option Securities
(determined by dividing (i) the aggregate amount, if any, received or receivable
by the Issuer as consideration for the granting of such Option Securities, plus
the minimum aggregate amount of additional consideration payable to the Issuer
upon the exercise of all such Option Securities, plus, in the case of Option
Securities to acquire Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issuance or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of common stock issuable upon the exercise of
such Option Securities or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Option Securities)
shall be less than the Fair Market Value per Share of Common Stock immediately
prior to such issuance, sale, distribution or grant, then, for purposes of
subsection (b) above, the total maximum number of shares of common stock
issuable upon the exercise of such Option Securities or upon conversion or
exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such Option Securities shall be deemed to have been issued
as of the date of granting of such Option Securities and thereafter shall be
deemed to be outstanding and the Issuer shall be deemed to have received as
consideration therefor such price per share, determined as provided above.
Except as otherwise provided in subsection (e) below, no additional adjustment
of the Exercise Price shall be made upon the actual exercise of such Option
Securities or upon conversion or exchange of such Convertible Securities.
(d) Convertible Securities. If the Issuer shall issue, sell
or otherwise distribute any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the price per
share for which common stock is issuable upon such conversion or exchange
(determined by dividing (i) the aggregate amount received or receivable by the
Issuer as consideration for the issuance, sale or distribution of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Issuer upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of common stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Fair Market Value per Share of Common Stock immediately prior to
the date of such issuance, sale or distribution, then, for purposes of
subsection (b) above, the total maximum number of shares of common stock
issuable upon conversion or exchange of all such Convertible Securities shall be
deemed to have been issued as of the date of the issuance, sale or distribution
of such Convertible Securities and thereafter shall be deemed to be outstanding
and the Issuer shall be deemed to have received as consideration therefor such
price per share, determined as provided above. Except as otherwise provided in
subsection (e) below, no additional adjustment of the Exercise Price shall be
made upon the actual conversion or exchange of such Convertible Securities.
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(e) Special Adjustments. If (i) the purchase price provided
for in any Option Securities referred to in subsection (c) above or the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subsection (c) or (d) above or the rate at
which any Convertible Securities referred to in subsection (c) or (d) above are
convertible into or exchangeable for common stock shall change at any time, or
(ii) any of such Option Securities or Convertible Securities shall have
terminated, lapsed or expired prior to exercise, exchange or conversion, the
Exercise Price then in effect shall forthwith be readjusted (effective only with
respect to any exercise of this Warrant Certificate after such readjustment) to
the Exercise Price which would then be in effect had the adjustment made upon
the issuance, sale, distribution or grant of such Option Securities or
Convertible Securities been made based upon such changed purchase price,
additional consideration or conversion rate, as the case may be (in the case of
any event referred to in clause (i) of this subsection (e)) or had such
adjustment not been made (in the case of any event referred to in clause (ii) of
this subsection (e)).
(f) Dividends Payable in Common Stock, Option Securities or
Convertible Securities. If the Issuer shall pay a dividend or make any other
distribution upon any capital stock of the Issuer payable in common stock,
Option Securities or Convertible Securities, then, for purposes of subsection
(b), (c) and (d) above, such common stock, Option Securities or Convertible
Securities shall be deemed to have been issued or sold without consideration.
(g) Consideration Received. If any shares of common stock,
Option Securities or Convertible Securities shall be issued, sold or distributed
for cash, the consideration received therefor shall be deemed to be the amount
received by the Issuer therefor. If any shares of common stock, Option
Securities or Convertible Securities shall be issued, sold or distributed for a
consideration other than cash, the amount of the consideration other than cash
received by Issuer shall be deemed to be the fair market value of such
consideration as determined by the Issuer's board of directors in its good faith
discretion . If any shares of common stock, Option Securities or Convertible
Securities shall be issued in connection with any merger in which Issuer is the
surviving corporation, the amount of consideration therefor shall be deemed to
be the fair market value of such portion of the assets and business of the
non-surviving corporation as shall be attributable to such common stock, Option
Securities or Convertible Securities, as the case may be, as determined by the
Issuer's board of directors in its good faith discretion. If any Option
Securities shall be issued in connection with the issuance and sale of other
securities of the Issuer, together comprising one integral transaction in which
no specific consideration is allocated to such Option Securities by the parties
thereto, such allocation will be made for purposes of this Warrant Certificate
by the Issuer's board of directors in its good faith discretion.
(h) Capital Reorganizations. If there shall be any
consolidation, merger or amalgamation of the Issuer with another entity or any
acquisition of common stock of the Issuer by means of a share exchange (other
than a consolidation, merger or share exchange in which the Issuer is the
continuing corporation and which does not result in any reorganization,
recapitalization or reclassification of, or change in, outstanding shares of
common stock), or any sale or conveyance of the property of the Issuer as an
entirety or substantially as an entirety, or any reorganization or
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recapitalization of the Issuer (any such event being called a "Capital
Reorganization"), then, effective upon such Capital Reorganization, the holder
of this Warrant Certificate shall no longer have the right to purchase Common
Stock, but shall have instead the right to purchase, upon exercise of this
Warrant Certificate, the kind and amount of shares of stock and other securities
and property (including cash) which the holder would have owned or have been
entitled to receive pursuant to such Capital Reorganization if this Warrant
Certificate had been exercised immediately prior to such Capital Reorganization.
(i) Special Adjustment if Notes not Repaid Prior to September
21, 1999. If the outstanding principal amount of the Notes, together with all
accrued and unpaid interest thereon, has not been repaid in full on or prior to
September 21, 1999, the aggregate amount of Warrant Shares issuable upon
exercise of this Warrant pursuant to Section 3(a) shall be increased to equal
the product of (x) the number of shares issuable upon exercise of this Warrant
Certificate pursuant to Section 3(a) hereof immediately prior to such date,
multiplied by (y) two (2); such that absent any other adjustments required under
this Section 5 prior to such date the aggregate number of Warrant Shares
issuable pursuant to Section 3(a) hereof would be increased on such date to
500,000 shares of Common Stock. In the event the provisions of this Section 5(i)
shall apply, no adjustment shall be made in the Exercise Price as a result of
any such increase.
(j) Adjustment Rules. Any adjustments pursuant to this
Section 5 shall be made successively whenever an event referred to herein shall
occur, except that, notwithstanding any other provision of this Section 5, no
adjustment shall be made to the number of shares of Common Stock to be delivered
to the holder of this Warrant Certificate (or to the Exercise Price) if such
adjustment represents less than 1% of the number of shares previously required
to be so delivered, but any lesser adjustment shall be carried forward and shall
be made at the time and together with the next subsequent adjustment which
together with any adjustments so carried forward shall amount to 1% or more of
the number of shares to be so delivered. No adjustment shall be made pursuant to
this Section 5 in respect of the issuance from time to time of shares of common
stock upon the exercise of any of the Warrant Certificates issued pursuant to
the Note Agreement or upon the exercise or conversion of any other Option
Securities or Convertible Securities issued or outstanding on the date hereof.
6. Transfer of Warrant Certificate. Subject to the provisions of
Section 4 hereof, this Warrant Certificate may be transferred, in whole or in
part, by presentation of the Warrant Certificate to the Issuer with written
instructions for such transfer. Upon such presentation for transfer, the Issuer
shall promptly execute and deliver a new Warrant Certificate or Warrant
Certificates in the form hereof in the name of the assignee or assignees and in
the denominations specified in such instructions.
7. Warrant Holder Not Shareholder. Except as otherwise provided
herein, this Warrant Certificate does not confer upon the Holder, as such, any
right whatsoever as a shareholder of the Issuer.
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8. Note and Warrant Purchase Agreement. This Warrant Certificate
is issued pursuant to that certain Note and Warrant Purchase Agreement dated as
of June 21, 1999, by and among the Issuer and the Purchasers named therein (such
Note and Warrant Purchase Agreement, together with all amendments and
modifications thereto, the "Note Agreement"). Capitalized terms used but not
otherwise defined in this Warrant Certificate shall have the respective meanings
given them in the Note Agreement. Reference is made to the Note Agreement for
all pertinent purposes, and this Warrant Certificate shall be entitled to all of
the benefits afforded to the Warrant Certificates and the holders thereof by the
Note Agreement and the other Transaction Documents.
9. Determination of Fair Market Value per Share.
(a) Subject to the provisions of subsection (b) of this Section
9, each determination of Fair Market Value per Share shall be made in good faith
by the board of directors of the Issuer. Upon each such determination of Fair
Market Value per Share, the Issuer shall promptly give notice thereof to the
Holder setting forth in reasonable detail the calculation of such Fair Market
Value per Share (the "Issuer Determination").
(b) If the Holders shall disagree with the Issuer Determination
and shall give notice thereof to the Issuer given within thirty (30) days after
the Issuer's notice of the Issuer Determination, then the Fair Market Value per
Share shall be an amount equal to the average of the Quoted Prices for Common
Stock of the Issuer for the thirty (30) consecutive trading days commencing
forty-five (45) trading days before the date of determination. The "Quoted
Price" of Common Stock for each day means the last reported sales price of
Common Stock on such day as reported by NASDAQ or, if Common Stock is listed on
a national securities exchange, the last reported sales price of Common Stock on
such exchange (which shall be for consolidated trading if applicable to such
exchange) on such day, or if not so reported or listed, the average of the last
reported bid and asked prices of Common Stock on such day, in each case as
appropriately adjusted for any stock splits or reverse stock splits occurring
after the Closing Date.
10. Fractional Interests. The Issuer shall not be required to
issue fractional Warrant Shares on the exercise of this Warrant Certificate. If
any fraction of the Warrant Shares would be issuable on the exercise of this
Warrant Certificate (or specified portion thereof), the Issuer shall pay an
amount in cash equal to the Fair Market Value per Share on the day immediately
preceding the date this Warrant Certificate is presented for exercise,
multiplied by such fraction.
11. Governing law. THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
IN WITNESS WHEREOF, the parties hereto have set their hands as of
the date first above written.
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XXXXXXX COMMUNICATIONS CORPORATION,
an Iowa corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO STOCK PURCHASE WARRANT]
