THIS WARRANT (THIS "WARRANT") HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF NOR ANY INTEREST OR...
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EXHIBIT 10.125
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THIS WARRANT (THIS "WARRANT") HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. NEITHER
THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED,
MORTGAGED, PLEDGED, HYPOTHECATED, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE ACT AND APPLICABLE STATE SECURITIES LAWS.
USURF AMERICA, INC.
WARRANT
Warrant No. FCC-001 Original Issue Date: January 01, 2001
This Warrant is issued in connection with and pursuant to that certain
Common Stock Purchase Agreement (the "Purchase Agreement") dated as of
April 25, 2001, by and between USURF AMERICA, INC., a Nevada corporation
(the "Company"), and FUSION CAPITAL FUND II, LLC (the "Buyer").
FOR VALUE RECEIVED, the Buyer, the registered holder hereof, or its
permitted assigns (the "Holder"), is entitled to purchase from the Company,
during the period specified in this Warrant, 215,000 fully paid and
non-assessable shares (subject to adjustment as hereinafter provided) of
Common Stock (the "Warrant Shares"), of the Company at the purchase price
per share provided in Section 1.2 of this Warrant (the "Warrant Exercise
Price"), all subject to the terms and conditions set forth in this Warrant.
All terms not otherwise defined herein shall have the meaning ascribed to
them in the Purchase Agreement.
Section 1. Period for Exercise and Exercise Price.
1.1 Period for Exercise. The right to purchase shares of Warrant Shares
represented by this Warrant shall be immediately exercisable, and shall
expire at 5:00 p.m., Chicago local time, January 01, 2006 (the "Expiration
Date"). From and after the Expiration Date this Warrant shall be null and
void and of no further force or effect whatsoever.
1.2 Warrant Exercise Price. The Warrant Exercise Price per share of
Warrant Shares shall be $0.45 per share (subject to adjustment as
hereinafter provided).
Section 2. Exercise of Warrant.
2.1 Manner of Exercise. The Holder may exercise this Warrant, in whole
or in part, immediately, but not after the Expiration Date, during normal
business hours on any business day by surrendering this Warrant to the
Company at the principal office of the Company, accompanied by a Warrant
Exercise Form in substantially the form annexed hereto duly executed by the
Buyer and by payment of the Warrant Exercise Price for the number of shares
of Warrant Shares for which this Warrant is then exercisable, either (i) in
immediately available funds, (ii) by delivery of an instrument evidencing
indebtedness owing by the Company to the Holder in the appropriate amount,
(iii) by authorizing the Company to retain shares of Common Stock which
would otherwise be issuable upon exercise of this Warrant having a fair
market value (defined as the last reported Closing Sale Price of the Common
Stock on the date immediately preceding the date of the subscription
notice) on the date of delivery equal to the aggregate Warrant Exercise
Price, or (iv) in a combination of (i), (ii) or (iii) above, provided,
however, that in no event shall the Holder be entitled to exercise this
Warrant for a number of Warrant Shares in excess of that number of Warrant
Shares which, upon giving effect to such exercise, would cause the
aggregate number of shares of Common Stock beneficially owned by the Holder
and its affiliates to exceed 9.9% of the outstanding shares of the Common
Stock following such exercise. For purposes of the foregoing proviso, the
aggregate number of shares of Common Stock beneficially owned by the Holder
and its affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which determination
of such proviso is being made, but shall exclude the shares of Common Stock
which would be issuable upon (i) exercise of the remaining, unexercised
Warrants beneficially owned by the Holder and its affiliates and (ii)
exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by the Holder and its
affiliates subject to a limitation on conversion or exercise analogous to
the limitation contained herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange Act
of 1934, as amended. The Holder may waive the foregoing limitation by
written notice to the Company upon not less than 61 days prior written
notice (with such waiver taking effect only upon the expiration of such 61
day notice period). 2.2 When Exercise Effective. Each exercise of this
Warrant shall be deemed to have been effected on the day on which all
requirements of Section 2.1 shall have been met with respect to such
exercise. At such time the person in whose name any certificate for shares
of Warrant Shares shall be issuable upon such exercise shall be deemed for
all corporate purposes to have become the Holder of record of such shares,
regardless of the actual delivery of certificates evidencing such shares.
2.3 Delivery of Stock Certificates. As soon as practicable after each
exercise of this Warrant, and in any event no later than 3 days after such
exercise, the Company at its expense will issue Warrant Shares via credit
to the Buyer's account with DTC for the number of Warrant Shares to which
such Buyer is entitled upon such Buyer's submission of the applicable
Warrant Exercise Form or, if the Transfer Agent is not participating in The
DTC Fast Automated Securities Transfer Program and DWAC system, issue and
surrender to the address as specified in the Warrant Exercise Form,, a
certificate, registered in the name of the Buyer or its designee, for the
number of shares of Common Stock to which the Buyer shall be entitled to
upon such exercise.
Section 3. Adjustment of Purchase Price and Number of Shares.
The Warrant Exercise Price and the kind of securities issuable upon
exercise of the Warrant shall be adjusted from time to time as follows:
3.1 Subdivision or Combination of Shares (Stock Splits). If the Company
at any time effects a subdivision or combination of the outstanding Common
Stock (through a stock split or otherwise), the number of shares of Warrant
Shares shall be increased, in the case of a subdivision, or the number of
shares of Warrant Shares shall be decreased, in the case of a combination,
in the same proportions as the Common Stock is subdivided or combined, in
each case effective automatically upon, and simultaneously with, the
effectiveness of the subdivision or combination which gives rise to the
adjustment.
3.2 Stock Dividends. If the Company at any time pays a dividend, or makes
any other distribution, to holders of Common Stock payable in shares of
Common Stock, or fixes a record date for the determination of holders of
Common Stock entitled to receive a dividend or other distribution payable
in shares of Common Stock, then the number of shares of Warrant Shares in
effect immediately prior to such action shall be proportionately increased
so that the Holder hereof may receive upon exercise of the Warrant the
aggregate number of shares of Common Stock which he or it would have owned
immediately following such action if the Warrant had been exercised
immediately prior to such action. The adjustment shall become effective
immediately as of the date the Company shall take a record of the holders
of its Common Stock for the purpose of receiving such dividend or
distribution (or if no such record is taken, as of the effectiveness of
such dividend or distribution).
3.3 Reclassification, Consolidation or Merger. If at any time, as a
result of:
(a) a capital reorganization or reclassification (other than a
subdivision, combination or dividend provided for elsewhere in this Section
3), or
(b) a merger or consolidation of the Company with another corporation
(whether or not the Company is the surviving corporation), the Common Stock
issuable upon exercise of the Warrants shall be changed into or exchanged
for the same or a different number of shares of any class or classes of
stock of the Company or any other corporation, or other securities
convertible into such shares, then, as a part of such reorganization,
reclassification, merger or consolidation, appropriate adjustments shall be
made in the terms of the Warrants (or of any securities into which the
Warrants are exercised or for which the Warrants are exchanged), so that:
(y) the Holders of Warrants or of such substitute securities shall
thereafter be entitled to receive, upon exercise of the Warrants or of such
substitute securities, the kind and amount of shares of stock, other
securities, money and property which such Holders would have received at
the time of such capital reorganization, reclassification, merger, or
consolidation, if such Holders had exercised their Warrants immediately
prior to such capital reorganization, reclassification, merger, or
consolidation, and
(z) the Warrants or such substitute securities shall thereafter be
adjusted on terms as nearly equivalent as may be practicable to the
adjustments theretofore provided in this Section 3.3. No consolidation or
merger in which the Company is not the surviving corporation shall be
consummated unless the surviving corporation shall agree, in writing, to
the provisions of this Section 3.3. The provisions of this Section 3.3
shall similarly apply to successive capital reorganizations,
reclassifications, mergers and consolidations.
3.4 Other Action Affecting Common Stock. If at any time the Company takes
any action affecting its Common Stock, other than an action described in
any of Sections 3.1 - 3.3 which, in the opinion of the Board of Directors
of the Company (the "Board"), would have an adverse effect upon the
exercise rights of the Warrants, the Warrant Exercise Price or the kind of
securities issuable upon exercise of the Warrants, or both, shall be
adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances; provided, however, that the
purpose of this Section is to prevent the Company from taking any action
which has the effect of diluting the number of shares of Warrant Shares
issuable upon exercise of this Warrant.
3.5 Notice of Adjustment Events. Whenever the Company contemplates the
occurrence of an event which would give rise to adjustments under this
Section 3, the Company shall mail to each Warrant Holder, at least 20 days
prior to the record date with respect to such event or, if no record date
shall be established, at least 20 days prior to such event, a notice
specifying (i) the nature of the contemplated event, and (ii) the date on
which any such record is to be taken for the purpose of such event, and
(iii) the date on which such event is expected to become effective, and
(iv) the time, if any is to be fixed, when the holders of record of Common
Stock (or other securities) shall be entitled to exchange their shares of
Common Stock (or other securities) for securities or other property
deliverable in connection with such event.
3.6 Notice of Adjustments. Whenever the kind or number of securities
issuable upon exercise of the Warrants, or both, shall be adjusted pursuant
to Section 3, the Company shall deliver a certificate signed by its Chief
Executive Officer and by its Chief Financial Officer, setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board made any determination
hereunder), and the Warrant Exercise Price and the kind of securities
issuable upon exercise of the Warrants after giving effect to such
adjustment, and shall cause copies of such certificate to be mailed (by
first class mail postage prepaid) to each Warrant Holder promptly after
each adjustment.
Section 4. Reservation of Stock, etc.
The Company covenants and agrees that it will at all times have
authorized, reserve and keep available, solely for issuance and delivery
upon the exercise of this Warrant, the number of shares of Warrant Shares
from time to time issuable upon the exercise of this Warrant. The Company
further covenants and agrees that this Warrant is, and any Warrants issued
in substitution for or replacement of this Warrant and all Warrant Shares,
will upon issuance be duly authorized and validly issued and, in the case
of Warrant Shares, upon issuance will be fully paid and non-assessable and
free from all preemptive rights of any stockholder, and from all taxes,
liens and charges with respect to the issue thereof (other than transfer
taxes) and, if the Common Stock of the Company is then listed on any
national securities exchanges (as defined in the Exchange Act of 1934, as
amended (the "Exchange Act")) or quoted on NASDAQ, shall be, subject to the
restrictions set forth in Section 5, duly listed or quoted thereon, as the
case may be. In the event that the number of authorized but unissued shares
of such Common Stock shall not be sufficient to effect the exercise of this
entire Warrant into Warrant Shares, then in addition to such other remedies
as shall be available to the Holder of this Warrant, the Company shall
promptly take such corporate action as may be necessary to increase its
authorized but unissued shares of such Common Stock to such number of
shares as shall be sufficient for such purpose.
Section 5. Ownership, Transfer and Substitution of Warrants.
5.1 Ownership of Warrants. The Company may treat the person in whose name
any Warrant is registered on the register kept at the principal office of
the Company as the owner and Holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events recognizing
any transfers made in accordance with the terms of this Warrant.
5.2 Transfer and Exchange of Warrants. Upon the surrender of any Warrant,
properly endorsed, for registration of transfer or for exchange at the
principal office of the Company, the Company at its expense will execute
and deliver to the Holder thereof, upon the order of such Holder, a new
Warrant or Warrants of like tenor, in the name of such Holder or as such
Holder may direct, for such number of shares with respect to each such
Warrant, the aggregate number of shares in any event not to exceed the
number of shares for which the Warrant so surrendered had not been exercised.
5.3 REGISTRATION RIGHTS. THE HOLDER OF THIS WARRANT IS ENTITLED TO
CERTAIN REGISTRATION RIGHTS WITH RESPECT TO THE WARRANT SHARES ISSUABLE
UPON EXERCISE THEREOF. SAID REGISTRATION RIGHTS ARE SET FORTH IN A
REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN THE BUYER AND THE COMPANY
DATED AS OF APRIL 25, 2001.
5.4 Exemption from Registration. If an opinion of counsel provides that
registration is not required for the proposed exercise or transfer of this
Warrant or the proposed transfer of the Warrant Shares and that the
proposed exercise or transfer in the absence of registration would require
the Company to take any action including executing and filing forms or
other documents with the Securities and Exchange Commission (the "SEC") or
any state securities agency, or delivering to the Holder any form or
document in order to establish the right of the Holder to effectuate the
proposed exercise or transfer, the Company agrees promptly, at its expense,
to take any such action; and provided, further, that the Company will
reimburse the Holder in full for any expenses (including but not limited to
the fees and disbursements of such counsel, but excluding brokers'
commissions) incurred by the Holder or owner of Warrant Shares on his, her
or its behalf in connection with such exercise or transfer of the Warrant
or transfer of Warrant Shares.
Section 6. No Rights or Liabilities as Shareholder.
Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof any rights as a shareholder of the Company or as imposing
any liabilities on such holder to purchase any securities or as a
shareholder of the Company, whether such liabilities are asserted by the
Company or by creditors of the Company.
Section 7. Rule 144 Sales.
At the request of any Holder who proposes to sell securities in compliance
with Rule 144 of the SEC, the Company will (i) forthwith furnish to such
Holder a written statement of compliance with the filing requirements of
the SEC as set forth in Rule 144, as such rules may be amended from time to
time and (ii) make available to the public and such Holder such information
as will enable the Holder to make sales pursuant to Rule 144.
Section 8. Miscellaneous.
8.1 Amendment and Waiver. This Warrant may be amended with, and only
with, the written consent of the Company and the Holder. Any waiver of any
term, covenant, agreement or condition contained in this Warrant shall not
be deemed a waiver of any other term, covenant, agreement or condition, and
any waiver of any default in any such term, covenant, agreement or
condition shall not be deemed a waiver of any later default thereof or of
any default of any other term, covenant, agreement or condition.
8.2 Representations and Warranties to Survive Closing. All
representations, warranties and covenants contained herein shall survive
the execution and delivery of this Warrant and the issuance of any Warrant
Shares upon the exercise hereof.
8.3 Severability. In the event that any court or any governmental
authority or agency declares all or any part of any Section of this Warrant
to be unlawful or invalid, such unlawfulness or invalidity shall not serve
to invalidate any other Section of this Warrant, and in the event that only
a portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of
such Section.
8.4 Binding Effect; No Third Party Beneficiaries. All provisions of this
Warrant shall be binding upon and inure to the benefit of the parties and
their respective heirs, legatees, executors, administrators, legal
representatives, successors, and permitted transferees and assigns. No
person other than the holder of this Warrant and the Company shall have any
legal or equitable right, remedy or claim under or in respect of, this
Warrant.
8.5 Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Warrant must be
in writing and will be deemed to have been delivered: (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Trading Day
after deposit with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
If to the Company:
USURF America, Inc.
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
With a copy to:
Xxxxxx & Xxxxxx
000 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxx
If to the Buyer:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
If to the Transfer Agent:
Securities Transfer Corporation
0000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, Xx.
or at such other address and/or facsimile number and/or to the attention of
such other person as the recipient party has specified by written notice
given to each other party three (3) Trading Days prior to the effectiveness
of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the
time, date, and recipient facsimile number or (C) provided by a nationally
recognized overnight delivery service, shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii)
or (iii) above, respectively.
8.6 Taxes, Costs and Expenses. The Company covenants and agrees that it
will pay when due and payable any and all federal, state and local taxes
(other than income taxes) and any other costs and expenses which may be
payable in respect of the preparation, issuance, delivery, exercise,
surrender or transfer of this Warrant pursuant to the terms of this Warrant
or the issuance of any shares of Warrant Shares as a result thereof. If any
suit or action is instituted or attorneys employed to enforce this Warrant
or any part thereof, the Company promises and agrees to pay all costs and
expenses associated therewith, including reasonable attorneys' fees and
court costs.
8.7 Governing Law; Jurisdiction; Jury Trial. The corporate laws of the
State of Nevada shall govern all issues concerning the relative rights of
the Company and its shareholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant
shall be governed by the internal laws of the State of Illinois, without
giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State
of Illinois. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
Chicago, for the adjudication of any dispute hereunder or under the other
Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any
manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT
MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
8.8 Loss of Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of indemnification
in form and substance acceptable to the Company in its reasonable
discretion, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver a new Warrant of like
tenor and date.
8.9 Entire Agreement. This Warrant, the Purchase Agreement and the
Registration Rights Agreement of even date herewith represent the entire
agreement and understanding between the parties concerning the subject
matter hereof and supercede all prior and contemporaneous agreements,
understandings, representations and warranties with respect thereto.
8.10 Headings. The headings used herein are used for convenience only and
are not to be considered in construing or interpreting this Warrant.
COMPANY:
USURF AMERICA, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President
<PAGE>
WARRANT EXERCISE FORM
Date: ________________
_____________________
_____________________
_____________________
Ladies and Gentlemen:
The undersigned, being the registered holder of your Warrant number
_____________ accompanying this letter, hereby irrevocably exercises such
Warrant for __________ shares of Warrant Shares (as defined in said
Warrant), and herewith makes payment therefor in the amount of
($___________ )(via "cash-less exercise" in accordance with the Warrant),
and requests that such shares of Warrant Shares be issued in the name of,
and delivered to (the undersigned) (_________________________), at the
address shown below the signature line hereof.
If said number of shares shall not be all the shares issuable upon exercise
of the attached Warrant, a new Warrant is to be issued in the name of the
undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
_____________________________________
Printed Name of Registered Warrant Holder
_____________________________________
Signature of Registered Warrant Holder
_____________________________________
_____________________________________
_____________________________________
Address
<PAGE>
FORM OF COMPANY CONFIRMATION OF WARRANT EXERCISE
Reference is made to the Common Stock Purchase Agreement (the "Common
Stock Purchase Agreement") between USURF AMERICA, INC. (the "Company") and
FUSION CAPITAL FUND II, LLC dated April 25, 2001. In accordance with and
pursuant to the Common Stock Purchase Agreement, the Company has issued to
FUSION CAPITAL FUND II, LLC a Warrant to Purchase 215,000 shares of common
stock, par value $.0001 per share (the "Common Stock") of the Company. The
undersigned hereby confirms that FUSION CAPITAL FUND II, LLC has exercised
the Warrant to purchase ________________ shares of Common stock and
authorizes the issuance of ______________ shares of common stock, par value
$.0001 per share (the "Common Stock") of the Company, in connection with
the Warrant Exercise Notice Specifically, the Company hereby confirms the
following information:
Number of shares of Common Stock to be issued: _____________________
Remaining Number of shares Subject to Exercise: ______________________
Exercise Price: $.45/share of Common Stock (Subject to Adjustment pursuant
to the Warrant)
The shares of Common Stock shall be issued in the name and to the address
as set forth in the applicable Warrant Exercise Notice.
Authorized Signature: ________________________
Name: ________________________
Title: ________________________
Phone #: ________________________
Fax #: ________________________
