Contract
EXHIBIT
4.1
THIS
WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR
UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE MADE WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE
ACT, OR APPLICABLE STATE SECURITIES LAWS.
AMERICAN
TELECOM SERVICES, INC.
WARRANT
TO PURCHASE
____________
SHARES
OF
COMMON STOCK
(Void
after January 30, 2012)
No:
PP-
This
certifies that for value, ________________________,
or
its
registered assigns (the “Holder”),
is
entitled, subject to the terms set forth below, at any time from and after
January 30, 2007 (the “Original
Issue Date”)
and
before 5:00 p.m., Eastern Time, on January 30, 2012 (the “Expiration
Date”),
to
purchase from American
Telecom Services, Inc.,
a
Delaware corporation (the “Corporation”),
__________________________
(__________) shares
of
Common Stock (as defined in Section
22
below)
of the Corporation, upon surrender hereof, at the Principal Office of the
Corporation referred to below, with a duly executed subscription form in the
form attached hereto as Exhibit A
and
simultaneous payment therefor in lawful, immediately available money of the
United States or otherwise as hereinafter provided, at an initial exercise
price
per share of $4.25 (the “Purchase
Price”).
The
Purchase Price and the number of shares of Common Stock issuable upon exercise
of this Warrant are subject to further adjustment as provided in Section
4
below.
The term “Warrant,”
as
used herein, shall mean this Warrant and any other Warrants delivered in
substitution or exchange therefor as provided herein.
This
Warrant is one of a series (collectively the “Warrants”)
issued
in connection with the Corporation’s sale of its Series A 8% Cumulative
Convertible Preferred Stock (the “Series
A Preferred Stock”)
to
“accredited investors” pursuant to Subscription Agreements (the “Offering”).
1. Exercise.
This
Warrant may be exercised at any time or from time to time from and after the
Original Issue Date and before the Expiration Date on any business day (an
“Exercise
Date”),
for
the full number of shares of Common Stock called for hereby, by surrendering
it
at the principal office of the Corporation, at 0000 Xxxx Xxxx, Xxxx xx Xxxxxxxx,
Xxxxxxxxxx 00000 (the “Principal
Office”),
with
the subscription form duly executed, together with payment in an amount equal
to
(a) the number of shares of Common Stock called for hereby, multiplied
(b) by the Purchase Price. Payment of the Purchase Price may be made at
Holder’s choosing either: (1) by payment in immediately available funds; or (2)
in lieu of any cash payment, in exchange for the number of shares of Common
Stock equal to the product of (x) the number of shares for which the Warrant
is
being exercised multiplied by (y) a fraction, the numerator of which is the
Purchase Price and the denominator of which is the Fair Market Value (as defined
below). This Warrant may be exercised for less than the full number of shares
of
Common Stock at the time called for hereby, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the sum payable
upon the exercise of this Warrant as a whole, shall be proportionately reduced.
Upon a partial exercise of this Warrant in accordance with the terms hereof,
this Warrant shall be surrendered, and a new Warrant of the same tenor and
for
the purchase of the number of such shares not purchased upon such exercise
shall
be issued by the Corporation to the Holder without any charge therefor. A
Warrant shall be deemed to have been exercised immediately prior to the close
of
business on the Exercise Date and the Person(s) (as defined in Section
22)
entitled to receive the shares of Common Stock issuable upon such exercise
shall
be treated for all purposes as the holder of such shares of record as of the
close of business on such date. Within two (2) business days after such date,
the Corporation shall issue and deliver to the Person(s) entitled to receive
the
same a certificate or certificates for the number of full shares of Common
Stock
issuable upon such exercise (with such whole number of shares being determined
taking into consideration any other Warrants being simultaneously exercised
by
such Holder), together with cash, in lieu of any fraction of a share, equal
to
such fraction of the then Fair Market Value of one full share of Common Stock
as
of the Exercise Date. “Fair
Market Value”
as used
in this Section
1
shall
mean the Closing Sales Price of the Common Stock on the Trading Date immediately
preceding any Exercise Date (as such each of such terms is defined in
Section
22
below).
Notwithstanding anything to the contrary contained in this Warrant, under no
circumstances shall the Corporation be required to net cash settle the exercise
of this Warrant.
2. Shares
Fully Paid; Payment of Taxes.
All
shares of Common Stock issued upon the exercise of this Warrant shall be validly
issued, fully paid and non-assessable.
3. Transfer
and Exchange.
(a)
Neither this Warrant nor the shares of Common Stock to be issued upon exercise
hereof (the “Warrant
Shares”)
have
been registered under the Act or any Blue Sky Laws (as such terms are defined
in
Section
22
below).
This Warrant has been acquired, and the Warrant Shares, when issued, shall
have
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 for such Warrant or Warrant Shares under the Act and any applicable
Blue Sky Laws; or (ii) an opinion of counsel reasonably satisfactory to the
Corporation that registration is not required under the Act or under any
applicable Blue Sky Laws.
-2-
(b) Upon
compliance with applicable federal and state securities laws as set forth in
Section
3(a),
above,
this Warrant and all rights hereunder are transferable, in whole or in part,
on
the books of the Corporation maintained for such purpose at its Principal Office
by the Holder in Person or by duly authorized attorney, upon surrender of this
Warrant together with a completed and executed assignment form in the form
attached hereto as Exhibit B,
and
payment of any necessary transfer tax or other governmental charge imposed
upon
such transfer. Upon any partial transfer, the Corporation will issue and deliver
to the assignee a new Warrant with respect to the shares of Common Stock for
which it is exercisable that have been transferred, and will deliver to the
Holder a new Warrant or Warrants with respect to the shares of Common Stock
not
so transferred. A Warrant may be transferred only by the procedure set forth
herein. No transfer shall be effective until such transfer is recorded on the
books of the Corporation, provided that such transfer is recorded promptly
by
the Corporation, and until such transfer on such books, the Corporation shall
treat the registered Holder hereof as the owner of the Warrant for all
purposes.
(c) This
Warrant is exchangeable at the Principal Office for two or more new Warrants,
each in the form of this Warrant, to purchase the same aggregate number of
shares of Common Stock, each new Warrant to represent the right to purchase
such
number of shares as the Holder shall designate at the time of such exchange,
but
which shall not exceed the total number of shares for which this Warrant may
be
from time to time exercisable. Two or more Warrants may also be combined into
a
single Warrant by delivery of the Warrants to be combined to the Corporation
at
the Principal Office.
(d) Transfer
of the Warrant Shares issued upon the exercise of this Warrant shall be
restricted in the same manner and to the same extent as the Warrant, and the
certificates representing such Warrant Shares shall bear substantially the
following legend, until such Warrant Shares have been registered under the
Act
or may be removed as otherwise permitted under the Act:
“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
SATISFACTORY TO THE CORPORATION, REGISTRATION UNDER THE ACT OR SUCH APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER.”
(e) The
Holder and the Corporation agree to execute such other documents and instruments
as counsel to the Corporation reasonably deems necessary to effect the
compliance of the issuance of this Warrant and any Warrant Shares issued upon
exercise hereof
-3-
with
applicable federal and state securities laws, including compliance with
applicable exemptions from the registration requirements of such
laws.
4. Adjustment
of Purchase Price.
(a)
Adjustment
for Stock Dividend.
In case
the Corporation shall pay or make a dividend or other distribution to all
holders of its Common Stock payable in shares of Common Stock, the Purchase
Price in effect at the opening of business on the day next following the date
fixed for the determination of stockholders entitled to receive such dividend
or
other distribution shall be reduced by multiplying such Purchase Price by a
fraction, of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination,
and the denominator shall be the sum of the numerator and the total number
of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day next
following the date fixed for such determination. For the purposes of this
Section 4(a), the number of shares of Common Stock at any time outstanding
shall
not include shares of Common Stock held in the treasury of the Corporation.
The
Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(b) Adjustment
for Splits.
In case
the outstanding shares of Common Stock shall be subdivided into a greater number
of shares of Common Stock, the Purchase Price in effect at the opening of
business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and, conversely, in case the
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Purchase Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as
the
case may be, to become effective immediately after the opening of business
on
the day following the day upon which such subdivision or combination becomes
effective.
(c) Adjustment
for Sales of Additional Stock below Purchase Price.
In case
the Corporation shall at any time after the Original Issue Date issue, grant
or
sell any Additional Stock (as defined below) for a consideration, exercise
or
conversion price per share less than the Purchase Price in effect immediately
prior to the issuance or sale of such Additional Stock, or without
consideration, then forthwith upon such issuance or sale, the Purchase Price
shall be adjusted immediately thereafter so that it shall equal the price
determined by multiplying the Purchase Price in effect immediately prior thereto
by a fraction, (i) the numerator of which shall be the sum of (A) the number
of
shares of Common Stock outstanding (treating any convertible securities,
outstanding options and outstanding warrants on an as-exercised, as-converted
basis) immediately prior to the issuance of such Additional Stock and (B) the
number of shares of Common Stock which the aggregate consideration received
for
the issuance of such Additional Stock would purchase at the Purchase Price
in
effect immediately prior to the issuance of such Additional Stock, and (ii)
the
denominator of which shall be the number of shares of Common Stock outstanding
(treating any convertible securities, outstanding options and outstanding
warrants as aforesaid) immediately after the issuance of such Additional Stock.
For
the
purposes of this Section
4(c),
“Additional
Stock”
means
shares of Common Stock or options, warrants or other rights to acquire or
securities convertible into or
-4-
exchangeable
for shares of Common Stock, including shares held in the Corporation’s treasury,
and shares of Common Stock issued upon the exercise of any options, rights
or
warrants to subscribe for shares of Common Stock and shares of Common Stock
issued upon the direct or indirect conversion or exchange of securities for
shares of Common Stock, other than:
(i) Common
Stock issued or issuable upon conversion of the Series A Preferred Stock;
(ii) Common
Stock issued or issuable upon the exercise of any Warrants;
(iii) Common
Stock issued or issuable upon the exercise of purchase, conversion or exchange
rights included in any options, warrants (inclusive of those issuable to the
Placement Agent in connection with the Offering), rights or convertible or
exchangeable securities that are outstanding as of the Original Issue
Date;
(iv) Common
Stock or options, warrants or other rights to acquire shares of Common Stock
issued pursuant to an option, stock purchase or other equity-based plan of
the
Corporation or its subsidiaries (including the Performance Accelerated
Restricted Stock Plan) that has been approved by the Corporation’s Board of
Directors (including a majority of the Independent Directors) and, to the extent
required pursuant to the Certificate of Designation for the Series A Preferred
Stock, the holders of the Series A Preferred Stock voting as a separate class;
and
(ii) Common
Stock or any rights, options or warrants to subscribe for, purchase or otherwise
acquire such shares issued to any consultant to the Corporation (as
consideration for any non-investment banking and/or merger and
acquisition-related services), provided
that if
at the time of issuance of any such shares, rights, options or warrants the
sum
of (x) the cumulative aggregate number of shares of Common Stock issued to
all
such consultants after the Original Issue Date and (y) the maximum number of
number of shares of Common Stock issuable pursuant to options or warrants issued
to such consultants after the Original Issue Date that are outstanding at such
reference time exceeds 5% of the total number of shares of Common Stock
outstanding on a fully-diluted basis as of such reference time, the number
of
shares then being issued or that are issuable upon the exercise of such rights,
options or warrants that exceeds such 5% maximum shall be deemed to constitute
Additional Stock.
For
the
purpose of any computation to be made in accordance with this Section
4(c),
the
following provisions shall apply:
(i) In
case
of the issuance or sale of shares of Additional Stock for a consideration part
or all of which shall be cash, the amount of the cash consideration therefor
shall be deemed to be the amount of cash received by the Corporation for such
shares (or, if shares of Additional Stock are offered by the Corporation for
subscription, the subscription price, or, if such securities shall be sold
to
underwriters or dealers for public offering without a subscription offering,
the
initial public offering price) before deducting therefrom any compensation
paid
or discount allowed in the sale, underwriting
-5-
or
purchase thereof by underwriters or dealers or others performing similar
services, or any expenses incurred in connection therewith.
(ii) In
the
case of the issuance or sale (otherwise than as a dividend or other distribution
on any stock of the Corporation) of shares of Series A Preferred Stock for
a
consideration part or all of which shall be other than cash, the amount of
the
consideration therefor other than cash shall be deemed to be the fair market
value of such consideration as determined in good faith by the Corporation’s
Board of Directors.
(iii) The
reclassification of securities of the Corporation other than shares of Series
A
Preferred Stock into securities including shares of Common Stock shall be deemed
to involve the issuance of such shares of Common Stock for a consideration
other
than cash immediately prior to the close of business on the date fixed for
the
determination of security holders entitled to receive such shares, and the
value
of the consideration allocable to such shares of Common Stock shall be
determined as provided in paragraph (ii) immediately preceding.
(iv) In
the
case of the issuance of options, rights, or warrants to purchase or subscribe
for shares of Common Stock, securities convertible into or exchangeable for
shares of Common Stock, or options, rights or warrants to purchase or subscribe
for any such convertible or exchangeable securities, the following provisions
shall apply:
(A) The
effective price for the issuance, grant or sale of any options, rights or
warrants shall be deemed to be the minimum purchase price per share provided
for
in such options, rights or warrants at the time of issuance plus the
consideration, if any, received by the Corporation in connection with sale
or
issuance of such options, rights or warrants; provided, however, that upon
the
termination of such options, rights or warrants, if any thereof shall not have
been exercised, the Purchase Price then in effect shall forthwith be readjusted
and thereafter be the Purchase Price that would have been in effect if such
adjustment been made on the basis of the issuance only of the shares of Common
Stock actually issued or issuable upon the exercise of those options, rights
or
warrants as to which the exercise of rights shall not have expired or terminated
unexercised.
(B) The
effective price for the issuance, grant or sale of any convertible or
exchangeable securities shall be deemed to be the consideration received by
the
Corporation in connection with the sale of such securities plus the
consideration, if any, receivable by the Corporation upon the conversion or
exchange thereof; provided, however, that upon the termination of the right
to
convert or exchange such convertible or exchangeable securities (whether by
reason of redemption or otherwise), the Purchase Price then in effect shall
forthwith be readjusted and thereafter be the Purchase Price that would have
been in effect if such adjustment been made on the basis of the issuance only
of
shares actually issued or issuable upon the conversion or exchange of those
convertible or exchangeable securities as to which the conversion or exchange
rights shall not have expired or terminated unexercised.
-6-
(C) If
any
change shall occur in the price per share provided for in any of the options,
rights or warrants referred to in paragraph (A) above, or in the price per
share
at which the securities referred to in paragraph (B) above are convertible
or
exchangeable, such options, rights or warrants or conversion or exchange rights,
as the case may be, shall be deemed to have expired or terminated on the date
when such price change became effective in respect of shares not theretofore
issued pursuant to the exercise or conversion or exchange thereof, and the
Corporation shall be deemed to have issued upon such date new options, rights
or
warrants or convertible or exchangeable securities at the new price in respect
of the number of shares issuable upon the exercise of such options, rights
or
warrants or the conversion or exchange of such convertible or exchangeable
securities.
(D) No
adjustment of the Purchase Price shall be made upon the actual issuance of
such
Common Stock upon exercise of options, rights or warrants or upon the actual
issuance of such Common Stock upon conversion or exchange of any convertible
or
exchangeable securities in respect of which an adjustment has already been
made
under this Section
4(c)(iv).
(d) Adjustments
for Noncash Dividends.
If
shares of the Corporation’s Capital Stock, evidences of the Corporation’s
indebtedness or other assets or property of the Corporation is distributed
to
all or substantially all holders of Common Stock (other than dividends,
distributions and rights, warrants, options or securities referred to in
Section
4(a)
or
(c)
above
and dividends or distributions in cash referred to in Section
4(e)
below),
then
the
Purchase Price will be adjusted based on the following formula:
PP(1)
=
PP(o) x SP(o)
- FMV
SP(o)
where,
| PP(o) = |
the
Purchase Price in effect immediately prior to such
distribution
|
| PP(1) = |
the
Purchase Price in effect immediately after such
distribution
|
| SP(o) = |
the
average of the Closing Sale Prices of shares of Common Stock for
the ten
consecutive Trading Days prior to the Trading Day immediately preceding
the ex-dividend date for such
distribution
|
| FMV = |
the
fair market value (as determined by the Board of Directors) of
the shares
of Capital Stock, evidences of indebtedness, assets or property
distributed with respect to each outstanding shares of Common Stock
on the
ex-dividend date for such
distribution
|
An
adjustment made pursuant to this Section
4(d)
shall be
made successively whenever any such distribution is made and shall become
effective on the day immediately after the date fixed for the determination
of
stockholders entitled to receive such distribution.
-7-
(e) Adjustments
for Cash Dividends.
If any
cash dividend or distribution is made to all or substantially all holders of
shares of Common Stock, the Purchase Price will be adjusted based on the
following formula:
PP(1)
=
PP(o) x SP(o)
- C
SP(o)
where,
| PP(o) = |
the
Purchase Price in effect immediately prior to the record date for
such
distribution
|
| PP(1) = |
the
Purchase Price in effect immediately after the ex-dividend date for
such
distribution
|
| SP(o) = |
the
average of the Closing Sale Prices of shares of Common Stock for
the ten
consecutive Trading Days prior to the Trading Day immediately preceding
the ex-dividend date of such
distribution
|
| C = |
the
amount in cash per share the Corporation distributes to holders of
shares
of Common Stock
|
An
adjustment made pursuant to this Section
4(e)
shall
become effective on the date immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
If any dividend or distribution described in this subsection (d) is
declared but not so paid or made, the Purchase Price shall again be adjusted
to
the Purchase Price that would then be in effect if such dividend or distribution
had not been declared.
(f) Adjustments
for Certain Share Repurchases.
The
Purchase Price will be decreased if the Corporation or any of its subsidiaries
purchases shares of outstanding Common Stock pursuant to a tender offer or
exchange offer or otherwise which involves an aggregate consideration for each
share purchased that exceeds the Closing Sale Price of shares of Common Stock
on
the Trading Day immediately after the last date on which tenders or exchanges
may be made pursuant to the tender offer or exchange offer or the date on which
any such other purchase is consummated, as applicable (the “Expiration
Time”).
The
Purchase Price will be decreased based on the following formula:
PP(1)
=
PP(o) x ____SP(1)
x OS(o)____
AC
+
(SP(1) x OS(1))
where,
| PP(o) = |
the
Purchase Price in effect on the date such tender offer or exchange
offer
expires or such other purchase is
consummated
|
| PP(1) = |
the
Purchase Price in effect on the day immediately after the date such
tender
offer or exchange offer expires or such other purchase is
consummated
|
-8-
| AC = |
the
aggregate value of all cash and any other consideration (as determined
by
the Board of Directors) paid or payable for all shares of Common
Stock
that the Corporation or one of its subsidiaries purchases in the
tender
offer or exchange offer or other purchase
transaction
|
| OS(o)= |
the
number of shares of Common Stock outstanding immediately prior to
the date
such tender offer or exchange offer expires or such other purchase
is
consummated
|
| OS(1) = |
the
number of shares of Common Stock outstanding immediately after the
date
such tender offer or exchange offer expires or such other purchase
is
consummated
|
| SP(1) = |
the
average of the Closing Sale Prices of shares of Common Stock for
the ten
consecutive Trading Days commencing on the Trading Day immediately
after
the date such tender offer or exchange offer expires or such other
purchase is consummated
|
If,
however, the application of the foregoing formula would result in an increase
in
the Purchase Price, no adjustment to the Purchase Price will be made. Any
adjustment made pursuant to this Section
4(f)
shall
become effective on the date immediately following the Expiration Time. If
the
Corporation is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Corporation is permanently prevented by applicable
law
from effecting any such purchases or all such purchases are rescinded, the
Purchase Price shall again be adjusted to be the Purchase Price that would
be in
effect if such tender or exchange offer had not been made.
(g)
Other
Adjustments
If any
event occurs of the type contemplated by the provisions of this Section
4
but not
expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights
with
equity features), then the Corporation's Board of Directors shall make an
appropriate adjustment in the Purchase Price and the number of shares of Common
Stock obtainable upon exercise of this Warrant so as to protect the rights
of
the Warrant Holder; provided that no such adjustment shall increase the Purchase
Price or decrease the number of shares of Common Stock obtainable as otherwise
determined pursuant to this Section
4.
(h) No
Adjustment for Dividends or Distributions in which Holders
Participate..
Notwithstanding the foregoing provisions of this Section 4, no adjustment shall
be made to the Purchase Price on account of any dividend or other distribution,
if the holder of Warrants will otherwise participate in such dividend or other
distributions without conversion solely as a holder of Warrants. If any Rights
Plan (as defined in Section
22
below)
adopted by the Corporation requires that each share of Common Stock issued
upon
the exercise of Warrants at any time prior to the distribution of separate
certificates representing the Rights (as defined in Section
22
below)
will be entitled to receive Rights as contemplated in Section
6
below,
then, there shall not be any adjustment to Purchase Price pursuant to this
Section 7 as a result of the issuance of Rights to the holders of Common Stock
pursuant to such Rights Plan, but an adjustment to the Purchase Price shall
be
made pursuant to Section 4(d)
upon the
separation of
-9-
such
Rights from the shares of Common Stock, subject to readjustment in the event
of
the expiration, termination or redemption of such Rights.
(i) No
Adjustment in Certain Other Circumstances.
Except
as stated in this Section
4,
no
adjustment to the Purchase Price will be made for the issuance of shares of
Common Stock or any securities convertible into or exchangeable for shares
of
Common Stock or the right to purchase shares of Common Stock or such convertible
or exchangeable securities. In particular, the applicable Purchase Price will
not be adjusted:
(i) upon
the
issuance of any shares of Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities
of
the Corporation and the investment of additional optional amounts in shares
of
Common Stock pursuant to customary provisions in any such plan providing for
such additional optional investments and without any solicitation by the
Company; or
(ii) for
a
change in the par value of the shares of Common Stock.
(j) Minimum
Adjustments. No
adjustment in the Purchase Price shall be required unless such adjustment would
require a change of at least one percent (1%) in the Purchase Price then in
effect; provided,
however,
that
any adjustments that by reason of this Section 4(j)
are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment and the Corporation shall make such carried forward
adjustments, regardless of whether the aggregate adjustment is less than one
percent (1%), within one year of the first such adjustment carried forward.
All
calculations under this Section 4
shall be
made by the Corporation and shall be made to the nearest cent.
(k) Notice
of Adjustments.
Whenever the number of shares of Common Stock for which this Warrant is
exercisable or the Purchase Price shall be adjusted pursuant to this
Section 4,
the
Company shall forthwith prepare a certificate to be executed by the chief
financial officer of the Company setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment was calculated,
specifying the number of shares of Common Stock for which this Warrant is
exercisable and any related change in the Purchase Price, after giving effect
to
such adjustment or change. The Company shall keep at its Principal Office copies
of all such certificates and cause the same to be available for inspection
at
said office during normal business hours by any Holder or any prospective
transferee of a Warrant designated by a Holder thereof. The Company shall
promptly cause a signed copy of such certificate to be delivered to each Holder
in accordance with Section 15
below.
Failure to deliver such notice shall not affect the legality or validity of
any
such adjustment.
(l) Treatment
of Treasury Stock.
For
purposes of this Section 4,
the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation, unless such treasury shares
participate in any distribution or dividend that requires an adjustment pursuant
to this Section 4.
(m) Adjustment
of Number of Warrant Shares.
Upon
each adjustment in the Purchase Price pursuant to this Section
4,
the
number of Warrant Shares purchasable hereunder
-10-
shall
be
adjusted, to the nearest one-ten thousandth (1/10,000) of a share of Common
Stock, to the product obtained by multiplying the number of Warrant Shares
purchasable immediately prior to such adjustment by a fraction, (i) the
numerator of which shall be the Purchase Price immediately prior to such
adjustment, and (ii) the denominator of which shall be the Purchase Price
immediately thereafter.
5.Effect
of Reclassification, Consolidation, Merger or Sale.
(a) If
the Corporation (i) reclassifies or changes its Common Stock (other than
changes in par value or resulting from a subdivision or combination),
(ii) consolidates or combines with or merges into or is a party to a
binding share exchange with any Person or (iii) sells or conveys or
otherwise disposes to another Person all or substantially all of the
Corporation’s property and assets, and as a result of which the holders of
shares of Common Stock receive (or the shares of Common Stock are converted
into) stock, other securities or other property or assets (including cash or
any
combination thereof) with respect to or in exchange for shares of Common Stock,
then, following such reclassification, change, consolidation, combination,
merger, share exchange, sale, conveyance or other disposition, each Warrant
then
outstanding will, without the consent of the Holder thereof, become exercisable
for the purchase only of the kind and amount of shares of stock, other
securities, other property or assets (including cash or any combination thereof)
receivable, upon such reclassification, change, consolidation, combination,
merger, share exchange, sale, conveyance or other disposition by a holder of
the
number of shares of Common Stock purchasable upon exercise of such Warrant
immediately prior thereto, after giving effect to any adjustment event. In
the
event holders of Common Stock have the opportunity to elect the form of
consideration to be received in such transaction, the type and amount of
consideration that Holders of Warrants would have been entitled to receive
will
be deemed to be the weighted average of the types and amounts of consideration
received by the holders of Common Stock that affirmatively make an election.
The
Corporation will not become party to any such transaction unless its terms
are
consistent with the foregoing.
(b) The
Corporation shall cause notice of the application of this Section 5
to be
delivered to each Holder of the shares of Series A Preferred Stock in accordance
with Section 15
below
within 15 days after the occurrence of any of the events specified in
Section 5(a)
and
shall issue a press release containing such information and publish such
information on its web site. Failure to deliver such notice shall not affect
the
legality or validity of any conversion right pursuant to this Section 5.
(c) The
above
provisions of this Section 5
shall
similarly apply to successive reclassifications, changes, consolidations,
mergers, combinations, sales and conveyances.
6.
Rights
Issued in Respect of Common Stock Issuable Upon Exercise.
If at
the time that any shares Common Stock are issued upon exercise of this Warrant
the Corporation has a Rights Plan in effect, in addition to receiving the number
of shares of Common Stock required to be issued to the Holder of this Warrant
pursuant to Section
1
above.
such holder shall be entitled to receive the number of Rights issuable in
respect of such shares of Common Stock under the Rights Plan, if any, and the
certificates representing the shares of Common Stock issued pursuant to
Section
1 shall
bear such legends, if any, as may be provided by the terms of the Rights Plan.
-11-
7. Notices
of Certain Corporate Events.
In
case:
A. the
Corporation shall take a record of the holders of its Common Stock (or other
stock or securities at the time receivable upon the exercise of the Warrant)
for
the purpose of entitling them to receive any dividend or other distribution,
or
any right to subscribe for or purchase any shares of stock of any class or
any
other securities, or to receive any other right, or
B. of
any
voluntary dissolution, liquidation or winding-up of the Corporation,
then,
and
in each such case, the Corporation will mail or cause to be mailed to each
holder of a Warrant at the time outstanding a notice specifying, as the case
may
be, (a) the date on which a record is to be or has been taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (b) the date on which
such dissolution, liquidation or winding-up is expected to take place (the
“Payment
Date”),
and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities at the time receivable upon the exercise
of
the Warrants) shall be entitled to exchange their shares of Common Stock (or
such other stock or securities) for securities or other property deliverable
upon such dissolution, liquidation or winding-up. Such notice shall be mailed
at
least ten (10) days prior to the Payment Date therein specified.
8. Loss
or Mutilation.
Upon
receipt by the Corporation of evidence satisfactory to it (in the exercise
of
reasonable discretion) of the ownership of and the loss, theft, destruction
or
mutilation of any Warrant and (in the case of loss, theft or destruction) of
indemnity and bond satisfactory to it (in the exercise of reasonable
discretion), and (in the case of mutilation) upon surrender and cancellation
thereof, the Corporation will execute and deliver in lieu thereof a new Warrant
of like tenor.
9. No
Impairment.
The
Company shall not by any action, including, without limitation, amending its
charter documents or through any reorganization, reclassification, transfer
of
assets, consolidation, merger, dissolution, issue or sale of securities or
any
other similar voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all
such
actions as may be necessary or appropriate to protect the rights of the Holder
against impairment. Without limiting the generality of the foregoing, the
Company shall take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, free and clear of
all
liens, and shall use its best efforts to comply with all applicable foreign
or
United States federal and state laws and regulations and to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction over it as may be necessary to enable the Company to perform its
obligations under this Warrant.
10. Reservation
of Common Stock.
The
Corporation shall at all times reserve and keep available for issue upon the
exercise of Warrants such number of its authorized but unissued shares of Common
Stock as will be sufficient to permit the exercise in full of this Warrant.
All
of the Warrant Shares will, upon issuance and receipt of the Purchase Price
therefor, be fully paid and nonassessable, and free from all contractual
preemptive rights, rights of first refusal or first offer with respect to the
issuance thereof. If at any time, notwithstanding
-12-
the
Company’s compliance with its obligations under Section
9
above,
the number of authorized but unissued shares of Common Stock shall not be
sufficient for such purposes, the Corporation shall take such corporate action
as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purpose and the obligation to issue such shares shall be
suspended until such action has been taken.
11. Registration
Rights.
The
Holder of this Warrant is entitled to have the Warrant Shares registered for
resale under the Act, pursuant to and in accordance with the Registration Rights
Agreement among the Corporation, the Holder and the other investors who were
issued Warrants in the Offering.
12. No
Rights as Stockholder Conferred by Warrants.
The
Warrant shall not entitle the Holder hereof to any of the rights, either at
law
or in equity, of a stockholder of the Corporation. The Holder shall, upon the
exercise hereof, not be entitled to any dividend that may have accrued or which
may previously have been paid with respect to shares of stock issuable upon
the
exercise of the Warrant.
13. Endorsement
of Warrants.
The
Warrant when presented or surrendered for exchange, transfer or registration
shall be accompanied (if so required by the Corporation) by an assignment in
the
form attached hereto as Exhibit
B
or such
other written instrument of transfer, in form satisfactory to the Corporation,
duly executed by the registered Holder or by his duly authorized
attorney
14. Agreement
of Warrant Holders.
The
Holder, and to the extent that portions of this Warrant are assigned and there
is more than one Holder of Warrants exercisable for the Warrant Shares, every
holder of a Warrant, by accepting the same, consents and agrees with the
Corporation and with all other Warrant holders that: (a) the Warrants are
transferable only as permitted by Section
3
above;
(b) the Warrants are transferable only on the registry books of the Corporation
as herein provided; and (c) the Corporation may deem and treat the Person in
whose name the Warrant certificate is registered as the absolute owner thereof
and of the Warrants evidenced thereby for all purposes whatsoever, and the
Corporation shall not be affected by any notice to the contrary.
15. Payment
of Taxes.
The
Corporation will pay all stamp, transfer and other similar taxes payable in
connection with the original issuance of this Warrant and the Warrant Shares
issued upon the exercise hereof, provided, however, that the Corporation shall
not be required to (i) pay any such tax which may be payable in respect of
any
transfer involving the transfer and delivery of this Warrant or the issuance
or
delivery of certificates for shares of Common Stock issuable upon exercise
thereof in a name other than that of the registered Holder of this Warrant;
(ii)
issue or deliver any certificate for Warrant Shares until any such tax required
to be paid under clause (i) shall have been paid, all such tax being payable
by
the Holder of this Warrant at the time of surrender; or (iii) pay any such
tax
based on the income of the Holder.
16. Entire
Agreement.
This
Warrant constitutes the full and entire understanding and agreement among the
parties with regard to the subject matter hereof and no party shall be liable
-13-
or
bound
to any other party in any manner by any representations, warranties, covenants
or agreements except as specifically set forth herein.
17. Successors
and Assigns.
All
covenants and provisions of this Warrant by or for the benefit of the
Corporation or the Holder of this Warrant shall bind and inure to the benefit
of
their respective successors, assigns, heirs and personal
representatives.
18. Notices.
All
notices and other communications from the Corporation to the Holder of this
Warrant shall be deemed delivered two Business Days after mailing if mailed
by
first class, registered or certified mail, postage prepaid, to the address
furnished to the Corporation in writing by the Holder or on the date of delivery
if delivered by hand. All notices and other communications from the Holder
of
this Warrant to the Corporation shall be shall be deemed delivered two Business
Days if mailed by first class, registered or certified mail, postage prepaid,
to
the Corporation at its Principal Office or on the date of delivery if delivered
by hand.
19. Change;
Modifications; Waiver.
No
terms of this Warrant may be amended, waived or modified except by the express
written consent of the Corporation and the holders of a majority in interest
of
the Warrants; provided
that any
amendment or waiver that by its terms would adversely affect the Holder in
a
manner different from the holders of the Warrants generally shall require the
express written consent of the Holder.
20. Headings.
The
headings in this Warrant are for purposes of convenience in reference only,
and
shall not be deemed to constitute a part hereof.
21. Governing
Law, Etc.
This
Warrant shall be governed by and construed in accordance with the internal
laws
of the State of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Warrant, shall
be
brought solely in a federal or state court located in the City, County and
State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect
as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit
or
proceeding and any defense or lack of in personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from
the
other party hereto of all of its reasonable and documented legal fees and
expenses.
22. Additional
Definitions.
For
purposes of this Warrant, the following terms not otherwise defined herein
shall
have the meanings indicated:
“Act”
means the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
“Affiliate”
of any Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person.
For
the purposes of
-14-
this
definition, “control” when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.
“Blue
Sky
Laws” means any state securities or “blue sky” laws.
“Board
of
Directors” means either the board of directors of the Corporation or any duly
authorized committee of such board.
“Business
Day” means any day other than a Saturday, Sunday or a day on which state or U.S.
federally chartered banking institutions in New York, New York are not required
to be open.
“Closing
Sale Price” of the Common Stock or other capital stock or similar equity
interests on any date means the closing sale price per share (or, if no closing
sale price is reported, the average of the closing bid and ask prices or, if
more than one in either case, the average of the average closing bid and the
average closing ask prices) on such date as reported on the principal United
States securities exchange on which Common Stock or such other capital stock
or
similar equity interests are traded or, if the Common Stock or such other
Capital Stock or similar equity interests are not listed on a United States
national or regional securities exchange, as reported by The Nasdaq Global
Market or by the National Quotation Bureau Incorporated. In the absence of
such
quotations, the Board of Directors of the Corporation shall be entitled to
determine the Closing Sale Price on the basis it considers appropriate, which
determination shall be conclusive. The Closing Sale Price shall be determined
without reference to any extended or after hours trading.
“Common
Stock” means any shares of any class of the Corporation that has no preference
in respect of dividends or of amounts payable in the event of any voluntary
or
involuntary liquidation, dissolution or winding up of the Corporation and that
is not subject to redemption by the Corporation. However, shares of Common
Stock
issuable on exercise of this Warrant shall include only shares of the class
designated as Common Stock of the Corporation as of the Original Issue Date
or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and that have no preference in respect of dividends
or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and which are not subject to
redemption by the Corporation; provided
that if
at any time there shall be more than one such resulting class, the shares of
each such class then so issuable on conversion shall be substantially in the
proportion that the total number of shares of such class resulting from all
such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
“Person”
means an individual, a corporation, a partnership, a limited liability company,
an association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
“Placement
Agent” means Northeast Securities, Inc.
-15-
“Rights”
means any Common Stock purchase rights, preferred stock purchase rights or
other
rights issued pursuant to a Rights Plan.
“Rights
Plan” means any stockholder rights plan or agreement adopted by the Corporation,
as the same may be amended from time to time.
“Trading
Day” means a day during which trading in securities generally occurs on The
Nasdaq Global Market or, if the applicable security is not listed on The Nasdaq
Global Market, on the principal other national or regional securities exchange
on which the applicable security is then listed or, if the applicable security
is not listed on a national or regional securities exchange, on The Nasdaq
Global Market or, if the applicable security is not quoted on The Nasdaq Global
Market, on the principal other market on which the applicable security is then
traded (provided that no day on which trading of the applicable security is
suspended on The Nasdaq Global Market or such exchange or other trading market
will count as a Trading Day).
-16-
WARRANT
SIGNATURE PAGE
Dated:
January 30, 2007
|
AMERICAN
TELECOM SERVICES, INC.
|
||
| |
|
|
| By: | /s/ | |
|
Name: Xxxxxxxx Xxxxxxxx |
||
| Title: Chairman | ||
Warrant
#PP-_________
Issued
to
__________________
For
_________ Shares
-17-
EXHIBIT
A
SUBSCRIPTION
FORM
(To
be
executed only upon exercise of Warrant)
The
undersigned registered owner of this Warrant irrevocably exercises this Warrant
and purchases _______ shares of the Common Stock of American Telecom Services,
Inc., purchasable with this Warrant, and herewith makes payment therefor, all
at
the price and on the terms and conditions specified in this Warrant, either
by
(i) payment by cash or check, and/or (ii) a cashless exercise.
Dated:
|
(Signature
of Registered Owner)
(Street
Address)
(City
/ State / Zip Code)
|
EXHIBIT
B
FORM
OF ASSIGNMENT
FOR
VALUE RECEIVED
the
undersigned registered owner of this Warrant hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock set forth
below:
|
Name
of Assignee
|
Address
|
Number
of
Shares
|
and
does
hereby irrevocably constitute and appoint __________________________ Attorney
to
make such transfer on the books of American Telecom Services, Inc., maintained
for the purpose, with full power of substitution in the premises.
Dated:
|
(Signature)
(Witness)
|
The
undersigned Assignee of the Warrant hereby makes to American Telecom Services,
Inc., as of the date hereof, with respect to the Assignee, all of the
representations and warranties made by the Holder, and the undersigned Assignee
agrees to be bound by all the terms and conditions of the Warrant and the
American Telecom Services, Inc. Registration Rights Agreement, . by and between
American Telecom Services, Inc. and the Holder.
Dated:
|
(Signature)
|
