AGREEMENT
This AGREEMENT (this "Agreement") is made and entered into as of January
6, 2006, by and between Globetel Communications Corp., a Delaware corporation
(the "Company"), and the stockholder identified on the signature page hereto
(the "Purchaser").
WHEREAS, the Company and the Purchaser are parties to a Subscription
Agreement, dated as of August 30, 2005 (the "Purchase Agreement"), pursuant to
which the Company issued and sold to the Purchaser certain convertible
promissory notes and warrants. Capitalized terms used and not defined in this
Agreement but defined in the Purchase Agreement shall have the respective
meanings set forth in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Purchaser agree as follows:
1. Subject to the terms hereof, the Purchaser agrees to exercise in
accordance with Section 6.2(b) the Class A Common Stock Purchase Warrant,
dated August 30, 2005, it received pursuant to the Purchase Agreement (the
"Warrant") on the Closing Date (as defined in Section 6.1). In
consideration therefor, on the Closing Date, the Company will issue and
deliver to the Purchaser a Common Stock Purchase Warrant in the form of
Exhibit A (a "New Warrant"), entitling the holder thereof to purchase
___________ shares of Common Stock at a per share exercise price of $4.00,
subject to adjustment as set forth in the New Warrant.
2. The Company hereby grants the following registration rights to the
Purchaser with respect to the shares of Common Stock issuable upon
exercise of the New Warrant ("New Warrant Shares"):
2.1. Piggy-Back Registrations. If at any time following the date hereof
the Company shall determine to prepare and file with the Commission
a registration statement relating to an offering for its own account
or the account of others of any of its equity securities, other than
on Form S-8 to register equity securities issuable in connection
with stock option or other employee benefit plans, then the Company
shall send to the Purchaser written notice of such determination
and, if within fifteen days after receipt of such notice, the
Purchaser shall so request in writing, the Company shall include in
such registration statement all or any part of such New Warrant
Shares the Purchaser requests to be registered.
2.2. Demand Registration. Following the one year anniversary of the date
hereof, if the Company has not filed a registration statement with
the Commission to enable the Purchaser to resell New Warrant Shares,
upon a written request therefor from the Purchaser, the Company
shall prepare and file with the Commission a registration statement
under the 1933 Act registering the New Warrant Shares which are the
subject of such request for unrestricted public resale by the holder
thereof.
2.3. The New Warrant Shares shall be afforded all of the registration
procedures and terms as are set forth in Sections 11.2 through 11.7
of the Purchase Agreement as if they were "Registrable Securities"
thereunder. The Company further agrees to make such filings as may
be necessary to ensure the continued effectiveness of Registration
Statement No. 333-130119 filed under which the Warrant Shares are
registered for resale by the Purchaser until such time as such
Warrant Shares have been sold thereunder.
3. The Company hereby represents and warrants to the Purchaser as follows:
(a) Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate this Agreement
and the transactions contemplated hereby and to carry out its
obligations hereunder. The execution and delivery of this Agreement
and the New Warrant by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all
necessary action on the part of the Company and no further action is
required by the Company in connection therewith. Each of this
Agreement and the New Warrant has been duly executed by the Company
and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company,
enforceable against the Company in accordance with their respective
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(b) Issuance of the Securities. The New Warrant Shares have been duly
authorized and, when issued and paid for in accordance with the
transfer of the New Warrant, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens other than
restrictions on transfer under applicable securities laws. The
Company has reserved from its duly authorized capital stock a number
of shares of Common Stock for issuance upon exercise of the New
Warrant.
(c) Bring Down of Certain Representations and Warranties. The Company
hereby restates, as if first made as of and on the date of this
Agreement, the representations and warranties set forth in the
Purchase Agreement (as modified by the disclosure schedules to the
extent they apply thereto) in Sections 5(a), (b), (d), (e), (f),
(h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t),
(u), (v), (w), (x), (y), (z), (aa), (bb), (cc), (dd) and (ee); with
the understanding that for purposes of this Agreement the term
"Transaction Documents" therein shall refer not only to such term as
defined in the Purchase Agreement but also to this Agreement and the
New Warrant.
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4. The Purchaser hereby represents and warrants as of the date hereof to the
Company as follows:
(a) Authorization; Enforcement. The Purchaser has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement and to carry out its
obligations under each. The execution and delivery of this Agreement
by the Purchaser and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary
action on the part of the Purchaser and no further action is
required by the Purchaser in connection therewith. This Agreement
has been duly executed by the Purchaser and, when delivered in
accordance with the terms hereof, will constitute the valid and
binding obligation of the Purchaser, enforceable against the
Purchaser in accordance with their respective terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by
laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
(b) Bring Down of Certain Representations and Warranties. The Purchaser
hereby restates, as if first made as of and on the date of this
Agreement, the representations and warranties set forth in the
Purchase Agreement in Section 4.
5. Right of First Refusal. Until the one year anniversary of the date hereof,
the Purchaser shall be given not less than seven (7) business days prior
written notice of any proposed sale by the Company of its Common Stock or
other securities or debt obligations, except in connection with an equity
or equity-linked capital raise of at least $30,000,000 underwritten by a
nationally recognized middle market or bulge bracket investment bank (such
an issuance shall be an "Excepted Issuance"). The Company may not include
any terms or provisions in the subsequent placement whereby the Purchaser
would be required to agree to any restrictions in trading as to any
securities of the Company owned by the Purchaser prior to such subsequent
placement, and the Company must provide registration rights as to the
securities issuable in such subsequent placement which are similar in all
material respects to the registration rights contained in the Purchase
Agreement. Should the Purchaser exercise its rights pursuant to this
Section 5, the Purchaser shall have the right during the seven (7)
business days following receipt of the notice to purchase all of such
offered Common Stock, debt or other securities in accordance with the
terms and conditions set forth in the notice of sale. In the event such
terms and conditions are modified during the notice period, the Purchaser
shall be given prompt notice of such modification and shall have the right
during the seven (7) business days following the notice of modification to
exercise such right. After the expiration of such seven (7) business day
period, should the Purchaser choose not to exercise its right pursuant to
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this Section 5, the Company shall, within twenty-one (21) days, publicly
announce either the entering into of definitive agreements (and attach
such agreements along with such public filing) with respect to such
proposed sale of Common Stock (or equivalents thereof or securities
convertible into Common Stock) by the Company or the termination of such
transaction. Notwithstanding the foregoing, the Purchaser shall have no
right of first refusal with regard to any financing provided solely by an
officer or director of the Company or any shareholder rights plan approved
by the Board of Directors.
6. Closing.
6.1. Closing. On the business day following the date hereof, or on such
other date as the parties may agree (the "Closing Date"), the
closing of the transactions contemplated by this Agreement shall
occur (the "Closing").
6.2. Deliveries.
a) At the Closing, the Company shall deliver or cause to be
delivered to the Purchaser the following:
(1) this Agreement, duly executed by the Company; and
(2) a New Warrant, registered in the name of the Purchaser.
b) At the Closing, the Purchaser shall deliver or cause to be
delivered to the Company the following:
(1) this Agreement, duly executed by the Purchaser; and
(2) an amount in United States Dollars equal to the product
of the maximum number of Warrant Shares for which the
Warrant may be exercised multiplied by the current per
share exercise price, by wire transfer of immediately
available funds to an account as specified in writing by
the Company, minus the fees set forth in Section 7.1.
6.3. Closing Conditions.
a) The obligations of the Company hereunder in connection with
the Closing are subject to the following conditions being met:
(1) the accuracy in all material respects when made and on
the Closing Date of the representations and warranties
of the Purchaser contained herein;
(2) all obligations, covenants and agreements of the
Purchaser required to be performed at or prior to the
Closing Date shall have been performed; and
(3) the delivery by the Purchasers of the items set forth in
Section 6.2(b) of this Agreement.
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(b) The obligations of the Purchaser hereunder in connection with
the Closing are subject to the following conditions being met:
(1) the accuracy in all material respects on the Closing
Date of the representations and warranties of the
Company contained herein;
(2) all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date
shall have been performed;
(3) the delivery by the Company of the items set forth in
Section 6.2(a) of this Agreement;
(4) the filing by the Company by 8:30 a.m. Eastern time on
the Closing Date of a press release disclosing the
material terms of the transactions contemplated hereby
and by 4:30 p.m. Eastern time on such date the filing by
the Company of a Current Report on Form 8-K, attaching
such press release, this Agreement and the New Warrant
as Exhibits. Each such filing shall be reasonably
acceptable to the Purchaser.
7. Miscellaneous.
7.1. Fees and Expenses. Each party hereto will bear the fees and expenses
of its own counsel and advisors in connection with the negotiation
and entering into of this Agreement. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied
in connection with the issuance of any Securities.
7.2. Entire Agreement. This Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.
7.3. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective as specified in the Purchase
Agreement. The address for such notices and communications shall be
as set forth on the signature pages attached to the Purchase
Agreement.
7.4. Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waiver is
sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such
right.
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7.5. Agreement Controls. If any topic is addressed both in the Purchase
Agreement (or any document related thereto) and in this Agreement,
this Agreement shall control.
7.6. Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit
or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction
will be applied against any party.
7.7. Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof.
7.8. Survival. The representations and warranties contained herein shall
survive the delivery, exercise and/or conversion of the Securities,
as applicable for the applicable statue of limitations.
7.9. Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered
one and the same document and shall become effective when
counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the
same counterpart.
7.10. Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and
the parties will attempt to agree upon a valid and enforceable
provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this
Agreement.
(Signature Pages Follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.
GLOBETEL COMMUNICATIONS CORP.
By:
----------------------------
Name:
Title:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name of Investing Entity: _____________________________________________________
Signature of Authorized Signatory of Investing Entity: ________________________
Name of Authorized Signatory: _________________________________________________
Title of Authorized Signatory: ________________________________________________
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