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EXHIBIT 10.27
STOCK PURCHASE WARRANT
This STOCK PURCHASE WARRANT ("Warrant") is issued as of the 5th day of
February, 1999, by DIGITAL TRANSMISSION SYSTEMS, INC., a Delaware corporation
(the "Company"), to SIRROM CAPITAL CORPORATION, a Tennessee corporation (SIRROM
CAPITAL CORPORATION and any subsequent assignee or transferee hereof are
hereinafter referred to collectively as "Holder" or "Holders").
AGREEMENT:
1. ISSUANCE OF WARRANT; TERM. For and in consideration of SIRROM
CAPITAL CORPORATION entering into that Second Amendment to Debenture Purchase
Agreement with the Company dated as of the date hereof, which amends that
Debenture Purchase Agreement dated September 25, 1997, as previously amended by
that First Amendment to Debenture Purchase Agreement dated as of October 21,
1998 (the "Loan Agreement"), and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company hereby
grants to Holder the right to purchase 702,615 shares of the Company's common
stock (the "Common Stock"), which the Company represents to equal 10.0% of the
shares of capital stock outstanding on the date hereof, calculated on a fully
diluted basis and assuming exercise of this Warrant. The shares of Common Stock
issuable upon exercise of this Warrant are hereinafter referred to as the
"Shares." This Warrant shall be exercisable at any time and from time to time
from the date hereof until March 1, 2004 (the "Expiration Date").
2. EXERCISE PRICE. The exercise price (the "Exercise Price") per
share for which all or any of the Shares may be purchased pursuant to the terms
of this Warrant shall be One Dollar ($1.00).
3. EXERCISE. This Warrant may be exercised by the Holder hereof (but
only on the conditions hereinafter set forth) in whole or in part, upon delivery
of written notice of intent to exercise to the Company in the manner at the
address of the Company set forth in Section 13 hereof, together with this
Warrant and payment to the Company of the aggregate Exercise Price of the
Shares so purchased. The Exercise Price shall be payable, at the option of the
Holder, (i) by certified or bank check, (ii) by the cancellation of all or a
portion of debt outstanding to the Holder from the Company having an outstanding
principal balance equal to the aggregate Exercise Price or (iii) by the
surrender of a portion of this Warrant where the Shares subject to the portion
of this Warrant that is surrendered have a fair market value equal to the
aggregate Exercise Price. In the absence of an established public market for the
Common Stock, fair market value shall be established by the Company's board of
directors in a commercially reasonable manner. Upon exercise of this Warrant as
aforesaid, the Company shall as promptly as practicable, and in any
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event within fifteen (15) days thereafter, execute and deliver to the Holder of
this Warrant a certificate or certificates for the total number of whole Shares
for which this Warrant is being exercised in such names and denominations as are
requested by such Holder. If this Warrant shall be exercised with respect to
less than all of the Shares, the Holder shall be entitled to receive a new
Warrant covering the number of Shares in respect of which this Warrant shall not
have been exercised, which new Warrant shall in all other respects be identical
to this Warrant. The Company covenants and agrees that it will pay when due any
and all state and federal issue taxes which may be payable in respect of the
issuance of this Warrant or the issuance of any Shares upon exercise of this
Warrant.
4. COVENANTS AND CONDITIONS. The above provisions are subject to the
following:
(a) Neither this Warrant nor the Shares have been registered
under the Securities Act of 1933, as amended ("Securities Act"), or any
state securities laws ("Blue Sky Laws"). This Warrant has been
acquired for investment purposes and not with a view to distribution or
resale and may not be sold or otherwise transferred without (i) an
effective registration statement for such Warrant under the Securities
Act and such applicable Blue Sky Laws, or (ii) an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to the
Company and its counsel, that registration is not required under the
Securities Act or under any applicable Blue Sky Laws (the Company
hereby acknowledges that Boult, Cummings, Xxxxxxx & Xxxxx, PLC is
acceptable counsel). Transfer of the Shares shall be restricted in the
same manner and to the same extent as the Warrant and the certificates
representing such Shares shall bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT
BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE ACT
AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (II) IN THE OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER SUCH SECURITIES
ACTS AND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED TRANSFER.
The Holder hereof and the Company agree to execute such other
documents and instruments as counsel for the Company reasonably deems
necessary to effect the compliance of the issuance of this Warrant and
any shares of Common Stock issued upon exercise hereof with applicable
federal and state securities laws.
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(b) The Company covenants and agrees that all Shares which may
be issued upon exercise of this Warrant will, upon issuance and payment
therefor, be legally and validly issued and outstanding, fully paid and
nonassessable, free from all taxes, liens, charges and preemptive
rights, if any, with respect thereto or to the issuance thereof. The
Company shall at all times reserve and keep available for issuance upon
the exercise of this Warrant such number of authorized but unissued
shares of Common Stock as will be sufficient to permit the exercise in
full of this Warrant.
(c) The Company covenants and agrees that it shall not sell
any shares of the Company's capital stock at a price per share below
the fair market value of such shares, without the prior written
consent of the Holder hereof. In the event that the Company sells
shares of Common Stock at a price per share below the fair market
value of such shares (a "Below Market Transaction"), without the prior
written consent of the Holder hereof, the Company covenants and agrees
that the number of shares issuable upon exercise of this Warrant shall
be equal to the product obtained by multiplying the number of shares
issuable pursuant to this Warrant prior to the Below Market
Transaction by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to
consummation of the Below Market Transaction plus the number of shares
of Common Stock issued in the Below Market Transaction, and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the Below Market Transaction plus the
number of shares of Common Stock that the aggregate consideration
received by the Company in the Below Market Transaction would purchase
at fair market value. For purposes of this subsection, Common Stock
shall be deemed to include that number of shares of Common Stock that
would be obtained assuming (i) the conversion of any securities of the
Company which, by their terms, are convertible into or exchangeable
for Common Stock, and (ii) the exercise of all options to purchase or
rights to subscribe four Common Stock or securities which, by their
terms, are convertible into or exchangeable for Common Stock. In the
absence of an established public market for the securities sold by the
Company in a Below Market Transaction, fair market value shall be
established by the Company's board of directors in a commercially
reasonable manner.
5. TRANSFER OF WARRANT. Subject to the provisions of Section 4
hereof, this Warrant may be transferred, in whole or in part, to any person or
business entity, by presentation of the Warrant to the Company with written
instructions for such transfer. Upon such presentation for transfer, the Company
shall promptly execute and deliver a new Warrant or Warrants in the form hereof
in the name of the assignee or assignees and in the denominations specified in
such instructions. The Company shall pay all expenses incurred by it in
connection with the preparation, issuance and delivery of Warrants under this
Section.
6. WARRANT HOLDER NOT SHAREHOLDER; RIGHTS OFFERING; PREEMPTIVE
RIGHTS. Except as otherwise provided herein, this Warrant does not confer upon
the Holder, as such, any right whatsoever as a shareholder of the Company.
Notwithstanding the foregoing, if the Company
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should offer to all of the Company's shareholders the right to purchase any
securities of the Company, then all shares of Common Stock that are subject to
this Warrant shall be deemed to be outstanding and owned by the Holder and the
Holder shall be entitled to participate in such rights offering. The Company
shall not grant any preemptive rights with respect to any of its capital stock
without the prior written consent of the Holder.
7. OBSERVATION RIGHTS. The Holder of this Warrant shall receive
notice of and be entitled to attend or may send a representative to attend all
meetings of the Company's Board of Directors in a non-voting observation
capacity and shall receive a copy of all correspondence and information
delivered to the Company's Board of Directors, from the date hereof until such
time as all indebtedness of the Company to the Holder has been paid in full.
8. ADJUSTMENT UPON CHANGES IN STOCK.
(a) If all or any portion of this Warrant shall be exercised
subsequent to any stock split, stock dividend, recapitalization,
combination of shares of the Company, or other similar event, occurring
after the date hereof, then the Holder exercising this Warrant shall
receive, for the aggregate Exercise Price, the aggregate number and
class of shares which such Holder would have received if this Warrant
had been exercised immediately prior to such stock split, stock
dividend, recapitalization, combination of shares, or other similar
event. If any adjustment under this Section 8(a), would create a
fractional share of Common Stock or a right to acquire a fractional
share of Common Stock, such fractional share shall be disregarded and
the number of shares subject to this Warrant shall be the next higher
number of shares, rounding all fractions upward. Whenever there shall
be an adjustment pursuant to this Section 8(a), the Company shall
forthwith notify the Holder or Holders of this Warrant of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
(b) If all or any portion of this Warrant shall be exercised
subsequent to any merger, consolidation, exchange of shares,
separation, reorganization or liquidation of the Company, or other
similar event, occurring after the date hereof, as a result of which
shares of Common Stock shall be changed into the same or a different
number of shares of the same or another class or classes of securities
of the Company or another entity, or the holders of Common Stock are
entitled to receive cash or other property, then the Holder exercising
this Warrant shall receive, for the aggregate Exercise Price, the
aggregate number and class of shares, cash or other property which such
Holder would have received if this Warrant had been exercised
immediately prior to such merger, consolidation, exchange of shares,
separation, reorganization or liquidation, or other similar event. If
any adjustment under this Section 8(b) would create a fractional share
of Common Stock or a right to acquire a fractional share of Common
Stock, such fractional share shall be disregarded and the number of
shares subject to this Warrant shall be the next higher number of
shares, rounding all fractions upward. Whenever there shall be an
adjustment pursuant to this Section 8(b),
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the Company shall forthwith notify the Holder or Holders of this
Warrant of such adjustment, setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment
was calculated.
9. PUT AGREEMENT.
(a) The Company hereby irrevocably grants and issues to Holder
the right and option to sell to the Company (the "Put") this Warrant
for a period of thirty (30) days immediately prior to the Expiration
Date, at a purchase price (the "Put Price") equal to the Fair Market
Value (as hereinafter defined) of the shares of Common Stock issuable
to Holder upon exercise of this Warrant.
(b) Holder may exercise the Put by delivery of written notice
(the "Put Notice") of such exercise to the Company in the manner and at
the address of the Company set forth in Section 13 hereof. The Company
shall pay to Holder, in cash or by wire transfer of immediately
available funds, the Put Price within thirty (30) days of the receipt
of the Put Notice.
(c) For purposes of this Section 9, the Fair Market Value of the
shares of Common Stock of the Company issuable pursuant to this Warrant
shall be determined as follows:
(i) The Company and the Holder shall each appoint an
independent, experienced appraiser who is a member of a
recognized professional association of business appraisers. The
two appraisers shall determine the value of the shares of Common
Stock which would be issued upon the exercise of the Warrant,
assuming that the sale would be between a willing buyer and a
willing seller, both of whom have full knowledge of the financial
and other affairs of the Company, and neither of whom is under
any compulsion to sell or to buy.
(ii) If the higher of the two appraisals is not ten
percent (10%) greater than the lower of the appraisals, the Fair
Market Value shall be the average of the two appraisals. If the
higher of the two appraisals is equal to or greater than ten
percent (10%) more than the lower of the two appraisals, then a
third appraiser shall be appointed by the two appraisers, and if
they cannot agree on a third appraiser, the American Arbitration
Association shall appoint the third appraiser. The third
appraiser, regardless of who appoints him or her, shall have the
same qualifications as the first two appraisers.
(iii) The Fair Market Value after the appointment of the
third appraiser shall be the mean of the three appraisals.
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(iv) The fees and expenses of the appraisers shall be paid
one-half by the Company and one-half by the Holder.
10. REGISTRATION.
(a) The Company and the holders of the Shares agree that if at
any time after the date hereof the Company shall propose to file a
registration statement with respect to any of its Common Stock on a
form suitable for a secondary offering (including its initial public
offering), it will give notice in writing to such effect to the
registered holder(s) of the Shares at least thirty (30) days prior to
such filing, and, at the written request of any such registered holder,
made within ten (10) days after the receipt of such notice, will
include therein at the Company's cost and expense (including the fees
and expenses of counsel to such holder(s), but excluding underwriting
discounts, commissions and filing fees attributable to the Shares
included therein) such of the Shares as such holder(s) shall request;
provided, however, that if the offering being registered by the Company
is underwritten and if the representative of the underwriters certifies
in writing that the inclusion therein of the Shares would materially
and adversely affect the sale of the securities to be sold by the
Company thereunder, then the Company shall be required to include in
the offering only that number of securities, including the Shares,
which the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to
be apportioned pro rata among all selling shareholders according to the
total amount of securities entitled to be included therein owned by
each selling shareholder, but in no event shall the total amount of
Shares included in the offering be less than the number of securities
included in the offering by any other single selling shareholder unless
all of the Shares are included in the offering).
(b) Whenever the Company undertakes to effect the registration
of any of the Shares, the Company shall, as expeditiously as reasonably
possible:
(i) Prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement covering
such Shares and use its best efforts to cause such registration
statement to be declared effective by the Commission as
expeditiously as possible and to keep such registration effective
until the earlier of (A) the date when all Shares covered by the
registration statement have been sold or (B) one hundred eighty
(180) days from the effective date of the registration statement;
provided, that before filing a registration statement or
prospectus or any amendment or supplements thereto, the Company
will furnish to each Holder of Shares covered by such
registration statement and the underwriters, if any, copies of
all such documents proposed to be filed (excluding exhibits,
unless any such person shall specifically request exhibits),
which documents will be subject to the review of such Holders and
underwriters, and the Company will not file such registration
statement or any amendment thereto or any prospectus or any
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supplement thereto (including any documents incorporated by
reference therein) with the Commission if (A) the underwriters,
if any, shall reasonably object to such filing or (B) if
information in such registration statement or prospectus
concerning a particular selling Holder has changed and such
Holder or the underwriters, if any, shall reasonably object.
(ii) Prepare and file with the Commission such
amendments and post-effective amendments to such registration
statement as may be necessary to keep such registration statement
effective during the period referred to in Section 10(b)(i) and
to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration
statement, and cause the prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be
filed with the Commission pursuant to Rule 424 under the
Securities Act.
(iii) Furnish to the selling Holder(s) such numbers of
copies of such registration statement, each amendment thereto,
the prospectus included in such registration statement (including
each preliminary prospectus), each supplement thereto and such
other documents as they may reasonably request in order to
facilitate the disposition of the Shares owned by them.
(iv) Use its best efforts to register and qualify under
such other securities laws of such jurisdictions as shall be
reasonably requested by any selling Holder and do any and all
other acts and things which may be reasonably necessary or
advisable to enable such selling Holder to consummate the
disposition of the Shares owned by such Holder, in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to
qualify to transact business or to file a general consent to
service of process in any such states or jurisdictions.
(v) Promptly notify each selling Holder of the
happening of any event as a result of which the prospectus
included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make
the statements therein not misleading and, at the request of any
such Holder, the Company will prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the
purchasers of such Shares, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading.
(vi) Provide a transfer agent and registrar for all
such Shares not later than the effective date of such
registration statement.
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(vii) Enter into such customary agreements (including
underwriting agreements in customary form for a primary offering)
and take all such other actions as the underwriters, if any,
reasonably request in order to expedite or facilitate the
disposition of such Shares (including, without limitation,
effecting a stock split or a combination of shares).
(viii) Make available for inspection by any selling
Holder or any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such selling Holder or
underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the officers,
directors, employees and independent accountants of the Company
to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection
with such registration statement.
(ix) Promptly notify the selling Holder(s) and the
underwriters, if any, of the following events and (if requested
by any such person) confirm such notification in writing: (A) the
filing of the prospectus or any prospectus supplement and the
registration statement and any amendment or post-effective
amendment thereto and, with respect to the registration statement
or any post-effective amendment thereto, the declaration of the
effectiveness of such documents, (B) any requests by the
Commission for amendments or supplements to the registration
statement or the prospectus or for additional information, (C)
the issuance or threat of issuance by the Commission of any stop
order suspending the effectiveness of the registration statement
or the initiation of any proceedings for that purpose and (D) the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threat of initiation of any
proceeding for such purposes.
(x) Make every reasonable effort to prevent the entry
of any order suspending the effectiveness of the registration
statement and obtain at the earliest possible moment the
withdrawal of any such order, if entered.
(xi) Cooperate with the selling Holder(s) and the
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing the Shares to be sold and
not bearing any restrictive legends, and enable such Shares to be
in such lots and registered in such names as the underwriters may
request at least two (2) business days prior to any delivery of
the Shares to the underwriters.
(xii) Provide a CUSIP number for all the Shares not
later than the effective date of the registration statement.
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(xiii) Prior to the effectiveness of the registration
statement and any post-effective amendment thereto and at each
closing of an underwritten offering, (A) make such
representations and warranties to the selling Holder(s) and the
underwriters, if any, with respect to the Shares and the
registration statement as are customarily made by issuers in
primary underwritten offerings; (B) use its best efforts to
obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to
the selling Holders and the underwriters, if any, such letters to
be in customary form and covering matters of the type customarily
covered in "cold comfort" letters by underwriters in connection
with primary underwritten offerings; (C) deliver such documents
and certificates as may be reasonably requested (1) by the
holders of a majority of the Shares being sold, and (2) by the
underwriters, if any, to evidence compliance with clause (A)
above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company; and (D) obtain opinions of counsel to the Company and
updates thereof (which counsel and which opinions shall be
reasonably satisfactory to the underwriters, if any), covering
the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by the selling Holders and underwriters or
their counsel. Such counsel shall also state that no facts have
come to the attention of such counsel which cause them to believe
that such registration statement, the prospectus contained
therein, or any amendment or supplement thereto, as of their
respective effective or issue dates, contains any untrue
statement of any material fact or omits to state any material
fact necessary to make the statements therein not misleading
(except that no statement need be made with respect to any
financial statements, notes thereto or other financial data or
other expertized material contained therein). If for any reason
the Company's counsel is unable to give such opinion, the Company
shall so notify the Holders of the Shares and shall use its best
efforts to remove expeditiously all impediments to the rendering
of such opinion.
(xiv) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act,
no later than forty-five (45) days after the end of any
twelve-month period (or ninety (90) days, if such period is a
fiscal year) (A) commencing at the end of any fiscal quarter in
which the Shares are sold to underwriters in a firm or best
efforts underwritten offering, or (B) if not sold to underwriters
in such an offering, beginning with the first month of the first
fiscal quarter of the Company commencing after the effective date
of the registration statement, which statements shall cover such
twelve-month periods.
(c) After the date hereof, the Company shall not grant to any
holder of securities of the Company any registration rights which have
a priority greater than or equal to those
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granted to Holders pursuant to this Warrant without the prior written
consent of the Holder(s).
(d) The Company's obligations under Section 10(a) above with
respect to each holder of Shares are expressly conditioned upon such
holder's furnishing to the Company in writing such information
concerning such holder and the terms of such holder's proposed offering
as the Company shall reasonably request for inclusion in the
registration statement. If any registration statement including any of
the Shares is filed, then the Company shall indemnify each holder
thereof (and each underwriter for such holder and each person, if any,
who controls such underwriter within the meaning of the Securities Act)
from any loss, claim, damage or liability arising out of, based upon or
in any way relating to any untrue statement of a material fact
contained in such registration statement or any omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except for any such
statement or omission based on information furnished in writing by such
holder of the Shares expressly for use in connection with such
registration statement; and such holder shall indemnify the Company
(and each of its officers and directors who has signed such
registration statement, each director, each person, if any, who
controls the Company within the meaning of the Securities Act, each
underwriter for the Company and each person, if any, who controls such
underwriter within the meaning of the Securities Act) and each other
such holder against any loss, claim, damage or liability arising from
any such statement or omission which was made in reliance upon
information furnished in writing to the Company by such holder of the
Shares expressly for use in connection with such registration
statement.
(e) For purposes of this Section 10, all of the Shares shall be
deemed to be issued and outstanding.
11. CERTAIN NOTICES. In case at any time the Company shall propose
to:
(a) declare any cash dividend upon its Common Stock;
(b) declare any dividend upon its Common Stock payable in stock
or make any special dividend or other distribution to the holders of
its Common Stock;
(c) offer for subscription to the holders of any of its Common
Stock any additional shares of stock in any class or other rights;
(d) reorganize, or reclassify the capital stock of the Company,
or consolidate, merge or otherwise combine with, or sell of all or
substantially all of its assets to, another corporation;
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(e) voluntarily or involuntarily dissolve, liquidate or wind
up of the affairs of the Company; or
(f) redeem or purchase any shares of its capital stock or
securities convertible into its capital stock;
then, in any one or more of said cases, the Company shall give to the
Holder of the Warrant, by certified or registered mail, (i) at least
twenty (20) days' prior written notice of the date on which the books
of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights
to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up,
and (ii) in the case of such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days' prior written notice of the date when the same
shall take place. Any notice required by clause (i) shall also specify,
in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock shall be entitled
thereto, and any notice required by clause (ii) shall specify the date
on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
12. ARTICLE AND SECTION HEADINGS. Numbered and titled article and
section headings are for convenience only and shall not be construed as
amplifying or limiting any of the provisions of this Warrant.
13. NOTICE. Any and all notices, elections or demands permitted or
required to be made under this Warrant shall be in writing, signed by the party
giving such notice, election or demand and shall be delivered personally,
telecopied, or sent by certified mail or overnight via nationally recognized
courier service (such as Federal Express), to the other party at the address set
forth below, or at such other address as may be supplied in writing and of which
receipt has been acknowledged in writing. The date of personal delivery or
telecopy or two (2) business days after the date of mailing (or the next
business day after delivery to such courier service), as the case may be, shall
be the date of such notice, election or demand. For the purposes of this
Warrant:
The Address of Holder is: Sirrom Capital Corporation
Suite 200
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopy No. 615/726-1208
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with a copy to: Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx III
Telecopy No. 615/252-6359
The Address of Company is: Digital Transmission Systems, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
with a copy to: Xxxxxxxxxx, Xxxxxx & Xxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
14. SEVERABILITY. If any provisions(s) of this Warrant or the
application thereof to any person or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Warrant and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
15. ENTIRE AGREEMENT. This Warrant between the Company and Holder
represents the entire agreement between the parties concerning the subject
matter hereof, and all oral discussions and prior agreement are merged herein.
16. GOVERNING LAW AND AMENDMENTS. This Warrant shall be construed and
enforced under the laws of the State of Tennessee applicable to contracts to be
wholly performed in such State. No amendment or modification hereof shall be
effective except in a writing executed by each of the parties hereto.
17. COUNTERPARTS. This Warrant may be executed in any number of
counterparts and be different parties to this Warrant in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Warrant.
18. CONSENT TO JURISDICTION; EXCLUSIVE VENUE. The Company hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Middle District of Tennessee and of all Tennessee state courts sitting in
Davidson County, Tennessee, for the purpose of any litigation to which Holder
may be a party and which concerns this Warrant. It is further agreed that
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venue for any such action shall lie exclusively with courts sitting in Davidson
County, Tennessee, unless Holder agrees to the contrary in writing.
19. WAIVER OF TRIAL BY JURY. HOLDER AND THE COMPANY HEREBY KNOWINGLY
AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS,
PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE,
AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS WARRANT.
20. EQUITY PARTICIPATION. This Warrant is issued in connection with
the Loan Agreement. It is intended that this Warrant constitute an equity
participation under and pursuant to T.C.A. ss.00-00-000, et seq. and that equity
participation be permitted under said statutes and not constitute interest on
the debt obligations of the Company to the Holder. If under any circumstances
whatsoever, fulfillment of any obligation of this Warrant, the Loan Agreement,
or any other agreement or document executed in connection with the Loan
Agreement, shall violate the lawful limit of any applicable usury statute or any
other applicable law with regard to obligations of like character and amount,
then the obligation to be fulfilled shall be reduced to such lawful limit, such
that in no event shall there occur, under this Warrant, the Loan Agreement, or
any other document or instrument executed in connection with the Loan Agreement,
any violation of such lawful limit, but such obligation shall be fulfilled to
the lawful limit. If any sum is collected in excess of the lawful limit, such
excess shall be applied to reduce the principal amount of the debt obligations
of the Company to the Holder.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
date first above written.
COMPANY:
DIGITAL TRANSMISSION SYSTEMS, INC.,
a Tennessee corporation
By: /s/
-----------------------------------
Title: President and CEO
------------------------------
HOLDER:
SIRROM CAPITAL CORPORATION,
a Tennessee corporation
By: /s/
-----------------------------------
Title: Vice President
------------------------------
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