EXHIBIT 10.1
[EXECUTION COPY]
This Warrant and the securities to be issued upon exercise hereof have not
been registered under the Securities Act of 1933 (the "Securities Act"), or the
securities laws of any state. Neither this Warrant nor any interest herein may
be offered, sold, transferred, pledged, hypothecated or otherwise disposed of
except as expressly provided for herein. Neither the securities issuable upon
exercise hereof nor any interest therein may be offered, sold, transferred,
pledged, hypothecated or otherwise disposed of except pursuant to (i) an
effective registration statement under the Securities Act and any applicable
state securities laws or (ii) an exemption from the registration requirements of
the Securities Act and any applicable state securities laws, such exemption to
be evidenced by such documentation as the Company may reasonably request.
TELEMONDE, INC.
WARRANT
Dated: September 1, 1999
No: 2
THIS IS TO CERTIFY THAT, for value received, Communications Collateral
Limited (the "Holder"), pursuant to Section 2.2 hereof, is entitled to purchase
from Telemonde, Inc., a Nevada corporation (the "Company"), during the Exercise
Period up to 4,526,231 shares (each a "Share" and collectively, the "Shares") of
common stock, $.001 par value per share, of the Company (the "Common Stock"),
which number represents seven percent of the Issued Share Capital of the Company
immediately prior to the Subsequent Financing, at the Exercise Price per Share,
subject to adjustment and upon the terms and conditions as hereinafter provided.
Certain terms used in this Warrant are defined in Article IV.
This Warrant is being issued in connection with the Letter Agreement.
ARTICLE I
EXERCISE OF WARRANT
1.1 Method of Exercise. To exercise this Warrant in whole or in
------------------
part, the Holder shall deliver to the Company, at the offices of the Warrant
Agent, (a) this Warrant, (b) a written notice, in substantially the form of the
Subscription Notice attached hereto as Exhibit A (the "Subscription Notice"), of
---------
such Holder's election to exercise this Warrant, which notice shall specify the
number of Shares to be purchased (in lots of not less than 1,000 Shares), the
denominations of the Share certificate or certificates desired and the name or
names in which such certificates are to be registered and (c) payment of the
Exercise Price with respect to such Shares. Such payment shall be made in
immediately available funds or by certified check.
The Company shall as promptly as practicable and in any event within
five Business Days after receipt of the Subscription Notice, execute and deliver
or cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of Shares to which
the Holder is entitled. The Share certificate or certificates so delivered shall
be in such denominations as may be specified in such notice or, if such notice
shall not specify denominations, in denominations of 1,000 Shares each, and
shall be issued in the name of the Holder or such other name or names as shall
be designated in such notice. Such certificate or certificates shall be deemed
to have been issued, and the Holder or any other person so designated to be
named therein shall be deemed for all purposes to have become holders of record
of such Shares, as of the date the aforementioned notice is received by the
Company. If this Warrant shall have been exercised only in part, unless this
Warrant shall have expired, the Company shall, at the time of delivery of the
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights to purchase the remaining Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or, at the
request of the Holder, appropriate notation may be made on this Warrant which
shall then be returned to the Holder. The Company shall pay all expenses, taxes
and other charges payable in connection with the preparation, issuance and
delivery of Share certificates and new Warrants, except that, if Share
certificates shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all transfer taxes payable as a result of such
transfer shall be paid by the Holder at the time of delivering the
aforementioned notice of exercise or promptly upon receipt of a written request
of the Company for payment. The Company shall not be required to pay any tax or
taxes that may be payable with respect to any transfer of this Warrant.
1.2 Shares to be Fully Paid and Nonassessable; Reservation and
----------------------------------------------------------
Listing. All Shares issued upon the exercise of this Warrant shall be validly
-------
issued, fully paid and nonassessable and the Company shall at all times reserve
and keep available out of its authorized Shares, solely for the purpose of
issuance upon the exercise of this Warrant, such number of Shares as shall be
issuable upon the exercise hereof. If the Shares are then listed on any
national securities exchange (as such term is used in the Exchange Act) or
quoted on Nasdaq, the Company shall cause the Shares issuable upon exercise of
this Warrant to be duly listed or quoted thereon, as the case may be.
1.3 No Fractional Shares to be Issued. The Company shall not be
---------------------------------
required to issue fractions of Shares upon exercise of this Warrant. If any
fraction of a Share would, but for this Section, be issuable upon any exercise
of this Warrant, in lieu of such factional Share the Company shall pay to the
Holder in cash, an amount equal to the same fraction of the Market Price per
Share of outstanding Shares at the close of business on the Business Day
immediately prior to the date of such exercise.
2
1.4 Maintenance of Percentage of Shares to be Issued. To the extent
------------------------------------------------
there is an increase or decrease in the Issued Share Capital prior to the
Subsequent Financing, the Shares issuable under this Warrant will be increased
or decreased accordingly such that the Shares will represent seven percent of
the Issued Share Capital of the Company immediately prior to the Subsequent
Financing.
1.5 Share Legend. Each certificate for Shares issued upon exercise
------------
of this Warrant, unless at the time of exercise such Shares are registered under
the Securities Act, shall bear the following legend:
This security has not been registered under the Securities Act of
1933 (the "Securities Act"), or the securities laws of any state and
may not be offered, sold, transferred, pledged, hypothecated or
otherwise disposed of except pursuant to (i) an effective registration
statement under the Securities Act and any applicable state securities
laws or (ii) an exemption from the registration requirements of the
Securities Act and any applicable state securities laws, such
exemption to be evidenced by such documentation as the issuer may
reasonably request.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless the holder of such
certificate shall have delivered to the Company an opinion of counsel, in
writing and addressed to the Company (which counsel and opinion shall be
reasonably acceptable to the Company), that the securities represented thereby
need no longer be subject to restrictions on resale under the Securities Act or
any state securities laws.
1.6 Cashless Exercise. Notwithstanding any provisions herein to the
-----------------
contrary, if the Market Price per Share is greater than the Exercise Price (as
of the date of calculation as set forth below), in lieu of exercising this
Warrant for cash, the Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Subscription Notice and notice of such election in which
event the Company may issue to the Holder a number of shares of Common Stock
equal to the result of calculating the following quotient:
Y(A-B)
------
A
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at the
date of such calculation)
3
A = the Market Price per Share (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
The date of calculation pursuant to this Section 1.6 shall be the Business
Day immediately preceding the date of the Subscription Notice.
Notwithstanding any provisions herein to the contrary, in the event the
Warrant is exercised in connection with the Company's initial public offering of
Common Stock, A, above, will equal the per share offering price to the public of
the Company's initial public offering. Further, notwithstanding the foregoing,
the Company may decline to accept Holder's election for cashless exercise at the
time of presentation of this Warrant and Subscription Notice.
ARTICLE II
WARRANT AGENT; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1 Warrant Agent. Until such time, if any, as an independent agent
-------------
shall be appointed by the Company to perform services with respect to this
Warrant described herein (the "Warrant Agent"), the Company shall perform the
obligations of the Warrant Agent provided herein at its principal office address
or such other address in the United States as the Company shall specify by prior
written notice to the Holder.
2.2 No Transfer. Except as provided herein, the Holder of this
-----------
Warrant, by its acceptance hereof, covenants and agrees that this Warrant and
any interest herein may be sold, transferred, pledged or hypothecated only to
Affiliates. Neither the Shares issuable upon exercise hereof nor any interest
therein may be offered, sold, transferred, pledged, hypothecated or otherwise
disposed of, except pursuant to (i) an effective registration statement under
the Securities Act and any applicable state securities laws or (ii) an exemption
from the registration requirements of the Securities Act and any applicable
state securities laws, such exemption to be evidenced by such documentation as
the Company may reasonably request, including an opinion of counsel, in writing
and addressed to the Company (which counsel and opinion shall be reasonably
satisfactory to the Company), that such transfer is not in violation of the
Securities Act and any applicable state laws. The Company shall treat the Holder
as the holder and owner hereof for all purposes (and shall not be affected by
any notice to the contrary).
2.3 Division or Combination of Warrants. This Warrant may be divided
-----------------------------------
(in lots exercisable for not less than 1,000 Shares) or combined with other
Warrants upon surrender hereof. The Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
4
2.4 Loss, Theft, Destruction of Warrant Certificates. Upon receipt
------------------------------------------------
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company, at the Holder's expense, will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new warrant of like tenor
and representing the right to purchase the same aggregate number of Shares.
ARTICLE III
ADJUSTMENT PROVISIONS
3.1 Adjustments Generally. The Exercise Price and the number of
---------------------
Shares (or other securities or property) issuable upon exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of certain
events, as provided in this Article III.
3.2 Stock Dividends; Stock Splits; Reverse Stock Splits;
----------------------------------------------------
Reclassifications. If the Company, at any time this Warrant is outstanding, (a)
-----------------
declares a dividend or other distribution on its Shares in shares of any class
or series of capital stock, (b) subdivides its outstanding Shares, (c) combines
its outstanding Shares into a smaller number of Shares or (d) issues any shares
of its capital stock in a reclassification of the Shares, the number of Shares
purchasable upon exercise of this Warrant immediately prior to the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Holder shall
thereafter be entitled to receive for this Warrant the kind and number of Shares
that the Holder would have owned or have been entitled to receive after the
happening of any of the events described above, had this Warrant been fully
exercised immediately prior to the happening of such event or any record date
with respect thereto. An adjustment made pursuant to this Section 3.2 shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.
3.3 Adjustments for the Issuances of Equity at less than the Exercise
-----------------------------------------------------------------
Price then in Effect.
--------------------
(a) If the Company, at any time this Warrant is outstanding, (i) fixes
a record date for the distribution of any rights, options or warrants entitling
the holders thereof to subscribe for or purchase Shares (or Convertible
Securities), whether or not immediately exercisable, or (ii) issues additional
Shares, and the price per share at which the Shares are issued or are issuable
upon exercise (such price at which the Shares are issuable upon exercise to be
determined by dividing (x) the total amount receivable by the Company in
consideration of the issuance of such rights, options, warrants or Convertible
Securities, if any, plus the total consideration payable to the Company upon
exercise, conversion or exchange thereof, by (y) the total number of Shares
covered by such rights, options, warrants or Convertible Securities) is lower
than the Exercise Price per Share at the record date for such issuance, the
number of Shares the Holder would be entitled to subscribe for or purchase upon
exercise of this Warrant
5
immediately prior to the record date shall be adjusted by multiplying the number
of Shares theretofore purchasable upon exercise of this Warrant by a fraction,
the numerator of which shall be the number of Shares outstanding immediately
prior to the issuance of such rights, options, warrants, Convertible Securities
or Shares plus the number of additional Shares offered for subscription or
purchase or issuable upon conversion or exchange, and the denominator of which
shall be the number of Shares outstanding immediately prior to the issuance of
such rights, options warrants, Convertible Securities or Shares plus the number
of Shares which the aggregate offering price of the total number of Shares or
Convertible Shares so offered would purchase at such Exercise Price. Such
adjustment shall be made whenever such rights, options, warrants, Convertible
Securities or Shares are issued, and shall become effective on the distribution
date, retroactive to the record date for the determination of shareholders
entitled to receive such rights, options, warrants, Convertible Securities or
Shares. Notwithstanding anything herein to the contrary, any Shares issued or
issuable pursuant to this Section 3.3(a) shall be in addition to the seven
percent of the Issued Share Capital to which the Purchaser is entitled under
this Warrant.
(b) If rights, options or warrants distributed pursuant to Section
3.3(a) (i) are deemed to be transferred with the Shares, (ii) are not
exercisable and (iii) are also issued in respect of future issuances of Shares,
in each case until the occurrence of a specified event or events ("Trigger
Event"), such rights, options or warrants shall be deemed not to have been
distributed for purposes of this Article III (and no adjustments under this
Article III will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights, options and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) shall be made as
provided in this Article III.
3.4 Expiration of Rights; Options and Conversion Privileges. Upon
-------------------------------------------------------
the expiration of any rights, options or warrants, the issuance of which caused
an adjustment pursuant to this Article III, if any thereof shall not have been
exercised, the Exercise Price and the number of Shares purchasable upon the
exercise of this Warrant shall, upon such expiration, be readjusted and shall
thereafter, upon any fixture exercise, be such as they would have been had they
been originally adjusted (or had the original adjustment not been required, as
the case may be) as if (a) the only Shares so issued were the Shares, if any,
actually issued or sold upon the exercise of such rights, options, warrants or
conversion or exchange rights and (b) such Shares, if any, were issued or sold
for the consideration actually received by the Company upon such exercise plus
the consideration, if any, actually received by the Company for issuance, sale
or grant of all such rights, options, warrants or conversion or exchange rights
whether or not exercised; provided, further, that no such readjustment shall
have the effect of increasing the Exercise Price by an amount, or decreasing the
number of shares purchasable upon exercise of this Warrant by a number, in
excess of the amount or number of the adjustment initially made in respect to
the issuance, sale or grant of such rights, options, warrants or conversion or
exchange rights.
6
3.5 Merger or Consolidation.
-----------------------
(a) Subject to the provisions of Section 3.5(b), in case of the
consolidation of the Company with, or merger of the Company with or into, or
sale of all or substantially all of the properties and assets of the Company to
any person and in connection therewith consideration is payable to holders of
Shares (or other securities or property purchasable upon exercise of this
Warrant) in exchange therefor, this Warrant shall remain subject to the terms
and conditions set forth herein and this Warrant shall, after such
consolidation, merger or sale, entitle the Holder to receive upon exercise the
number of shares of capital stock or other securities or property (including
cash) of the Company, or of such person resulting from such consolidation or
surviving such merger or to which such sale shall be made, as the case may be,
that would have been distributable or payable on account of the Shares (or other
securities or properties purchasable upon exercise of Warrants) if such Holder's
Warrants had been exercised immediately prior to such merger, consolidation or
sale (or, if applicable, the record date therefor), and in any such case the
provisions of this Warrant with respect to the rights and interests thereafter
of the Holder of this Warrant shall be appropriately adjusted by the Board of
Directors of the Company in good faith so as to be applicable, as nearly as may
be reasonably be, to any shares of stock or other securities or any property
thereafter deliverable on the exercise of this Warrant.
(b) Notwithstanding the foregoing, (i) if the Company merges or
consolidates with or into, or sells all or substantially all of its property and
assets to, another person and consideration is payable to holders of Shares in
exchange for their Shares in connection with such merger, consolidation or sale
which consists solely of cash or (ii) in the event of the dissolution,
liquidation or winding up of the Company, then the Holder shall be entitled to
receive distributions on the date of such event on an equal basis with holders
of Shares (or other securities issuable upon exercise of this Warrant) as if
this Warrant had been exercised immediately prior to such event, less the
aggregate Exercise Price. Upon receipt of such payment, if any, the right of the
Holder shall terminate and cease and this Warrant shall expire.
3.6 Adjustment Rules.
----------------
(a) Any adjustments pursuant to this Article III shall be made
successively whenever an event referred to herein shall occur.
(b) No adjustment shall be made pursuant to this Article III in
respect of the issuance from time to time of Shares solely as a result of the
exercise of this Warrant.
(c) If the Company shall set a record date to determine the holders of
Shares for purposes of an action specified in this Article III and shall abandon
such action prior to effecting such action, then no adjustment shall be made
pursuant to this Article III in respect of such action.
7
(d) If the aggregate number of Shares issuable upon the exercise of
this Warrant shall be adjusted pursuant to this Article III, the Exercise Price
per Share shall be appropriately adjusted.
(e) If the occurrence of one event with respect to the Company could
result in two or more adjustments pursuant to this Article III, then the Board
of Directors of the Company shall, in its sole discretion, determine which such
adjustment shall result from such event.
3.7 Notice of Adjustment. As promptly as practicable after any
--------------------
action is taken (or sooner if the Company determines to take any action) which
requires an adjustment or readjustment pursuant to this Article III, the Company
shall give notice to the Holder of such event, and, if determinable, the
required adjustment and the computation thereof. If the required adjustment is
not determinable at the time of such notice, the Company shall give notice to
the Holder of such adjustment and computation promptly after such adjustment
becomes determinable.
3.8 No Adjustment. The Company hereby represents and warrants that
-------------
there has been no event that would cause an adjustment to this Warrant pursuant
to this Article III from May 14, 1999 until the date hereof.
ARTICLE IV
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"Affiliates" means the original investors of the Holder and their
----------
Affiliates, as such term is defined in the Exchange Act.
"Business Day" means each day in which banking institutions in New
------------
York are not required or authorized by law or executive order to close.
"Company" shall have the meaning set forth in the first paragraph of
-------
this Warrant.
"Convertible Securities" means any securities which are convertible
----------------------
into or exercisable or exchangeable for Shares (whether or not immediately
exercisable, convertible or exchangeable).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"Exercise Period" means any Business Day until three years from the
---------------
date of the Subsequent Financing.
8
"Exercise Price" shall mean the lesser of (i) $5.25 per Share or (ii)
--------------
in the event the closing sales price of a share of Common Stock is below $5.25
for any 20 consecutive trading days between the date of the issuance of this
Warrant and the date of an underwritten initial public offering, then the
average of closing sales price per Share during such 20 day period.
"Expiration Date" means the Business Day immediately following the
---------------
last Business Day of the Exercise Period.
"Holder" shall have the meaning set forth in the first paragraph of
------
this Warrant.
"Issued Share Capital" means (1) all shares of issued and outstanding
--------------------
capital stock of the Company, (2) all shares of capital stock of the Company
issuable upon the exercise of any right to subscribe for or convert any debt or
other instrument into or to exercise any option or warrant for such shares of
capital stock, and (3) the shares issuable upon the exercise of the this
Warrant.
"Letter Agreement" means the Letter Agreement, dated as of April 15,
----------------
1999, between Rhone Financial Indemnity Re Limited, as sole member of the
predecessor of the Company, and the Holder.
"Market Price per Share" means, with respect to the Shares, on any
----------------------
particular date (a) the closing bid price per share of the Common Stock on such
date on either the Nasdaq National Market or the Nasdaq Small Cap Market or
other national securities exchange on which the Common Stock has been listed or
if there is no such price on such date, then the closing bid price on such
national securities exchange or market on the date nearest preceding such date,
or (b) if the Common Stock is not listed on the Nasdaq National Market, the
Nasdaq Small Cap Market or any national securities exchange or market, the
closing bid for a share of Common Stock in the over-the-counter market, as
reported by the Nasdaq Small Cap Market at the close of business on such date,
or (c) if the Common Stock is not quoted on the Nasdaq Small Cap Market, the
closing bid price for a share of Common Stock in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its sections of reporting prices), then the average of
the "Pink Sheet" quotes for the relevant conversion period as determined by the
Holder, or (e) if the Common Stock is no longer publicly traded, the fair market
value of a share of Common Stock as determined by a nationally recognized
independent appraiser (an "Appraiser") selected in good faith by the Holder;
provided, however, that the Company, after receipt of the determination by such
-------- -------
Appraiser, shall have the right to select an additional Appraiser, in which
case, the fair market value shall be equal to the average of the determinations
by each such Appraiser. "Trading Day" means (a) a day on which the Common Stock
is traded on the Nasdaq Small Cap Market or principal national securities
exchange or market on which the Common Stock has been listed, or (b) if the
Common Stock is not listed on the Nasdaq Small Cap Market or any stock exchange
or market, a day on which the Common Stock is traded in the over-the-counter
market, as reported by the Nasdaq Small Cap Market, or (c) if the Common Stock
is not quoted on the Nasdaq Small Cap
9
Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices).
"Nasdaq" means The Nasdaq Stock Market.
------
"Securities Act" means the Securities Act of 1933.
--------------
"Shares" shall have the meaning set form in the first paragraph of
------
this Warrant and shall refer, as the context requires, to all shares of Common
Stock issued by the Company.
"Subsequent Financing" means the date on which the Company issues
--------------------
equity securities pursuant to an offering of at least $10,000,000.
"Warrant Agent" shall have the meaning set forth in Section 2.1.
-------------
ARTICLE V
MISCELLANEOUS
5.1 Expiration. This Warrant shall expire and be of no further force
----------
and effect on the Expiration Date.
5.2 Notices. All notices, consents, waivers, and other
-------
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
In the case of the Holder:
Communications Collateral Limited
P O Box 438
The Tropic Isle Building
Road Town
Tortola
British Virgin Islands
Attn: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
10
copy to: Xxxxx Xxxxxxxxxxx, Esquire
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: (000) 000-0000
In case of the Company:
Telemonde, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
copy to: X. Xxxxxx Durham, Jr., Esquire
Baker, Donelson, Bearman & Xxxxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile No.: (000) 000-0000
5.3 Waivers; Amendments. No failure or delay of the Holder in
-------------------
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the Holder.
5.4 GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE
OF LAW PRINCIPLES.
5.5 Survival of Agreements. All covenants and agreements made by the
----------------------
parties herein shall be considered to have been relied upon by each party and
shall survive the issuance and delivery of this Warrant, and shall continue in
full force and effect so long as this Warrant is outstanding.
5.6 Covenants to Bind Successor and Assigns. All covenants,
---------------------------------------
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its successors and assigns, whether so expressed or
not.
11
5.7 Withholding. The Company shall be entitled to withhold any
-----------
amounts required to be withheld under applicable law from any amounts to be paid
to the Holder hereunder.
5.8 Severability. In case any one or more of the provisions
------------
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
5.9 Section Headings. The section headings used herein are for
----------------
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
5.10 No Rights as Stockholder. This Warrant shall not entitle the
------------------------
Holder to any rights as a stockholder of the Company and no dividends shall be
payable or accrue in respect of this Warrant or the interest represented hereby
or the Shares underlying this Warrant exercisable hereunder unless and until and
only to the extent this Warrant shall be exercised.
5.11 No Requirement to Exercise. Nothing contained in this Warrant
--------------------------
shall be construed as requiring the Holder to exercise this Warrant.
5.12 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
5.13 Facsimiles. This Warrant may be executed by a facsimile
----------
signature, which shall have the same force and effect as a manually executed
signature.
5.14 Registration Rights Agreement. The Holder hereof shall benefit
-----------------------------
from the registration rights granted under the Registration Rights Agreement in
accordance with the terms thereof.
12
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first above written.
TELEMONDE, INC.
By: /s/ Xxxx Xxxxxx
------------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: President
------------------------------
Acknowledged and Agreed:
COMMUNICATIONS COLLATERAL LIMITED
By: /s/ Xxxxxx Xxxxx
----------------------------------
Name: Xxxxxx Xxxxx
-----------------------------
Title: Attorney-in-Fact
----------------------------
13
Exhibit A
---------
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To: Telemonde, Inc.
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the attached Warrant for, and to purchase thereunder,
___________ Shares, as provided for therein, and tenders herewith payment of the
Exercise Price in immediately available funds.
Please issue a certificate or certificates for such Shares in the
following name or names and denominations:
If said number of Shares shall not be all the Shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such Shares less any fraction of a
Share paid in cash.
Dated:
[THE HOLDER]
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
14
