1
Page 1
EXHIBIT 10.2
SUBSCRIPTION AGREEMENT
INTERAMERICAS COMMUNICATIONS CORPORATION
InterAmericas Communications Corporation
X000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned, NU Investments, LLC (the "Purchaser"), understands
that InterAmericas Communications Corporation, a Texas corporation (the
"Company"), is offering for sale its 7% Convertible Debentures, in the form
attached hereto as EXHIBIT A, IN the aggregate original principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000) (the "Debentures"), and a
warrant, in the form attached hereto as EXHIBIT B (the "Warrant"), for the
purchase of an aggregate of One Hundred Thousand (100,000) shares of its common
stock, $.00 1 par value per share (the "Common Stock"). The Purchaser further
understands that the offering is being made without registration of the
Debentures, the Warrant or the shares of Common Stock issuable upon conversion
thereof (the Debentures, the Warrant and the shares of Common Stock issuable
upon conversion thereof are hereinafter sometimes referred to as the
"Securities") under the Securities Act of 1933, as amended (the "Securities
Act"), and is being made only to "accredited investors" (as defined in Rule 50
T of Regulation D under the Securities Act).
1. Subscription. Subject to the terms and conditions hereof the
Company agrees to sell, issue and deliver, and Purchaser hereby offers to
purchase and subscribes for (i) Debentures in the aggregate original principal
amount of $T,500,000, and (ii) a Warrant for the purchase of 100,000 shares of
Common Stock, for a purchase price equal to the aggregate original principal
amount of the Debentures so to be purchased.
2. The Closing. The closing of the transaction contemplated
hereby (the "Closing") shall lake place on February 3, 1997 at the offices of
Xxxxxxxx & Xxxxxx, 000 00xx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, at 9:30 a.m. or at
such other time and place as shall be agreed to by the Company and the
Purchaser (the "Closing Date"). At the Closing, payment shall be made by wire
transfer against delivery of the Debentures and the Warrant to be purchased by
the Purchaser. In addition, the Company shall deliver to the Purchaser an
opinion of Company counsel in the form of EXHIBIT C.
3. Securities Act Registration.
3.1. The Company shall use its best efforts to register
promptly under the Securities Act, at the Company's expense (other than
underwriting discounts and commissions, if any), all of the shares of Common
Stock issuable upon the conversion of the Debentures and exercise of the
Warrants issued to the Purchaser (the "Registrable Shares") and in that
connection shall file, by no later than sixty (60) days after the date hereof a
registration statement with respect to the Registrable Shares (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC"). Notice of effectiveness of the Registration Statement shall be
furnished promptly to the Purchaser. The Company shall use its best efforts to
maintain the effectiveness of the Registration Statement and from time to time
will amend or supplement such Registration Statement and the prospectus
contained therein as and to the extent necessary to comply with the Securities
Act. The effectiveness of the Registration Statement shall be maintained with
respect to the Registrable Shares until all of the Registrable Shares have been
sold pursuant thereto or such date as all of the Registrable Shares may be sold
during any one period of three (3) consecutive months pursuant to Rule 144
under the Securities Act or otherwise without registration.
3.2 (a) If the Company shall determine to register any of its
securities either for its own account or the account of a security holder or
holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, or a registration
relating to a corporate reorganization or other transaction under Rule 145, or
a registration on any registration form that does not permit secondary sales,
the Company will:
(i) promptly give to each Holder written notice
thereof; and
(ii) use its best efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), except as set forth in Section 3.2(b) below, and in any
underwriting involved therein, all the
2
Page 2
Registrable Shares specified in a written request or requests, made by any
Holder and received by the Company within ten (10) days after the written
notice from the Company described in clause (i) above is mailed or delivered by
the Company. Such written request may specify all or a part of a Holder's
Registrable Shares provided that such Registrable Shares have not previously
been registered pursuant to the Registration Statement filed pursuant to
Section 3.1
(b) If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.2(a). In such event, the right of any Holder to
registration pursuant to this Section 3.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Shares in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall (together with the Company and the other holders of securities of the
Company with registration rights to participate therein distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected by the Company.
Notwithstanding any other provision of this Section
3.2, if the representative of the underwriters advises the Company in writing
that marketing factors require a limitation on the number of shares to be
underwritten, the representative may (subject to the limitations set forth
below) exclude all Registrable Shares from, or limit the number of Registrable
Shares to be included in, the registration and underwriting. The Company shall
so advise all holders of securities requesting registration, and the number of
shares of securities that are entitled to be included in the registration and
underwriting shall be allocated first to the Company for securities being sold
for its own account. IF any person does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice from the Company
or the underwriter. Any Registrable Shares or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
3.3. In the event that the Company registers under the
Securities Act any of the Registrable Shares held by the Purchaser, the Company
shall indemnify and' hold harmless the Purchaser and each underwriter of such
shares (including any broker or dealer through whom such of the shares may be
sold) and each person, if any, who controls the Purchaser or any such
underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
from and against any and all losses, claims, damages, expenses or liabilities,
joint or several, to which they or any of them become subject under the
Securities Act or the Exchange Act or otherwise, and, except as hereinafter
provided, shall reimburse the Purchaser and each of the underwriters and each
such controlling person, if any, for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or in the prospectus (or the
Registration Statement or prospectus as from time to time amended or
supplemented by the Company) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, unless
such untrue statement or omission was made in such Registration Statement or
prospectus in reliance upon and in conformity with information furnished in
writing to the Company in connection therewith by the Purchaser (insofar as
indemnification of the Purchaser is concerned) or any underwriter (insofar as
indemnification of any such underwriter is concerned) relating thereto
expressly for use therein. Promptly after receipt by the Purchaser or any
underwriter or any person controlling any of them, as the case may be, of
notice of a claim to which the foregoing indemnification applies, the Purchaser
or such other person shall notify' the Company in writing of the commencement
thereof and, subject to the provisions hereinafter stated, the Company shall
assume the defense of such action (including the employment of counsel, who
shall be counsel reasonably satisfactory to the Purchaser or such underwriter
or controlling person, as the case may be, and the payment of expenses) insofar
as such action shall relate to any alleged liability in respect of which
indemnity may be sought against the Company. The Purchaser or any underwriter
or any such controlling person shall have the right to employ separate counsel
in any such action and to participate in the defense thereof but the fees and
expenses of such counsel shall not be at the expense of the Company unless: (i)
the employment of such counsel has been specifically authorized by the Company,
(ii) the Company has failed to assume the defense and employ counsel, or (iii)
the named parties of any such action, suit or proceeding (including any
impleaded parties) include both the person or persons seeking indemnification
(the "indemnified person") and the Company and such indemnified person shall
have been advised by its counsel that representation of the indemnified person
and the Company by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed) due to actual or potential differing interests
between them (in which case the Company shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such indemnified
person). The Company shall not be liable to indemnify any person for any
settlement by such person of any such action effected without the Company's
consent.
3
Page 3
3.4. The Purchaser shall indemnify the Company, its officers
and directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against all losses, claims, damages, expenses or liabilities or actions to
which they or any of them become subject under the Securities Act or the
Exchange Act or otherwise, and shall reimburse the Company, its officers and
directors and each such controlling person, if any, for any legal or other
expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims damages, expenses, liabilities or
actions arise out of or are based upon any information relating to the
Purchaser furnished by or on behalf of the Purchaser in writing specifically
for inclusion in such Registration Statement Notwithstanding the above, the
liability of the Purchaser under this' Section 3.4 shall not exceed the
proceeds (net of underwriting discounts or commissions) received by the
Purchaser upon the sale of the Registrable Shares.
3.5. Any losses, claims, damages, liabilities and reasonable
expenses for which an indemnified party is entitled to indemnification under
Sections 3.3 and 3.4 of this Agreement shall be paid by the indemnifying party
to the indemnified party as such losses, claims, damages, liabilities and
expenses are incurred.
3.6. The Company shall prepare and file with the SEC such
amendments and supplements to the Registration Statement, and the prospectus
used in connection with such Registration Statement as, in the opinion of the
counsel to the Company, may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Registration Statement.
3.7 The Company shall notify each seller of Registrable
Shares covered by the Registration Statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or incomplete in
light of the circumstances then existing, and at the request of any such
seller, prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such shares, such prospectus shall
not include any untrue statement of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
incomplete in light of the circumstances then existing.
3.8. The Company shall furnish to the Purchaser such number
of copies of a prospectus in conformity with the requirements of the Securities
Act, and such other documents as may reasonably be requested in order to
facilitate the disposition of the Registrable Shares owned by the Purchaser.
3.9. The Company shall use its best efforts to register and
qualify the securities covered by such Registration Statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Purchaser; provided, however, that the Company shall not be
required in connection therewith, or as a condition thereto, to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act.
3.10. The Company shall notify each holder of Registrable
Shares covered by such Registration Statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act and of
the happening of any event as a result of which the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing.
3.11. [Reserved]
3.12 The Company shall use its best efforts to maintain the
listing of its Common Stock on The Nasdaq SmallCap Market (or on The Nasdaq
National Market, the American Stock Exchange or the New York Stock Exchange),
for at least the thirty-six (36) month period commencing on the Closing Date.
3.13 The Company will make and keep public information
regarding the Company available as those terms are understood and defined in
Rule 144 under the Securities Act, at all times from and after ninety (90) days
following the effective date of the initial registration statement filed by the
Company under the Securities Act; and
3.14 The Company will file with the SEC in a timely manner
all reports and other documents required of
4
Page 4
the Company under the Securities Act and the Securities Exchange Act of 1934,
as amended, for at least the thirty-six (36) month period commencing on the
Closing Date.
3.15 In the event that all of the Registrable Shares have not
been registered for resale on or before June 30, 1997, the Company shall, for
each day or portion thereof that said Registration Statement is not declared
effective, in addition to the interest accruing at the rate of 7% per annum
otherwise payable pursuant to the terms of the Debentures, pay the Purchaser
the premium set forth in Section 1 of the Debentures
4. Representations Warranties and Covenants of the Company. The
Company represents and warrants to the Purchaser as follows, such
representations and warranties to be true and correct as of the Closing Date.
(a) The Common Stock issuable upon the conversion of the
Debentures has been duly authorized and, when issued and delivered to the
Purchaser in accordance with the terms of said Debentures, will be validly
issued, fully paid and nonassessable.
(b) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Texas with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as currently conducted, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to
register or qualify does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of the Company.
(c) The Company has registered its Common Stock pursuant to
Section 12 of the Exchange Act and the Common Stock is listed and trades on The
Nasdaq SmallCap Market. The Company has filed all material required to be filed
pursuant to all reporting obligations under either Section 13(a) or 15(d) of
the Exchange Act for a period of at least twelve (12) calendar months
immediately preceding the offer or sale of the Debentures (or for such shorter
period that the Company has been required to file such material).
(d) Neither the issuance and sale of the Securities, the
execution, delivery or performance of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official or conflicts or will conflict with or
constitutes or will constitute a breach O{ or a default under, the certificate
of incorporation or by-laws, or other organizational documents, of the Company
or any of its subsidiaries or (ii) conflicts or will conflict with, or
constitutes or will constitute a material breach of, or default under, any
material agreement, indenture, lease or other instrument to which the Company
or any of its subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate any statute,
law, or any of its subsidiaries or any of their respective properties, or will
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to
the terms of any agreement or instrument to which any of them is a party or by
which any of them may be bound or to which any of the property, or assets of
any of them is subject.
(e) The execution and delivery O{ and by the performance by
the Company of its obligations under this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, and the Company has full corporate and legal power to enter into
this Agreement and perform all of its obligations hereunder.
(f) As of October 31, 1996, the Company has authorized Fifty
Million (50,000,000) shares of Common Stock, $.001 par value per share, of
which 16,152,518 shares are issued and outstanding and Ten Million (10,000,000)
shares of preferred stock, 5.001 par value per share, of which none are issued
and outstanding. All such shares have been duly and validly issued and are
fully paid and nonassessable. Except as set forth on SCHEDULE 4(f) attached
hereto, the Company has outstanding no other shares of any class of capital
stock. There are no subscriptions, options, warrants, scrip, rights, calls,
convertible securities, or any other similar agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock,
or other securities of the Company obligating, or which may obligate the
Company to issue, deliver or sell or cause to be issued, delivered or sold,
additional shares of its capital stock or obligating or which may obligate the
Company to grant, extend or enter into any such subscription, option, warrant,
scrip, right, call, convertible security, or other similar agreement
arrangement, or similar commitment.
5
Page 5
(g) There are no legal or administrative proceedings or
investigation of any kind or nature now pending or to the knowledge of the
Company, threatened before any court or administrative body against the Company
nor is the Company subject to any unsatisfied judgment, order or decree of any
court of law, administrative board, regulatory agency, arbitrator or
arbitration panel.
(h) Since September 30, 1996, the business of the Company has
been operated only in the ordinary and normal course, and there has not been,
after such date, any material adverse change in the earnings, assets,
liabilities, financial condition or in the operation of its businesses.
5. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
(a) The Purchaser is aware that no federal or state agency
has passed upon the Common Stock or made any finding or determination
concerning the fairness of this investment and that this investment is subject
to numerous risks, including those set forth on SCHEDULE 5(a) hereto.
(b) The Purchaser has had an opportunity to ask questions of
and receive answers from representatives of the Company, concerning the terms
and conditions of this investment.
(c) The Securities for which the Purchaser hereby subscribes
will be acquired for the Purchaser's own account, for investment only and not
with a view toward resale or distribution in a manner which would require
registration under the Securities Act.
(d) The Purchaser acknowledges that, until the Registration
Statement is declared effective by the SEC, there are restrictions on the
transferability of shares of Common Stock as required pursuant to federal and
state securities laws. The Purchaser further agrees to be responsible for
compliance with all conditions on transfer imposed by any state blue sky or
securities law. The Purchaser acknowledges that each certificate representing
the Registrable Shares shall be stamped with a restrictive legend substantially
similar to the following:
"The securities evidenced by this certificate have not been
registered under the United States Securities Act of 1933, as
amended (the "Act"), or any state securities laws, and may
not be offered or sold, transferred, pledged, hypothecated or
otherwise disposed of except (i) pursuant to an effective
registration statement under the Act, (ii) to the extent
applicable, Rule 144 under the Act (or any similar rule under
the Act relating to the disposition of securities) or (iii)
if an exemption from registration under such Act is
available.
Notwithstanding the foregoing, the securities evidenced by
this certificate are also subject to the registration rights
set forth in that certain Subscription Agreement by and
between the original holder hereof and the Company, a copy of
which is on file at the Company's principal executive
office."
(e) The Purchaser is an "accredited investor" as defined in
Rule 501(a) under the Securities Act. The Purchaser is an organization
described in Section 50T(c)(3) of the Internal Revenue Code of 1986, as
amended, and is a corporation, Massachusetts or similar business trust or
partnership not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000. The Purchaser agrees to
furnish any additional information requested to assure compliance with
applicable federal and state securities laws in connection with the purchase
and sale of the Securities.
6. Brokers. Each of the Company and Purchaser hereby indemnifies
and holds the other harmless from any liability for any brokers' or finders' fee
with respect to this Agreement or the transactions contemplated hereby for
which the Company or the Purchaser, as the case may be, is responsible. It is
specifically acknowledged and agreed that the Company is liable for any fees
payable to Corporate Capital Management, L. L. C.
7. Waiver, Amendment. Neither this Agreement nor any provisions
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought.
8. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties
6
Page 6
hereto, their respective successors and assigns, and no other person shall have
any right or obligation hereunder. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the Purchaser without the prior written
consent of other party and any assignment in violation hereof shall be void,
provided that the Purchaser may assign its rights and obligations hereunder to
any person acquiring some or all of the Securities, provided that such transfer
(i) is made in accordance with Section 5 hereof and is not pursuant to the
effective Registration Statement and (ii) such person agrees in writing to be
bound by the terms hereof.
9. Certain Agreements. The Company covenants and agrees that during
the sixty (60) days following the Closing Date, neither the Company, nor any
affiliate of the Company, nor any person acting on behalf of the Company shall,
without the prior written consent of the Purchaser, agree to enter, enter into,
or consummate any subsequent equity securities offering (including any debt
offering convertible into equity securities of the Company) except for: (i) the
issuance of stock options pursuant to the Company's existing stock option plans
and the issuance of Common Stock pursuant to presently outstanding stock
options and convertible securities; (ii) the firmly underwritten public
offering of its equity or debt securities: and (iii) the issuance of shares of
its capital stock in consideration in whole or in part for one or more
acquisitions made by the Company. Except as set forth above, the Company
further covenants and agrees that it shall not engage in any offering,
resulting in gross proceeds to the Company of less than $1,500,000, from the
period commencing with Closing Date and terminating one hundred twenty (120)
days after the Closing Date, without first offering the Purchaser the
opportunity (which shall remain open for a period often (10) business days from
the date the Purchaser receives notice thereof) to purchase up to all of such
additional securities (in the discretion of the Purchaser) on the terms and
conditions which the Company proposes to offer such additional securities to
third parties. Any proposed sale of securities on terms and conditions
different from those offered to the Purchaser, as well as any subsequent
proposed sale of any such additional securities by the Company, shall again be
subject to the first refusal rights of the Purchaser and shall require
compliance by the Company with the procedures described in this Agreement. The
Company further covenants and agrees to provide the Purchaser with prompt
notice (in any event not later than two (2) business days after the fact) of
the date of closing and the substantive terms and provisions of any such
offering with any third party which was the subject of the right of first offer
described in this Section 9.
10. Choice of Law: Conflict of Law: Jurisdiction and Venue. Except as
otherwise expressly provided herein, the terms, conditions and enforceability
of this Agreement shall be governed by and interpreted under the laws of the
State of Illinois. Any claim, dispute or disagreement relating to the terms and
conditions of this Agreement, or arising from this Agreement or the subject
matter of this Agreement, may be brought only in the Circuit Courts of Xxxx or
DuPage Counties in the State of Illinois or in the United States District Court
for the Northern District of Illinois, which shall have exclusive jurisdiction
thereof The parties to this Agreement consent to such jurisdiction and venue
and hereby knowingly and voluntarily waive all objections thereto on the basis
of lack of personal jurisdiction, venue or convenience.
11. Section and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
12. Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original but all of
which will constitute one and the same instrument. However, in enforcing any
party's rights under this Agreement it will be necessary to produce only one
copy of this Agreement signed by the party to be charged.
13. Notice. Any notice to be given or to be served upon any party in
connection with this Agreement must be in writing and will be deemed to have
been given and received upon confirmed receipt, if sent by facsimile, or two
(2) days after it has been submitted for delivery by' Federal Express or an
equivalent carrier, charges prepaid and addressed to the following addresses
with a confirmation of delivery:
If to the Company, to:
InterAmericas Communications Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxxxx X. Northland, Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
7
Page 7
Xxxxxx Xxxxx, Esq.
Xxxxx & XxXxxxxx
Xxxxxxx Xxxxx - Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Purchaser, to:
NU Investments, LLC
Field Secretaries
c/o Bank of Xxxxxxxxxxx International Ltd.
P.O. BOX 705
Xxxxxxxxxxx House, Fort Street
Grand Cayman, Cayman Island
Attn.: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to;
Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx & Xxxxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Any parry may, at any time by giving notice to the other party, designate any
other address in substitution of an address established pursuant to the
foregoing to which such notice will be given.
15. Fees and Expenses. Each of Purchaser and the Company agrees to pay
its own expenses incident to the performance of its obligations hereunder
including, but not limited to, the fees and disbursements of such party's legal
counsel; provided, however, that the prevailing party in any action, suit or
proceeding brought before or by any court or governmental agency or body,
domestic or foreign arising out of the transactions contemplated hereby shall
be entitled to be reimbursed for its reasonable legal fees and expenses.
16. Binding Effect. The provisions of this Agreement shall be binding
upon and accrue to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns.
[SIGNATURE PAGE FOLLOWS]
8
Page 8
The undersigned acknowledges that this Agreement shall not be
effective unless and until accepted by the Company as indicated below.
Dated this 3rd day of February, 1997.
NU INVESTMENTS, LLC
By: /s/ Field Secretaries (Cayman) Ltd.
Name: Field Secretaries (Cayman) Ltd.
Title: Secretary
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 3RD DAY OF
FEBRUARY, 1997.
INTERAMERICAS COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxxx X. Northland
--------------------------------
Name: Xxxxxxxx X. Northland
--------------------------------
Title: Chairman & CEO
--------------------------------
9
Page 9
Exhibit A
THE SECURITIES REPRESENTED BY THE DEBENTURES AND THE SHARES OF COMMON STOCK OF
INTERAMERICAS COMMUNICATIONS CORPORATION TO BE ISSUED UPON ANY CONVERSION OF
THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II)
TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE
ACT RELATING TO THE DISTRIBUTION OF SECURITIES) OR (III) IF AN EXEMPTION FROM
REGISTRATION UNDER THE ACT IS AVAILABLE. THE SECURITIES EVIDENCED BY THIS
DEBENTURE ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN
SUBSCRIPTION AND PURCHASE AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE
COMPANY, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE
OFFICE.
No.____ $__________
INTERAMERICAS COMMUNICATIONS CORPORATION
7% CONVERTIBLE DEBENTURE DUE FEBRUARY 3,2000
THIS DEBENTURE is one of a duly authorized issue of Debentures of
InterAmericas Communications Corporation, a corporation duly organized and
existing under the laws of the State of Texas (the "Company"), designated as
its 7% Convertible Debentures due February 3, 2000 in an aggregate original
principal amount not exceeding One Million Five Hundred Thousand Dollars
($1,500,000) (the "Debentures")
FOR VALUE RECEIVED, the Company promises to pay to NU Investments,
LLC, registered holder hereof (the "Holder"), the principal sum of One Hundred
Fifty Thousand Dollars ($150,000) on February 3, 2000 (the "Maturity Date") and
to pay interest on the principal sum outstanding from time to time in arrears
at the rate of 7% per annum, compounded annually and payable on a semi-annual
basis commencing six months after the date hereof, computed on the basis of the
actual number of days elapsed in a 365-day year. Any accrued and unpaid
interest shall be payable in full on the Maturity Date or, if earlier, on each
Conversion Date (hereinafter defined). Accrual of interest shall commence on
the date hereof until payment in full of the principal sum has been made or
duly provided for. All accrued and unpaid interest shall bear interest at the
same rate from and after the due date of the interest payment until so paid.
The interest so payable, less any amounts required by law to be deducted or
withheld, will be paid on the Maturity Date or, if earlier, on each Conversion
Date, to the person in whose name the Debenture is registered on the records of
the Company regarding registration and transfers of the Debentures (the
"Debenture Register"); provided, however, that the Company's obligation to a
transferee of this Debenture arises only if such transfer, sale or other
disposition is made in accordance with the terms and conditions of the
Subscription Agreement executed by the original Holder in connection with the
purchase of the Debentures (the "Subscription Agreement"). The principal of;
and interest on, the Debentures is payable in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts, at the address last appearing on the Debenture
Register of the Company, as designated in writing by the Holder from time to
time. In lieu of a cash interest payment, the Holder may require the Company to
issue shares of its Common Stock, 5.001 par value per share (the "Common
Stock"), or a combination of Common Stock ~d cash as payment of the interest
then due and payable. If the Holder elects to receive all or a portion of the
interest in Common Stock, the Company shall issue to the Holder such number of
fully paid and non-assessable shares of Common Stock as shall have an aggregate
average closing bid price (as reported on the Nasdaq SmallCap Market) for the
five (5) consecutive trading days ending on the trading day prior to the date
such interest is payable, equal in amount to the interest which the Holder has
elected to receive in kind.
This Debenture is subject to the following additional provisions:
1. In the event that the Company has not registered for resale all of
the Registrable Shares pursuant to Section 3 of the Subscription Agreement on
or before June 30, 1997, the Company shall, for each day or portion thereof
that such Registrable Shares are not registered for resale, in addition to the
interest accruing at the rate of 7% per annum otherwise payable pursuant to the
terms of the Debentures, pay the Holder a premium equal to one tenth of one
percent (0.1%) of the aggregate outstanding principal amount of the Debentures,
payable weekly in arrears, commencing July 1, 1997. The premium to be paid, if
any, shall constitute liquidated damages for the Company's failure to cause the
registration of the Registrable Shares. The parties agree that the foregoing
damages are reasonable and that the
10
Page 10
anticipated damages for the failure of the Company to effect such registration
are uncertain in amount and difficult to be proved. The premium shall accrue
and be payable on a weekly basis in cash or, in lieu of a cash premium payment
the Holder may, at its option, require the Company to issue shares of its
Common Stock or a combination of Common Stock and cash as payment of the
premium then due and payable, until such time as the Holder receives
notification of the effectiveness of the Registration Statement or the
registration to be effected pursuant to Section 3.2 of the Subscription
Agreement. If the Holder elects to receive all or a portion of the premium in
Common Stock, the Company shall issue to the Holder such number of fully paid
and non-assessable shares of Common Stock as shall have an aggregate average
closing bid price (as reported on The Nasdaq SmallCap Market) for the five (5)
consecutive trading days ending on the trading day prior to the date such
premium is payable, equal in amount to the cash premium which the Company is
required to pay in kind.
2. The Debentures are issuable in denominations of Fifty Thousand
Dollars ($50,000) and integral multiples thereof This Debenture is exchangeable
for an equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder No service charge will be made for
such registration or transfer or exchange.
3. The Company shall be entitled to withhold from all payments of
interest on this Debenture any amounts required to be withheld under the
applicable provisions of the United States income tax laws or any other
applicable laws at the time of such payments.
4. This Debenture has been issued subject to certain investment
representations of the original Holder hereof (set forth in Section 5 of the
Subscription Agreement) and may be offered, sold, transferred or exchanged only
in compliance with the Securities Act. Prior to due presentment for transfer of
this Debenture, the Company and any agent of the Company may treat the person
in whose name this Debenture is duly registered on the Debenture Register as
the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.
5. Subject to the provisions of Section 7 hereof; the Holder of this
Debenture shall have the option to convert up to One Hundred percent (100%) of
the of the principal amount of the Debentures originally issued to the Holder
at any time and from time to time into shares of the Company's Common Stock, at
a conversion price for each share of Common Stock equal to the lesser of (i)
the average closing bid price (as reported by The Nasdaq SmallCap Market) of
the Company's Common Stock for the five (5) consecutive trading days ending on
the trading day immediately preceding the date of the Debentures (the "Fixed
Conversion Price") or, (ii) eighty-three percent (83%) of the average closing
bid price (as reported by The Nasdaq SmallCap Market) of the Company's Common
Stock for the five (5) consecutive trading days ending on the trading day
immediately preceding the Conversion Date (hereinafter defined) (such lesser
value being hereinafter referred to as the "Conversion Price"). Notwithstanding
the foregoing, in the event that the closing bid price (as reported by The
Nasdaq SmallCap Market) of the Company's Common Stock for ten (10) consecutive
trading days is equal to, or less than $2.25 (as adjusted for stock splits,
combinations and similar recapitalizations affecting the Common Stock), the
Company may, on one and only one occasion, suspend the Purchaser's ability to
convert any part of the outstanding Debentures for a period not to exceed
forty-five (45) days.
6. Conversion of this Debenture shall be effectuated by surrendering
the Debenture to the Company with the form of Notice of Conversion attached
hereto as Schedule 1, executed by the Holder of this Debenture evidencing such
Holder's intention to convert this Debenture or a specified portion (as
provided for above) hereof The amount of accrued but unpaid interest as of the
Conversion Date shall be subject to conversion and paid in shares of Common
Stock valued at the Conversion Price. No fractional shares of the Common Stock
or scrip representing fractional shares will be issued on conversion, but the
number of shares of Common Stock issuable shall be rounded to the nearest whole
share. The date on which Notice of Conversion is given shall be deemed to be
the date on which the Holder has delivered the Debentures, with the Notice of
Conversion duly executed, to the Company, or if earlier, the date such Notice
of Conversion is delivered to the Company provided the Debentures are received
by the Company within five (5) trading days thereafter. Such date is referred
to herein as the "Conversion Date." Facsimile delivery of the Notice of
Conversion shall be accepted by the Company. The Company shall issue and
register, within three (3) trading days after delivery to the Company of such
Notice of Conversion, if the Company has received the original Notice of
Conversion and Debenture(s) being so converted by such date, the number of
shares of Common Stock to which the Holder shall be entitled, registered in
such street or nominee name as may be directed by the Holder in the Notice of
Conversion. The Company shall ensure that the shares of Common Stock are at all
times Depository Trust Corporation eligible. In the event that the Company
fails for any reason to effect delivery of such shares of Common Stock within
such three (3) trading day period; (i) the Company shall pay the Holder a
premium equal to one percent (1%) of the aggregate principal amount of the
Debentures then outstanding and held by the Holder, payable daily, commencing
on the fourth (4th) trading day after delivery to the Company of such Notice of
Conversion or (ii) the Holder may, in its sole discretion, revoke the relevant
Notice of Conversion by delivering a
11
Page 11
notice to such effect to the Company whereupon the Company and the Holder shall
each be restored t(; their respective positions immediately prior to delivery
of such Notice of Conversion. The parties agree that the foregoing damages are
reasonable and that the anticipated damages for the failure of the Company to
effect such delivery are uncertain in amount and difficult to be proved
7. The Conversion Price and number of shares of Common Stock
issuable upon conversion shall be subject to adjustment from time to time as
provided in this Section 7.
(a) In the event the Company should at any time or from time
to time after the date of this Debenture fix a record date for the effectuation
of a split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or
other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend, distribution, split or subdivision if no record date is fixed),
the Fixed Conversion Price shall be appropriately decreased so that the number
of shares of Common Stock issuable on conversion of the Debentures shall be
increased in proportion to such increase in the aggregate number of shares of
Common Stock outstanding and those issuable with respect to such Common Stock
Equivalents.
(b) If the number of shares of Common Stock outstanding at
any time after the date of the Debentures is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the Fixed Conversion Price shall be appropriately increased so
that the number of shares of Common Stock issuable on conversion of the
Debentures shall be decreased in proportion to such decrease in outstanding
shares.
8. The Company shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the Debentures, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all of the outstanding principal amount and accrued interest
thereon; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of the
Debentures, in addition to such other remedies as shall be available to the
Holder, the Company will 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 purposes,
including, without limitation, using its best efforts to obtain the requisite
stockholder approval necessary to increase the Company's authorized Common
Stock.
9. The Company shall be entitled to prepay the entire amount of
the Debentures or any portion hereof; at any time or from time to time, upon
not less than ten (10) (nor more than twenty (20)) days' prior written notice.
The prepayment price shall equal One Hundred Seventeen Percent (117%) of the
principal amount so to be prepaid plus all accrued and unpaid interest. Such
prepayment shall be effected by written notice to the Holder, accompanied by
prepayment by wire transfer of immediately available funds to an account
designated by the Holder. Any such prepayment shall be made pro rata among the
Debentures in proportion to the original principal amount thereof
10. Any of the following shall constitute an" Event of Default"
a. The Company shall fail to make any payment (whether
principal, interest or otherwise) on the Debentures as and
when the same shall be due and payable and such default shall
continue for five (5) business days after the due date
thereof;
b. Any of the representations or warranties made by the Company
herein, in the Subscription Agreement, or in any certificate
or financial or other written statements heretofore or
hereafter furnished by or on behalf of the Company in
connection with the execution and delivery of the Debentures
or the Subscription Agreement shall be false or misleading in
any material respect as of the date made;
c. The Company shall fail to perform or observe, in any material
respect, any other material covenant, term, provision,
condition, agreement or obligation of the Company under the
Debentures or the Subscription Agreement and such failure
shall continue uncured for a period of five (5) business days
after the first date on which such failure arises (it being
understood that in the case of defaults which can not
reasonably be cured within a 5-day period no grace period
shall be necessary as a precondition to the failure to
perform such covenant constituting an Event of Default);
12
Page 12
d. The Company shall (1) make an assignment for the benefit of
its creditors or commence proceedings for its dissolution; or
(2) apply for or consent to the appointment of a trustee,
liquidator, custodian or receiver thereof; or for a
substantial part of its property or business;
e. A trustee, liquidator, custodian or receiver shall be
appointed for the Company or for a substantial part of its
property or business without its consent and shall not be
discharged within sixty (60) days after such appointment;
f. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Company and, if instituted
against the Company, shall not be dismissed within sixty (60)
days after such institution or the Company shall by any
action or answer approve of; consent to, or acquiesce in any
such proceeding or admit the material allegations of; or
default in answering a petition filed in any such proceeding;
g. The Company shall have its Common Stock delisted from The
Nasdaq SmallCap Market or suspended from trading thereon, and
shall not have its Common Stock relisted or have such
suspension lifted, as the case may be, within five (5)
business days;
h. The Company shall default on the payment of any debts in
excess of $100,000 beyond any applicable grace period;
i. Any judgments, levies or attachments shall be rendered
against the Company or any of its assets or properties in an
aggregate amount in excess of $100,000 and such judgments,
levies or attachments shall not be dismissed, stayed, bonded
or discharged within thirty (30) days of the date of entry
thereof; or
j. The Company shall be a party to any merger or consolidation
or shall dispose of all or substantially all of its assets in
one or more transactions or shall redeem more than a de
minimis amount of its outstanding shares of capital stock,
other than (i) a merger or share exchange effected solely for
the purpose of reincorporating the Company or (ii) a merger
or share exchange in which the Company is the surviving
corporation and the stockholders of the Company immediately
prior to such merger or share exchange own more than fifty
percent (50%) of the outstanding voting stock of the Company
following the merger or share exchange.
Upon the occurrence of any Event of Default or at any time thereafter, and in
each and every such case, unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of
any subsequent Event of Default) at the option of the Holder in the Holder's
sole discretion, the Holder may, upon written notice to the Company, accelerate
the maturity hereof; whereupon all principal and interest hereunder shall be
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived, anything herein or in any
note or other instruments contained to the contrary notwithstanding, and the
Holder may immediately, and without expiration of any period of grace, enforce
any and all of the Holder's rights or remedies afforded by law.
11. The Company, should an Event of Default occur, expressly
waives demand and presentment for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, notice of acceleration or intent to
accelerate, bringing of suit and diligence in taking any action to collect
amounts called for hereunder and shall be directly and primarily liable for the
payment of all sums owing and to be owing hereon, regardless of and without any
notice, diligence, act or omission as or with respect to the collection of any
amount called for hereunder.
12. (a) Anything in this Debenture to the contrary
notwithstanding, the obligation of the Company to pay the principal of and
interest in this Debenture, and to discharge all its other obligations
hereunder, shall be subordinate and junior in right of payment, to (x) all
obligations of the Company to commercial banks for borrowed money, (y) all
obligations of the Company to commercials banks under guarantees by the Company
of obligations of wholly-owned subsidiaries of the Company to commercial banks
for borrowed money, in each case, whether such obligations are outstanding at
the date of this Debenture or created or incurred after the date of this
Debenture but prior to the maturity of this Debenture and (z) all obligations
of the Company to holders of the Company's indebtedness issued in connection
with one or more underwritten public offerings by the Company (hereinafter
referred to as "Senior Indebtedness").
(b) The term "Senior Indebtedness" does not include any
indebtedness as to which the instrument
13
Page 13
creating or evidencing it provides that such indebtedness is on a parity with
or otherwise not superior in right of payment to this Debenture.
(c) No payment on account of principal or interest on this
Debenture shall be made if; at the time of such payment or immediately after
giving effect thereto, there shall exist with respect to any Senior
Indebtedness any default or any condition, event or act that, with notice or
lapse of time, or both, would constitute a default, unless waived, and if any
such payments are received by Holder, Holder shall forthwith deliver such
payment to the holders of the Senior Indebtedness, for application on account
of the Senior Indebtedness, and until so delivered, such payment shall be held
in trust by Holder as the property of the holders of the Senior Indebtedness.
(d) In the event of any insolvency proceedings, and any
receivership, liquidation or other similar proceedings in connection therewith,
relative to the Company or its property, and in the event of any proceedings
for voluntary or involuntary liquidation, dissolution or other winding-up of
the Company, whether or not involving insolvency, then the holders of Senior
Indebtedness shall be entitled to receive payment in full of all principal,
interest fees and charges, including without limitation post-petition interest,
on all Senior Indebtedness before Holder is entitled to receive any payment on
account of principal or interest upon this Debenture and no claim or proof of
claim shall be filed with the Company by or on behalf of Holder that shall
assert any right to receive any payments in respect of this Debenture, except
subject to the payment in lull of the principal and interest on all of the
Senior Indebtedness then outstanding.
(e) If funds or assets which would otherwise be available to
make payments in respect of this Note are instead paid or distributed to the
holders of Senior Indebtedness on account of the subordination provisions of
this Section 1.2, the Holder shall be subrogated to the rights of the holders
of Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to the Senior Indebtedness.
13. No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of; and interest on, this Debenture at the time, place, and rate, and
in the coin or currency, herein prescribed. This Debenture and all other
Debentures now or hereafter issued of similar terms are direct obligations of
the Company. This Debenture ranks equally with all other Debentures now or
hereafter issued under the terms set forth herein.
14. Any notice to be given or to be served upon any party in
connection with the Debentures must be in writing and will be deemed to have
been given and received upon confirmed receipt, if sent by facsimile, or two
(2) days after it has been submitted for delivery by Federal Express or an
equivalent carrier, charges prepaid and addressed to the following addresses
with a confirmation of delivery:
If to the Company, to:
InterAmericas Communications Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxxxx X. Northland, Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copy to:
Xxxxxx Xxxxx, Esq.
Xxxxx & XxXxxxxx
Xxxxxxx Xxxxx - Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Holder, to:
NU Investments, LLC
Field Secretaries
c/o Bank of Xxxxxxxxxxx International Ltd.
14
Page 14
P.O. Box 705
Butterfield House, Fort Street
Grand Cayman, Cayman Island
Attn.: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to;
Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx & Xxxxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may, at any time by giving notice to the other party, designate any
other address in substitution of an address established pursuant to the
foregoing to which such notice will be given.
15. Except as otherwise expressly provided herein, the terms,
conditions and enforceability of the Debentures shall be governed by and
interpreted under the laws of the State of Illinois. Any claim, dispute or
disagreement relating to the terms and conditions of the Debentures, or arising
from the Debentures or the subject matter of the Debentures, may be brought
only in the Circuit Courts of Xxxx or DuPage Counties in the State of Illinois
or in the United States District Court for the Northern District of Illinois,
which shall have exclusive jurisdiction thereof The parties to the Debentures
consent to such jurisdiction and venue and hereby knowingly and voluntarily
waive all objections thereto on the basis of lack of personal jurisdiction,
venue or convenience.
[SIGNATURE PAGE FOLLOWS]
15
Page 15
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
by an officer thereunto duly authorized
Dated: February 3, 1997 INTERAMERICAS COMMUNICATIONS
CORPORATION
By: /s/ Xxxxxxxx X. Northland
-------------------------------
Name: Xxxxxxxx X. Northland
Title: Chairman & CEO
16
Page 16
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert the above
Debenture No. into _________________________ shares of Common Stock of
InterAmericas Communications Corporation (the "Company") according to the
conditions hereof; as of the date written below
-------------------------------------
Date of Notice
-------------------------------------
Signature
-------------------------------------
Name
-------------------------------------
Address:
* The original Debenture and a manually signed original of this Notice
of Conversion must be received by the Company by the third business
day following the date of delivery of this Notice of Conversion by
facsimile.
17
Page 17
Exhibit B
THIS WARRANT AND THE SHARES OF COMMON STOCK OF INTERAMERICAS COMMUNICATIONS
CORPORATION TO BE ISSUED UPON ANY EXERCISE THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (I) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT (II) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISTRIBUTION OF SECURITIES) OR (III) IF AN EXEMPTION FROM REGISTRATION
UNDER THE ACT IS AVAILABLE.
WARRANT
TO PURCHASE SHARES
OF
COMMON STOCK
OF
INTERAMERICAS COMMUNICATIONS CORPORATION
FEBRUARY 3, 1997
This certifies that, for value received, NU Investments, LLC ("NUI")
and any subsequent transferee pursuant to the terms of the Agreement (as
defined below) of even date herewith and this Warrant (each a "Holder") is
entitled to purchase, subject to the provisions of this Warrant, from
InterAmericas Communications Corporations, a Texas corporation (the "Issuer"),
at any time or from time to time on or after the date hereof and on or before
February 2, 2002 (the "Expiration Date"), One Hundred Thousand (100,000) fully
paid and nonassessable shares of common stock, par value $.001 per share (the
-Common Stock"), of the Issuer at an exercise price of Five Dollars ($5.00) per
share, subject to adjustment pursuant to the terms hereunder (the "Exercise
Price") (such shares of Common Stock and other securities issued and issuable
upon exercise of this Warrant, the "Warrant Shares").
Section 1, Definitions. Except as otherwise specified herein, terms
defined herein shall have the meanings assigned to them in the Subscription
Agreement of even date herewith by and between Xxxxxxx and the Issuer (the
"Agreement")
Section 2. Exercise of Warrant
(a)Subject to the provisions hereof this Warrant may be
exercised, in whole or in part, but not as to a fractional share, at any time
or from time to time on or after the date hereof and on or before the
Expiration Date, by presentation and surrender hereof to the Issuer at the
address which, in accordance with the provisions of Section 9 hereof, is then
effective for notices to the Issuer, with the Election to Purchase Form annexed
hereto as SCHEDULE ONE, duly executed and accompanied by payment to the Issuer
as further set forth below in this Section 2 for the account of the Issuer, of
the Exercise Price for the number of Warrant Shares specified in such form. If
this Warrant should be exercised in part only, the Issuer' shall, upon
surrender of this Warrant, execute and deliver a new Warrant evidencing the
rights of the Holder hereof to purchase the balance of the Warrant Shares
purchasable hereunder. The Issuer shall maintain at its principal place of
business a register for the registration of this Warrant and registration of
transfer of this Warrant. The Exercise Price for the number of Warrant Shares
specified in the Election to Purchase Form shall be payable in United States
Dollars by certified or official bank check payable to the order of the Issuer
or by wire transfer of immediately available funds to an account specified by
the Issuer for that purpose.
(b)Certificates representing Warrant Shares shall bear the
following restrictive legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") or any state securities laws. They may not
be offered or transferred by sale, assignment, pledge or
otherwise unless (i) a registration
18
Page 18
statement for the securities under the Securities Act is in
effect or (ii) the corporation has received an opinion of
counsel, which opinion is satisfactory to the corporation, to
the effect that such registration is not required under the
Securities Act."
(c) Notwithstanding any provisions herein to the contrary, if
the Fair Market Value (hereinafter defined) of one share of Common
Stock is greater than the Exercise Price (at 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 lssuer
together with the properly endorsed Notice of Exercise and notice of
such elect ion in which event the Issuer shall issue to the Holder a
number of shares of Common Stock computed using the following formula:
Y (A-B)
-------
A
Where X the number of shares of Common Stock to be issued
to the Holder
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)
A = the Fair Market Value of one share of the Issuer's
Common Stock (at the date of such calculation)
B = Exercise Price (as adjusted at the date of such
calculation)
For purposes of the above calculation, Fair Market Value of one share of Common
Stock shall be the average closing bid price (as reported by The Nasdaq
SmallCap Market) of the Issuer's Common Stock for the five (5) consecutive
trading days ending on the trading day immediately preceding the date of the
Election to Purchase.
Section 3. Reservation of Shares.' Preservation of Rights of Holder.
The Issuer hereby agrees that there shall be reserved for issuance and/or
delivery' upon exercise of this Warrant, such number of Warrant Shares as shall
be required for issuance or delivery' upon exercise of this Warrant. The
Warrant surrendered upon exercise shall be canceled by the Issuer. After the
Expiration Date, no shares of Common Stock shall be subject to reservation in
respect of this Warrant. The Issuer further agrees (i) that it will not, by
amendment of its Articles of Incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary' act, avoid or seek to avoid the observation or performance of any of
the covenants, stipulations or conditions to be observed or performed hereunder
by the Issuer, (ii) promptly to take such action as may be required of the
Issuer to permit the Holder to exercise this Warrant and the Issuer duly and
effectively to issue shares of its Common Stock or other securities as provided
herein upon the exercise hereof and (iii) promptly to take all action required
or provided herein to protect the rights of the Holder granted hereunder
against dilution. Without limiting the generality of the foregoing, should the
Warrant Shares at any time consist in whole or in part of shares of capital
stock having a par value, the Issuer agrees that before taking any action which
would cause an adjustment of the Exercise Price so that the same would be less
than the then par value of such Warrant Shares, the Issuer shall take any
corporate action which may, in the opinion of its counsel, be necessary' in
order that the Issuer may validly and legally issue fully paid and
nonassessable shares of such Common Stock at the Exercise Price as so adjusted.
The Issuer further agrees that it will not establish a par value for its Common
Stock while this Warrant is outstanding in an amount greater than the Exercise
Price.
Section 4. Exchange, Transfer, Assignment or Loss of Warrant. Any
attempted transfer of his Warrant, the Warrant Shares or any new Warrant not in
accordance with this Section shall be null and void, and the Issuer shall not
in any way be required to give effect to such transfer. No transfer of this
Warrant shall be effective for any purpose hereunder until (i) written notice
of such transfer and of the name and address of the transferee has been
received by the Issuer, and (ii) the transferee shall first agree in a writing
deposited with the Secretary of the Issuer to be bound by all the provisions of
this Warrant and the Agreement. Upon surrender of this Warrant to the Issuer by
any transferee authorized under the provisions of this Section 4, the Issuer
shall, without charge, execute and deliver a new Warrant registered in the name
of such transferee at the address specified by such transferee, and this
Warrant shall promptly be canceled. The Issuer may deem and treat the
registered holder of any Warrant as the absolute owner thereof for all
purposes, and the
19
Page 19
Issuer shall not be affected by any notice to the contrary. Any Warrant, if
presented by an authorized transferee, may be exercised by such transferee
without prior delivery of a new Warrant issued in the name of the transferee.
Upon receipt by the Issuer of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Issuer will
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute a separate contractual obligation on
the part of the Issuer, whether or not the Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.
Section 5. Rights of Holder. Neither a Holder nor his transferee by
devise or the laws of descent and distribution or otherwise shall be, or have
any rights or privileges of a shareholder of the Issuer with respect to any
Warrant Shares, unless and until certificates representing such Warrant Shares
shall have been issued and delivered thereto.
Section 6. Adjustments in Exercise Price and Warrant Shares. The
Exercise Price and Warrant Shares shall be subject to adjustment from time to
time as provided in this Section 6.
(a) If the Issuer is recapitalized through the subdivision or
combination of its outstanding shares of Common Stock into a larger or smaller
number of shares, the number of shares of Common Stock for which this Warrant
may be exercised shall be increased or reduced, as of the record date for such
recapitalization, in the same proportion as the increase or decrease in the
outstanding shares of Common Stock, and the Exercise Price shall ~e adjusted so
that the aggregate amount payable for the purchase of all Warrant Shares
issuable hereunder immediately after the record date for such recapitalization
shall equal the aggregate amount so payable immediately before such record
date.
(b) If the Issuer declares a dividend on Common Stock, or
makes a distribution to holders of Common Stock, and such dividend or
distribution is payable or made in Common Stock or securities convertible into
or exchangeable for Common Stock, or rights to purchase Common Stock or
securities convertible into or exchangeable for Common Stock, the number of
shares of Common Stock for which this Warrant may be exercised shall be
increased, as of the record date for determining which holders of Common Stock
shall be entitled to receive such dividend or distribution, in proportion to
the increase in the number of outstanding shares (and shares of Common Stock
issuable upon conversion of all such securities convertible into Common Stock)
of Common Stock as a result of such dividend or distribution, and the Exercise
Price shall be adjusted so that the aggregate amount payable for the purchase
of all the Warrant Shares issuable hereunder immediately after the record date
for such dividend or distribution shall equal the aggregate amount so payable
immediately before such record date.
(c) If the Issuer declares a dividend on Common Stock (other
than a dividend covered by subsection (b) above) or distributes to holders of
its Common Stock, other than as part of its dissolution or liquidation or the
winding up of its affairs, any shares of its capital stock, any evidence of
indebtedness or any cash or other of its assets (other than Common Stock or
securities convertible into or exchangeable for Common Stock), the Holder shall
receive notice of such event as set forth in Section 8 below.
(d) In case of any consolidation of the Issuer with, or
merger of the Issuer into, any other corporation (other than a consolidation or
merger in which the Issuer is the surviving or resulting corporation and in
which the stockholders of the Issuer immediately prior to the merger or
consolidation hold more than 50% of the voting stock of the Issuer following
the merger or consolidation), or in case of any sale or transfer of all or
substantially all of the assets of the Issuer, or in the case of any statutory
exchange of securities with another corporation (including any exchange
effected in connection with a merger of a third corporation into the Issuer,
except where the Issuer is the surviving entity and the stockholders of the
Issuer immediately prior to the exchange hold more than 50% of the voting stock
of the Issuer after the exchange), the corporation formed by such consolidation
or the corporation resulting from such merger or the corporation which shall
have acquired such assets or securities of the Issuer, as the case may be,
shall execute and deliver to the Holder simultaneously therewith a new Warrant,
satisfactory in form and substance to the Holder, together with such other
documents as the Holder may reasonably request, entitling the Holder thereof to
receive upon exercise of such Warrant the kind and amount of shares of stock
and other securities and property receivable upon such consolidation, merger,
sale, transfer, or exchange of securities, or upon the dissolution following
such sale or other transfer, by a holder of the number of shares of Common
Stock purchasable upon exercise of this Warrant immediately prior to such
consolidation, merger, sale, transfer, or exchange. Such new Warrant shall
contain the same basic other terms and conditions as this Warrant and shall
provide for adjustments which, for events subsequent to the effective date of
such written instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 6. The above provisions of this
paragraph (d) shall similarly apply to successive consolidations, mergers,
exchanges, sales or other transfers covered hereby.
20
Page 20
(e) If the Issuer shall, at any time before the expiration of
this Warrant, sell all or substantially all of its assets and distribute the
proceeds thereof to the Issuer's shareholders, the Holder shall, upon exercise
of this Warrant have the right to receive, in lieu of the shares of Common
Stock of the Issuer that the Holder otherwise would have been entitled to
receive, the same kind and amount of assets as would have been issued,
distributed or paid to the Holder upon any such distribution with respect to
such shares of Common Stock of the Issuer had the Holder been the holder of
record of such shares of Common Stock receivable upon exercise of this Warrant
on the date for determining those entitled to receive any such distribution. If
any such distribution results in any cash distribution in excess of the
Exercise Price provided by this Warrant for the shares of Common Stock
receivable upon exercise of this Warrant, the Holder may, at the Holder's
option, exercise this Warrant without making payment of the Exercise Price and,
in such case, the Issuer shall, upon distribution to the Holder, consider the
Exercise Price to have been paid in full and, in making settlement to the
Holder, shall obtain receipt of the Exercise Price by deducting an amount equal
to the Exercise Price for the shares of Common Stock receivable upon exercise
of this Warrant from the amount payable to the Holder.
(f) If an event occurs which is similar in nature to the
events described in this Section 6, but is not expressly covered hereby, the
Board of Directors of the Issuer shall make or arrange for an equitable
adjustment to the number of Warrant Shares and the Exercise Price.
(g) The term "Common Stock" shall mean the Common Stock of
the Issuer as the same exists at the Closing Date or as such stock may be
constituted from time to time, except that for the purpose of this Section 6,
the term "Common Stock" shall include any stock of any class of the Issuer
which 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 Issuer and which is not subject to redemption by the Issuer.
(h) Whenever the number of Warrant Shares or the Exercise
Price shall be adjusted as required by the provisions of this Section 6, the
Issuer forthwith shall file in the custody of its secretary or an assistant
secretary, at its principal office, and furnish to each Holder hereof, a
certificate prepared in accordance with paragraph (h) above, showing the
adjusted number of Warrant Shares and the Exercise Price and setting forth in
reasonable detail the circumstances requiring the adjustments.
(i) Notwithstanding any other provision, this Warrant shall
be binding upon and inure to the benefit of any successors and assigns of the
Issuer.
(j) No adjustment in the Exercise Price in accordance with
the provisions of this Section 6 need be made if such adjustment would amount
to a change in such Exercise Price of less than $.01; provided however, that
the amount by which any adjustment is not made by reason of the provisions of
this paragraph (k) shall be carried forward and taken into account at the time
of any subsequent adjustment in the Exercise Price
(k) If an adjustment is made under this Section 6 and the
event to which the adjustment relates does not occur, then any adjustments in
accordance with this Section 6 shall be readjusted to the Exercise Price and
the number of Warrant Shares which would be in effect had the earlier
adjustment not been made.
Section 7. Taxes on Issue or Transfer of Common Stock and Warrant..
The Issuer shall pay any and all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares of Common Stock or
other securities on the exercise of this Warrant. The Issuer shall not be
required to pay any tax which may be payable in respect of any transfer of this
Warrant or in respect of any transfers involved in the issue or delivery of
shares or the exercise of this Warrant in a name other than that of the Holder
and the person requesting such transfer, issue or delivery shall be responsible
for the payment of any such tax (and the Issuer shall not be required to issue
or deliver said shares until such tax has been paid or provided for).
Section 8. Notice of Adjustment.. So long as this Warrant shall be
outstanding, (a) if the Issuer shall propose to pay any dividends or make any
distribution upon the Common Stock, or (b) if the Issuer shall offer generally
to the holders of Common Stock the right to subscribe to or purchase any shares
of any class of Common Stock or securities convertible into Common Stock or any
other similar rights, or (c) if there shall be any proposed capital
reorganization of the Issuer in which the Issuer is not the surviving entity,
recapitalization of the capital stock of the Issuer, consolidation or merger of
the Issuer with or into another corporation, sale, lease or other transfer of
all or substantially all of the property and assets of the Issuer, or voluntary
or involuntary dissolution, liquidation or winding up of the Issuer, or (d) if
the Issuer shall give to its stockholders any notice, report or other
communication respecting any significant or special action or event, then in
such event, the Issuer shall give to the Holder, at least ten (10) days prior
to the relevant date described below (or
21
Page 21
such shorter period as is reasonably possible if thirty days is not reasonably
possible), a notice containing a description of the proposed action or event
and stating the date or expected date on which a record of the Issuer's
stockholders is to be taken for any of the foregoing purposes, and the date or
expected date on which any such dividend, distribution, subscription,
reclassification, reorganization, consolidation, combination, merger,
conveyance, sale, lease or transfer, dissolution, liquidation or winding up is
to take place and the date or expected date, if any is to be fixed, as of which
the holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable upon such
event.
Section 9 Notice. Any notice to be given or to be served upon any
party, in connection with the Warrant must be in writing and will be deemed to
have been given and received upon confirmed receipt, if sent by facsimile, or
two (2) days after it has been submitted for delivery by Federal Express or an
equivalent carrier, charges prepaid and addressed to the following addresses
with a confirmation of delivery:
If to the Issuer, to:
InterAmericas Communications Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn.: Xxxxxxxx X. Northland, Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copy to:
Xxxxxx Xxxxx, Esq.
Xxxxx & XxXxxxxx
Xxxxxxx Xxxxx - Xxxxx 0000
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Holder, to:
NU Investments, LLC
Field Secretaries
c/o Bank of Xxxxxxxxxxx International Ltd.
P.O. Box 705
Xxxxxxxxxxx House, Fort Street
Grand Cayman, Cayman island
Attn.: Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to.
Xxxxxxx X. Xxxx, Esq.
Xxxxxxxx & Xxxxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may, at any time by giving notice to the other party,
designate any other address in substitution of an address established pursuant
to the foregoing to which such notice will be given.
Section 10. Choice of Law: Conflict of Law: Jurisdiction and Venue.
Except as otherwise expressly provided herein, the terms, conditions and
enforceability of the Warrant shall be governed by and interpreted under the
laws of the
22
Page 22
State of Illinois. Any claim, dispute or disagreement relating to the terms and
conditions of this Warrant, or arising from this Warrant or the subject matter
of this Warrant, may be brought only in the Circuit Courts of Xxxx or DuPage
Counties in the State of Illinois or in the United States District Court for
the Northern District of Illinois, which shall have exclusive jurisdiction
thereof. The parties to the Warrant consent to such jurisdiction and venue and
hereby knowingly and voluntarily waive all objections thereto on the basis of
lack of personal jurisdiction, venue or convenience.
[SIGNATURE PAGE FOLLOWS]
23
Page 23
INTERAMERICAS COMMUNICATIONS
CORPORATION
By.
Name:
Title:
ATTEST:
, Secretary
24
Page 24
SCHEDULE ONE
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise this Warrant and
to purchase _______ shares of InterAmericas Communications Corporation Common
Stock issuable upon the exercise of this Warrant, and requests that
certificates for such shares be issued in the name of:
--------------------------------------------
(Name)
--------------------------------------------
(Xxxxxxx)
--------------------------------------------
(Xxxxxx Xxxxxx Social Security or other taxpayer
identifying number, if applicable)
and, if different from above, be delivered to:
--------------------------------------------
(Name)
--------------------------------------------
(Address)
and, if the number of Warrant Shares so purchased are not all of the Warrant
Shares issuable upon exercise of this Warrant, that a Warrant to purchase the
balance of such Warrant Shares be registered in the name of, and delivered to,
the undersigned at the address stated below.
Date: _________ ___, ______,
Name of Registered Owner:
Address:
Signature:
