EXHIBIT 4.4
GALACTICOMM TECHNOLOGIES, INC.,
SECURITY CAPITAL TRADING, INC.
AND
FIRST EQUITY CORPORATION OF FLORIDA
----------------
REPRESENTATIVES' WARRANT AGREEMENT
Dated as of ______________, 1998
REPRESENTATIVES' WARRANT AGREEMENT, dated as of , 1998, between
GALACTICOMM TECHNOLOGIES, INC., a Florida corporation (the "Company"), SECURITY
CAPITAL TRADING, INC. ("Security Capital") and FIRST EQUITY CORPORATION OF
FLORIDA ("First Equity") (hereinafter collectively referred to sometimes as the
"Holders" or the "Representatives").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Representatives warrants
("Warrants") to purchase up to an aggregate of 150,000 shares of Common Stock
(as defined in Section 8.3 hereof), as more fully described in the Company's
registration statement on Form SB-2 (the "Registration Statement"), as filed
with the Securities and Exchange Commission (registration no. 333-39805) and/or
up to an aggregate of 150,000 Common Stock Purchase Warrants (the "Underlying
Warrants");
WHEREAS, the Representatives have agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of __________, 1998 among the
Representatives and the Company to act as the co-managing underwriters in
connection with the Company's proposed public offering (the "Public Offering")
of up to 1,725,000 shares ("Public Shares") of Common Stock at an initial public
offering price of $6.00 per share and up to 1,725,000 Redeemable Common Stock
Purchase Warrants ("Public Warrants") at an initial public offering price of
$.10 per Public Warrant;
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the initial Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Representatives and/or their respective
designees who are officers or partners of the Holder (or the officers or
partners of any such person) or NASD members participating in the Company's
Public Offering (or the officers or partners of any such person) (collectively,
"Designees") in consideration for, and as part of the Representatives'
compensation in connection with, the Representatives acting as the co-managing
underwriters of the Public Offering pursuant to the Underwriting Agreement.
NOW, THEREFORE, in consideration of the premises, the payment by the
Representatives to the Company of an aggregate of $75.00, the agreements herein
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. GRANT. The Holders (and/or their respective Designee(s)) are
hereby granted the right to purchase, at any time or from time to time after
__________, 1999 [the first anniversary of the closing of the Public Offering]
and before 5:00 p.m., New York time, on ___________________________________ [the
fifth anniversary of the closing of the Public Offering] (the "Exercise
Period"), up to an aggregate of 150,000 shares of Common Stock (the "Shares") at
an initial exercise price (subject to adjustment as provided in Section 8
hereof) of $9.90 [165% of the public offering price] per Share and/or up to an
aggregate of 150,000 Underlying Warrants at an initial exercise price of $.165
per Underlying Warrant [165% of the initial public offering price of a Public
Warrant], subject to the terms and conditions of this Agreement; such right to
be allocated as set forth in the
last sentence of this Section 1. The Underlying Warrants are each exercisable to
purchase one (1) Share at a price of $12.375 per share (the "Underlying Warrant
Shares"). The Holder may purchase, upon exercise of this Warrant, either the
Shares or the Underlying Warrants or both. The Common Stock issuable upon
exercise of the Warrants (and the Underlying Warrant Shares issuable upon
exercise of the Underlying Warrants is in all respects identical to the Common
Stock being sold to the public pursuant to the terms and provisions of the
Underwriting Agreement. The Underlying Warrants are in all respects identical to
the Public Warrants issued pursuant to the Warrant Agreement dated
______________, 1998 (the "Public Warrant Agreement") between the Company and
Continental Stock Transfer and Trust Co., as Warrant Agent and sold to the
public pursuant to the terms and provisions of the Underwriting Agreement,
except that (i) the Warrant Price (as defined in the Warrant Agreement) shall be
$12.375 [165% of the exercise price of a Public Warrant] per Underlying Warrant
Share and (ii) the Underlying Warrants shall not be subject to redemption by the
Company under any circumstances. Of the Warrants to purchase 150,000 Shares and
150,000 Underlying Warrants, Security Capital shall receive Warrants to purchase
______________ Shares and ___________ Underlying Warrants, and First Equity
shall receive Warrants to purchase _______________ Shares and _________________
Underlying Warrants.
Section 2. WARRANT CERTIFICATES. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreementshall be
in the form set forth as EXHIBIT A, attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other variations as
required or permitted by this Agreement.
Section 3. EXERCISE OF WARRANT.
3.1 The Warrants initially are exercisable at an initial exercise price
(subject to adjustment as provided in Section 8 hereof) of $9.90 per Share and
$.165 per Underlying Warrant purchased payable by certified or official bank
check. Upon surrender of a Warrant Certificate with the annexed Form of Election
to Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Shares and Underlying Warrants purchased at the
Company's principal offices in Florida (presently located at 0000 X.X. 00xx
Xxxxxx Xxxxx 000, Xx. Xxxxxxxxxx, XX 33314), the registered holder of a Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the Shares so purchased and/or a certificate or certificates
for the Underlying Warrants so purchased. The purchase rights represented by
each Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional Shares or fractional Underlying
Warrants). In the case of the purchase of less than all the Shares or Underlying
Warrants purchasable under any Warrant Certificate, the Company shall cancel
said Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the Shares or
Underlying Warrants purchasable thereunder.
3.2 EXERCISE BY SURRENDER OF WARRANTS. In addition to the method of
payment set forth in Section 3.1 and in lieu of any cash payment required
thereunder, the Holder(s) of the Warrants shall have the right at any time and
from time to time to exercise the Warrants in whole or in part by surrendering
the Warrant Certificates in the manner specified in Section 3.1. The number of
Shares
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to be issued pursuant to this Section 3.2 shall be equal to the difference
between (a) the number of Shares in respect of which the Warrants are exercised
and (b) a fraction, the numerator of which shall be the number of Shares in
respect of which the Warrants are exercised multiplied by the Exercise Price and
the denominator of which shall be the Market Price (hereinafter defined) of the
shares of Common Stock. The number of Underlying Warrants to be issued pursuant
to this Section 3.2 shall be equal to the difference between (a) the number of
Underlying Warrants in respect of which the Warrants are exercised and (b) a
fraction, the numerator of which shall be the number of Underlying Warrants in
respect of which the Warrants are exercised multiplied by the Exercise Price and
the denominator of which shall be the Market Price of the Underlying Warrants.
Solely for the purposes of this paragraph, Market Price shall be calculated
either (i) on the date on which the form of election attached hereto is deemed
to have been sent to the Company pursuant to Section 13 hereof ("Notice Date")
or (ii) as the average of the Market Prices for each of the five trading days
preceding the Notice Date whichever of (i) or (ii) is greater.
3.3 MARKET PRICE. As used herein, the phrase "Market Price" at any date
shall be deemed to be (i) when referring to the Common Stock, the last reported
shale price, or, in case no such reported sale takes place on such day, the
average of the last reported sale prices for the last three (3) trading days, in
either case as officially reported by the principal securities exchange on which
the Common Stock is listed or admitted to trading or by the Nasdaq SmallCap
Market ("Nasdaq SmallCap") or by the National Association of Securities Dealers
Automated Quotation System ("Nasdaq"), or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted by Nasdaq, the
average closing bid price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through Nasdaq or similar organization if Nasdaq is no
longer reporting such information, or if the Common Stock is not quoted on
Nasdaq, as determined in good faith (using customary valuation methods) by
resolution of the members of the Board of Directors of the Company, based on the
best information available to it or (ii) when referring to an Underlying
Warrant, the Market Price shall equal the difference between the Market Price of
the Common Stock and the Exercise Price of the Underlying Warrant.
Section 4. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants
and payment of the full exercise price therefor, the issuance of certificates
for shares of Common Stock and Underlying Warrants and/or other securities,
properties or rights underlying such Warrants and, upon the exercise of the
Underlying Warrants, the issuance of certificates of shares of Common Stock
and/or other securities, properties or rights underlying such Underlying
Warrants shall be made forthwith (and in any event within five (5) business days
thereafter) without charge to the Holder thereof including, without limitation,
any tax which may be payable in respect of the issuance thereof and such
certificates shall (subject to the provisions of Sections 5 and 7 thereof) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder and
the Company shall not be required to issue or deliver such certificates unless
or until the persons or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
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The Warrant Certificates and the certificates representing the Shares
and the Underlying Warrants and the shares of Common Stock underlying the
Underlying Warrants (and/or other securities, property or rights issuable upon
the exercise of the Warrants or the Redeemable Warrants) shall be executed on
behalf of the Company by the manual or facsimile signature of the then present
Chairman or Vice Chairman of the Board of Directors or President or Vice
President of the Company under its corporate seal reproduced thereon, attested
to by the manual or facsimile signature of the then present Secretary or
Assistant Secretary of the Company. Warrant Certificates shall be dated the date
of execution by the Company upon initial issuance, division, exchange,
substitution or transfer. Certificates representing Shares and Underlying
Warrants, and the shares of Common Stock underlying each Underlying Warrant
(and/or other securities, property or rights issuable upon exercise of the
Warrants) shall be dated as of the Notice Date (regardless of when executed or
delivered) and dividend bearing securities so issued shall accrue dividends from
the Notice Date.
Section 5. RESTRICTION ON TRANSFER OF WARRANTS. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof; that the Warrants may not be sold, transferred, assigned, hypothecated
or otherwise disposed of , in whole or in part, for a period of one (1) year
from the effective date of the Registration Statement, except to officers and
partners of the Representatives or to other NASD members participating in the
Public Offering (or their officers or partners).
Section 6. EXERCISE PRICE.
6.1 INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise provided
in Section 8 hereof, the initial exercise price of each Warrant shall be $9.90
per share of Common Stock and $0.165 per Underlying Warrant. The adjusted
exercise price shall be the price which shall result from time to time from any
and all adjustments of the initial exercise price in accordance with the
provisions of Section 8 hereof. Any transfer of a Warrant shall constitute an
automatic transfer and assignment of the registration rights set forth in
Section 7 hereof with respect to the Securities or other securities properties
or rights underlying the Warrants.
6.2 EXERCISE PRICE. The term "Exercise Price" as used herein shall mean
the initial exercise price or the adjusted exercise price, depending upon the
context or unless otherwise specified.
Section 7. REGISTRATION RIGHTS.
7.1 SECURITIES ACT OF 1933 LEGEND. The Shares, the Underlying Warrants
and any of the other securities issuable upon exercise of the Warrants, and the
shares of Common Stock or other securities issuable upon exercise of the
Underlying Warrants (the "Warrant Securities"; such shares of Common Stock
issuable upon exercise of the Warrants and the shares of Common Stock or other
securities issuable upon exercise of the Underlying Warrants, the "Warrant
Shares") have been registered under the Securities Act of 1933, as amended (the
"Act") pursuant to the Registration
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Statement. All of the representations and warranties of the Company contained in
the underwriting Agreement relating to the Registration Statement, the
Preliminary Prospectus and Prospectus (as such terms are defined in the
Underwriting Agreement) and made as of the dates provided therein, are
incorporated herein by reference. The Company agrees and covenants promptly to
file post-effective amendments to such Registration Statement as may be
necessary in order to maintain its effectiveness and otherwise take such action
as may be necessary to maintain the effectiveness of the Registration Statement
as long as any Warrants are outstanding. In the event that, for any reason
whatsoever the Company shall fail to maintain the effectiveness of the
Registration Statement, the certificates representing the Warrant Securities
shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE OR SECURITIES LAWS
AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY
TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
7.2 PIGGYBACK REGISTRATION. If, at any time during the period
commencing on the date hereof and ending on ________________________ [the fifth
anniversary of the date hereof], the Company proposes to register any of its
securities under the Act (other than in connection with a merger or pursuant to
Form X-0, Xxxx X-0 or a successor form) it will give written notice by delivery
in person, registered or certified mail (postage prepaid, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, at least thirty (30) days prior to the filing of each such
registration statement, to the Representatives and to all other Holders of the
Warrants and/or Warrant Securities of its intention to do so. Such notice shall
continue to be given by the Company with respect to any future registrations so
long as any Warrant Shares remain unregistered. If any of the Representatives or
other Holders of the Warrants and/or Warrant Securities notify the Company
within twenty (20) days after receipt of any such notice of its or their desire
to include any Warrant Shares in such proposed registration statement, the
Company shall afford each of the Representatives and such Holders of the
Warrants and/or Warrant Securities the opportunity to have any such Warrant
Shares registered under such registration statement; provided however, that the
Company shall not be obligated to comply with the registration request if (a)
such Warrant Shares may be publicly sold by the Holders thereof pursuant to an
effective and current registration statement that permits the method of
distribution desired by the Holders or (b) the Holders receive an opinion of
counsel to the Company that the Warrant Shares may be freely traded without
registration pursuant to Rule 144 of the Act or otherwise.
Notwithstanding the foregoing, if in the case of an underwritten
offering by the Company, the managing underwriter of such offering shall advise
the Company in writing that, in its opinion, the distribution of the Warrant
Shares requested to be included in the registration concurrently with the
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other securities being registered, when added to such other securities, would
exceed the maximum amount of the Company's securities which can be marketed
without materially and adversely affecting the entire offering, then the
offering and sale of such Warrant Shares shall be delayed for such period, not
to exceed ninety (90) days, as such managing underwriter shall request. In the
event of a delay as provided in the preceding sentence, the Company shall file
such supplements and post-effective amendments, and take any such other steps as
may be necessary, to permit the proposed offering and sale of such Warrant
Shares for a period of ninety (90) days immediately following the end of such
period of delay. The Company shall bear all fees and expenses incurred by it in
connection with the preparation and filing of such post-effective amendment or
new registration statement (other than the fees of the Holders' counsel and
other than the underwriting discounts, commissions and expenses on the sale of
the Warrant Shares).
Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
7.3 DEMAND REGISTRATION.
(a) At any time during the period commencing on the date
hereof and ending on ____________________________________, 2003 [the fifth
anniversary of the effective date of the Registration Statement], the Holders of
the Warrants and/or Warrant Securities representing a Majority of such
securities (assuming the exercise of all of the Warrants) shall have the right
(which right is in addition to the registration rights under Section 7.2
hereof), exercisable by written notice to the Company, to have the Company
prepare and file with the Securities and Exchange Commission (the "Commission"),
on one occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the Company
and counsel for the Representatives and the Holders, in order to comply with the
provisions of the Act, so as to permit a public offering and sale of their
respective Warrant Shares for six (6) consecutive months from the effective date
of such registration statement by such Holders and any other Holders of the
Warrants and/or Warrant Securities who notify the Company within twenty (20)
days after receiving notice from the Company of such request. However, the
Company shall not be obligated to comply with the registration request if (i)
such Warrant Shares may be publicly sold by the Holders thereof pursuant to an
effective and current registration statement that permits the method of
distribution desired by the Holders or (ii) the Holders receive an opinion of
counsel to the Company that the Warrant Shares may be freely traded without
registration pursuant to Rule 144 of the Act or otherwise.
(b) The Company covenants and agrees to give written notice of
any registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of the Warrants and the Warrant Securities within ten
(10) days from the date of the receipt of any such registration request.
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(c) In addition to the registration rights under Section 7.2
and subsection (a) of this Section 7.3, at any time during the period commencing
on the date hereof and ending on ______________________________ [five years
after the effective date of the Registration Statement], the Holders of a
Majority of the Warrants and/or Warrant Securities shall have the right,
exercisable by written request to the Company, to have the Company prepare and
file with the Commission, on one occasion, a registration statement so as to
permit a public offering and sale for six (6) consecutive months from the
effective date of such registration statement by such Holders of their Warrant
Shares; provided, however, that the provisions of Section 7.4(b) hereof shall
not apply to any such registration request and registration and all costs
incident thereto (including the reasonable costs of the Company's counsel with
respect to such registration) shall be at the expense of the Holder or Holders
making such request. However, the Company shall not be obligated to comply with
the registration request if (a) such Warrant Shares may be publicly sold by the
Holders thereof pursuant to an effective and current registration statement that
permits the method of distribution desired by the Holders or (b) the Holders
receive an opinion of counsel to the Company that the Warrant Shares may be
freely traded without registration pursuant to Rule 144 of the Act or otherwise.
(d) No right of the Holders under this Section 7.3 shall be
deemed to have been exercised if with respect to such right:
(A) the requisite notice given by Holders pursuant to this
Section 7.3 is withdrawn prior to the date of filing of a registration
statement or if a registration statement filed by the Company under the
Securities Act pursuant to this Section 7.3 is withdrawn prior to its
effective date, in either case, by written notice to the Company from
the Holders of fifty percent (50%) or more of the Warrants and/or
Warrant Securities to be included or which are included in such
registration statement stating that such Holders have elected not to
proceed with the offering contemplated by such registration statement
because a registration statement filed by the Company pursuant to this
Section 7.3, in the reasonable opinion of counsel for such Holders or
the managing underwriter of the proposed public offering, contains 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, in light of the circumstances under which they were made, not
misleading (other than any such statement or omission relating to such
Holders and based on information supplied or failed to be supplied by
such Holders) and the Company has not, promptly after written notice
thereof, corrected such statement or omission in an amendment filed to
such registration statement pursuant to Section 7.4(k); or
(B) a registration statement pursuant to this Section 7.3
shall have become effective under the Securities Act and (i) the
underwriters shall not purchase any Warrant Shares because of a failure
of a condition contained in the underwriting agreement due to an act of
the Company relating to the offering covered by such registration
statement or (ii) less than 85% of the Warrant Shares included therein
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shall have been sold as a result of any stop order, injunction or other
order or requirement of the Commission or other governmental agency or
court.
7.4 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. In
connection with any registration under Section 7.2 or 7.3 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a
registration statement within sixty (60) days of receipt of any demand therefor,
shall use its best efforts to have any registration statements declared
effective at the earliest possible time, and shall furnish each Holder desiring
to sell Warrant Shares such number of prospectuses as shall reasonably be
requested.
Notwithstanding the foregoing, the Company shall be entitled
to postpone, for a period of not more than ninety (90) days after receipt of a
request to effect a registration, the filing of any registration statement
otherwise required to be prepared and filed by it pursuant to Section 7.3 hereof
if, at any time, it receives a request for registration, the Board of Directors
of the Company determines in its reasonable business judgment that such
registration and offering would require the public disclosure of material
non-public information concerning any pending or ongoing material transaction or
negotiation involving the Company which would materially interfere with such
transaction or negotiation or have a materially adverse effect on the Company.
In such event the Company shall promptly give the Holders demanding registration
written notice of such determination; provided that (i) upon such postponement
by the Company, the Company shall be required to file such registration
statement as soon as practicable after the Board of Directors of the Company
shall determine, in its reasonable business judgment, that such registration and
offering will not interfere with such transaction or negotiation, (ii) the
Company may utilize this right once each year; provided, however, that the
Company shall not utilize this right more than one time unless, prior to
utilizing such right more than once each year, the Company delivers to the
Holders an opinion of counsel to the Company, reasonably satisfactory to the
Holders, to the effect that such postponement by the Company is necessary to
avoid the public disclosure of material non-public information concerning a
pending or ongoing material transaction or negotiation involving the Company,
(iii) the Holders who made such written request to effect such registration may,
at any time in writing (until 10 days after they receive written notification
from the Company that the Company intends to proceed with the filing of a
registration statement), withdraw such request for such registration and
therefore preserve the right provided in Section 7.3 hereof for such Holders to
again request such registration, and (iv) the Exercise Period shall
automatically be extended by an additional ninety (90) days.
(b) The Company shall pay all of its costs, fees and expenses
(but not underwriting or selling commissions or expenses of the Holder(s)), in
connection with all registration statements filed pursuant to Sections 7.2 and
7.3(a) hereof including, without limitation, the Company's legal and accounting
fees, printing expenses, blue sky fees and expenses. The Holder(s) will pay all
such costs, fees and expenses in connection with any registration statement
filed pursuant to Section 7.3(c). If the Company shall fail to comply with the
provisions of Section 7.4(a), the Company shall, in addition to any other
equitable or other relief available to the Holder(s), extend the Exercise Period
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by such number of days as shall equal the delay caused by the Company's failure,
and be liable for any or all damages as the Holder(s) may be entitled to as a
matter of law.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Warrant Shares included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as the Holder(s) shall reasonably designate; provided that
no such qualification will be required in any jurisdiction where, solely as a
result thereof, the Company would be subject to (i) general service of process
or to taxation or qualification as a foreign corporation doing business in such
jurisdiction or (ii) qualification requirements which would require the Company
to (A) amend its Articles of Incorporation or Bylaws or (B) rescind, modify or
amend any action taken by the Board of Directors of the Company in accordance
with their fiduciary obligations to the Company and its shareholders; provided,
however, that the Company will make a good faith effort to obtain a waiver of
any such requirement.
(d) Nothing contained in this Agreement shall be construed as
requiring a Holder to exercise its Warrants prior to the closing of an offering
pursuant to a registration statement referred to in Sections 7.2 or 7.3 hereof.
(e) In connection with any registration statement filed
pursuant to Section 7.2 hereof, the Company shall furnish and address to each
Holder participating in any underwritten offering and to each underwriter (if
different from the Company's underwriter in such offering), (i) the opinion of
counsel to the Company provided to the underwriters of the Company's
underwritten offering, dated the effective date of such registration statement
and the closing under the underwriting agreement with the Company's and/or the
Holders' underwriter, and (ii) the "cold comfort" letter provided to the
underwriters of the Company's underwritten offering, dated the effective date of
such registration statement and the closing under the underwriting agreement
with the Company's and/or the Holders' underwriter, signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities.
(f) In connection with any registration statement filed
pursuant to Section 7.3 hereof, the Company shall furnish and address to each
Holder participating in any underwritten offering and to each underwriter, a
signed counterpart, addressed to such Holder or underwriter, of (i) an opinion
of counsel to the Company, dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
an opinion dated the date of the closing under the underwriting agreement), and
(ii) a "cold comfort" letter, dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering, a
letter dated the date of the closing under the underwriting agreement), signed
by the independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such
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registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(g) The Company shall as soon as practicable after the
effective date of the registration statement, and in any event within fifteen
(15) months thereafter, make "generally available to its security holders"
(within the meaning of Rule 158 under the Act) an earnings statement (which need
not be audited) complying with Section 11(a) of the Act and covering a period of
at least twelve (12) consecutive months beginning after the effective date of
the registration statement.
(h) The Company shall deliver promptly to each Holder
participating in the offering requesting the correspondence described below, and
to the managing underwriters, copies of all correspondence between the
Commission and the Company, its counsel or auditors with respect to the
registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as any such Holder or underwriter shall reasonably request.
(i) The Company will indemnify, and, if such indemnity is
unavailable, will agree to just and equitable contribution to, the Holders of
Warrant Shares which are included in each registration statement referred to in
Sections 7.2 and 7.3 hereof, and the underwriters of such Warrant Shares,
substantially to the same extent as the Company has indemnified, and agreed to
just and equitable contribution to, the Underwriters of its public offering of
Common Stock pursuant to the Underwriting Agreement. Each selling Holder of
Warrant Shares, severally and not jointly, will indemnify and hold harmless the
Company, its directors, its officers who shall have signed any such registration
statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act to the same extent as the foregoing indemnity from the
Company, but in each case to the extent, and only to the extent, that any
statement in or omission from or alleged omission from such registration
statement, any final prospectus, or any amendment or supplement thereto was made
in reliance upon information furnished in writing to the Company by such selling
Holder specifically for use in connection with the preparation of such
registration statement, any final prospectus or any such amendment or supplement
thereto; PROVIDED, HOWEVER, that the obligation of any Holder of Warrant Shares
to indemnify the Company under the provisions of this paragraph (i) shall be
limited to the product of the number of Warrant Shares being sold by the selling
Holder and the market price of the Common Stock on the date of the sale to the
public of these Warrant Shares.
(j) For purposes of this Agreement, the term "Majority," in
reference to the Holders of Warrants or Warrant Shares, shall mean in excess of
fifty percent (50%) of the then
10
outstanding Warrants or Warrant Shares that (i) are not held by the Company, an
officer, creditor, employee or agent thereof or any of their respective
affiliates, members of their family, persons acting as nominees or in
conjunction therewith or (ii) have not been resold to the public pursuant to a
registration statement filed with the Commission under the Act.
(k) The Company shall promptly notify each Holder of Warrants
and/or Warrant Shares covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the Act, upon the
Company's discovery that, or upon 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 any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and at the request of any such Holder promptly prepare and furnish
to such Holder and each underwriter, if any, 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 securities, such prospectus shall
not include an untrue statement of a material fact or omit 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 under which they were made.
(l) The Company shall enter into an underwriting agreement
with the managing underwriters of an underwritten offering covered by Section
7.2 or 7.3 hereof. Such agreement shall be reasonably satisfactory in form and
substance to the Company, each Holder and such managing underwriters, and shall
contain such representations, warranties and covenants by the Company and such
other terms as are customarily contained in agreements of that type used by the
managing underwriter. The Holders shall be parties to any underwriting agreement
relating to an underwritten sale of their Warrant Shares and may, at their
option, require that any or all the representations, warranties and covenants of
the Company to or for the benefit of such underwriters shall also be made to and
for the benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution.
(m) The Company shall not permit the inclusion of any
securities other than the Registrable Securities to be included in any
registration statement filed pursuant to Section 7.3 hereof, or permit any other
registration statement to be or remain effective during the effectiveness of a
registration statement filed pursuant to Section 7.3 hereof, without the prior
written consent of the holders of the Warrants and Warrant Shares representing a
Majority of such securities.
Section 8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES.
8.1 DIVIDENDS AND DISTRIBUTIONS. In case the Company shall at any time
after the date hereof pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock, then upon such dividend or distribution,
the Exercise Price in effect immediately prior to such dividend or distribution
shall be reduced to a price determined by dividing an amount equal to the total
number of shares of Common Stock outstanding immediately prior to such dividend
or
11
distribution multiplied by the Exercise Price in effect immediately prior to
such dividend or distribution, by the total number of shares of Common Stock
outstanding immediately after such issuance or sale. For purposes of any
computation to be made in accordance with the provisions of this Section 8, the
shares of Common Stock issuable by way of dividend or distribution shall be
deemed to have been issued immediately after the opening of business on the date
following the date fixed for determination of shareholders entitled to receive
such dividend or distribution.
8.2 SUBDIVISION AND COMBINATION. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
8.3 ADJUSTMENT IN NUMBER OF WARRANT SECURITIES. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 8, the number of
Warrant Securities issuable upon the exercise at the adjusted exercise price of
each Warrant shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Securities issuable upon exercise of the
Warrants immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
8.4 RECLASSIFICATION. CONSOLIDATION. MERGER. ETC. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in nominal value to no nominal value, or from no nominal value to
nominal value, or as a result of a subdivision or combination), or in the case
of any consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding Common Stock, except a change as a result of a
subdivision or combination of such shares or a change in nominal value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holders shall thereafter have the
right to receive, upon exercise of such Warrant, the kind and number of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of securities of the Company for which such Warrant might have
been exercised immediately prior to any such events.
8.5 DETERMINATION OF OUTSTANDING COMMON STOCK. The number of shares of
Common Stock at any one time outstanding shall include the aggregate number of
shares issued or issuable upon the exercise of outstanding options, rights and
warrants and upon the conversion or exchange of outstanding convertible or
exchangeable securities. For the purpose of this Agreement, the term "Common
Stock" shall mean (i) the class of stock designated as Common Stock in the
Articles of Incorporation of the Company as may be amended as of the date
hereof, or (ii) any other class of stock resulting from successive changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par vale to no par value, or from no par value to par value.
8.6 NOTICE OF ADJUSTMENT EVENTS. Whenever (a) the Company determines or
(b) it is probable, (whichever of the foregoing shall be the first to occur),
that an event which would give rise
12
to adjustments under this Section 8 is likely to occur, the Company shall mail
to each Holder, at least twenty (20) days prior to the record date with respect
to such event or, if no record date shall be established, at least twenty (20)
days prior to such event, a notice specifying (i) the nature of the contemplated
event, (ii) the date of which any such record is to be taken for the purpose of
such event, (iii) the date on which such event is expected to become effective
and (iv) the time, if any is to be fixed, when the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable in connection with such event.
8.7 NOTICE OF ADJUSTMENTS. Whenever the Exercise Price or the kind of
securities or property issuable upon exercise of the Warrants, or both, shall be
adjusted pursuant to this Section 8, the Company shall make a certificate signed
by its President or a Vice President and by its Chief Financial Officer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method of which such
adjustment was calculated (including a description of the basis on which the
Company made any determination hereunder), and the Exercise Price and the kind
of securities or property issuable upon exercise of the Warrants after giving
effect to such adjustment, and shall cause copies of such certificate to be
mailed (by first class mail postage prepaid) to each Holder promptly after each
adjustment.
8.8 PRESERVATION OF RIGHTS. The Company will not, by amendment of its
Articles of Incorporation or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Agreement or the Warrants or the rights represented thereby,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holders of the Warrants against dilution or other
impairment.
8.9 WHEN NO ADJUSTMENT REQUIRED. No adjustment in the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least $0.05 per Warrant Security; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 8.9 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment; PROVIDED FURTHER,
HOWEVER, that adjustments shall be required and made in accordance with the
provisions of this Section 8 (other than this Section 8.9) not later than such
time as may be required in order to preserve the tax-free nature of a
distribution to the Holders of the Warrants. All calculations under this Section
8 shall be made to the nearest cent or to the nearest 1/l00th of a share, as the
case may be. Anything in this Section 8 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those required by this Section 8, as it in its discretion shall deem
to be advisable in order that any stock dividend, subdivision of shares or
distribution of rights to purchase stock or securities convertible or
exchangeable for stock hereafter made by the Company to its shareholders shall
not be taxable.
Section 9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each
Warrant Certificate is exchangeable without expense, upon the surrender thereof
by the registered Holder at the principal executive office of the Company, for a
new Warrant Certificate of like tenor and date representing
13
in the aggregate the right to purchase the same number of Warrant Securities in
such denominations as shall be designated by the Holder thereof at the time of
such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
Section 10. ELIMINATION OF FRACTIONAL INTERESTS. The Company shall not
be required to issue certificates representing fractions of shares of Common
Stock or Underlying Warrants upon the exercise of the Warrants, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.
Section 11. RESERVATION AND LISTING OF SECURITIES. The Company shall at
all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the Warrants and
the underlying Warrants, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the Warrants and/or the
Underlying Warrants and payment of the Exercise Price therefor, all shares of
Common Stock and other securities issuable upon such exercise shall be duly and
validly issued, fully paid, nonassessable and not subject to the preemptive
rights of any shareholder. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all shares of Common Stock issuable
upon the exercise of the Warrants and the Underlying Warrants and all Underlying
Warrants to be listed on all securities exchanges and/or included in the
automated quotation system of the Nasdaq Stock Market (subject to official
notice of issuance) with respect to which the Common Stock issued to the public
in connection herewith may then be so listed and/or quoted.
Section 12. NOTICES TO WARRANT HOLDERS. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the right to vote or
to consent or, except as otherwise set forth herein, to receive notice as a
shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company.
Section 13. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made at the time delivered by hand if personally delivered; five
calendar days after mailing if sent by registered or certified mail; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee):
14
(a) If to the registered Holder of the Warrants, to the
address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to the
Holders.
Section 14. UNDERLYING WARRANTS. the form of the certificate
representing the Underlying Warrants (and the form of election to purchase
shares of Common Stock upon the exercise of Underlying Warrants and the form of
assignment printed on the reverse thereof) shall be substantially as set forth
in Exhibit "A" to the Public Warrant Agreement. Each Underlying Warrant issuable
upon exercise of the Warrants shall evidence the right to initially purchase a
fully paid and non-assessable share of Common Stock at an initial purchase price
of $12.375 per share from __________________, 1999 until 5:00 p.m. New York time
on ________________________, 2003 at which time the Underlying Warrants, unless
the exercise period has been extended, shall expire. The exercise price of the
Underlying Warrants and the number of shares of Common Stock issuable upon the
exercise of the Underlying Warrants are subject to adjustment, whether or not
the Warrants have been exercised and the Underlying Warrants have been issued,
in the manner and upon the occurrence of the events set forth in Section _____of
the Public Warrant Agreement, which is hereby incorporated by reference and made
a part hereof as if set forth in its entirety herein. Subject to the provisions
of this Agreement and upon issuance of the Underlying Warrants, each registered
holder of such Underlying Warrant shall have the right to purchase from the
Company (and the Company shall issue to such registered holders) up to the
number of fully paid and non-assessable shares of Common Stock (subject to
adjustment as provided herein and in the Public Warrant Agreement), free and
clear of all preemptive rights of stockholders, provided that such registered
holder complies with the terms governing exercise of the Underlying Warrant set
forth in the Public Warrant Agreement, and pays the applicable exercise price,
determined in accordance with the terms of the Public Warrant Agreement. Upon
exercise of the Underlying Warrants, the Company shall forthwith issue to the
registered holder of any such Underlying Warrant in his name or in such name as
may be directed by him, certificates for the number of shares of Common Stock so
purchased. Except as otherwise provided in this Agreement, the Underlying
Warrants shall be governed in all respects by the terms of the Public Warrant
Agreement. The Underlying Warrants shall be transferable in the manner provided
in the Public Warrant Agreement, and upon any such transfer, a new Underlying
Warrant certificate shall be issued promptly to the transferee. the Company
covenants to, and agrees with, the Holder(s) that without the prior written
consent of the Holder(s), which will not be unreasonably withheld, the Pubic
Warrant Agreement will not be modified, amended, canceled, altered or
superseded, and that the Company will send to each Holder, irrespective of
whether or not the Warrants have been exercised, any and all notices required by
the Public Warrant Agreement to be sent to holders of Public Warrants.
Section 15. SUPPLEMENTS AND AMENDMENTS. The Company and the
Representatives may from time to time supplement or amend this Agreement without
the approval of any holders of Warrant Certificates (other than the
Representatives) in order to cure any ambiguity, to correct or
15
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Representatives may
deem necessary or desirable and which the Company and the Representatives deem
shall not adversely affect the interests of the Holders of Warrant Certificates.
Section 16. SUCCESSORS. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
Section 17. GOVERNING LAW: SUBMISSION TO JURISDICTION. This Agreement
shall be deemed to have been made and delivered in the State of Florida and
shall be governed as to validity, interpretation, construction; effect and in
all other respects with the substantive laws of the State of Florida, without
giving effect to the choice of laws rules thereof. The Company and each of the
Holders (a) agrees that any legal suit, action or proceeding arising out of or
relating to this Agreement and the Warrants issued hereunder shall be instituted
exclusively in the state courts of Broward or Dade Counties, Florida ("Florida
Courts") or in the United States District Court for the Southern District of
Florida, (b) waives any objection which the Company or such Holder may have now
or hereafter based upon forum non conveniens or to the venue of any such suit,
action or proceeding, and (c) irrevocably consents to the jurisdiction of the
Florida Courts and-the United States District Court for the Southern District of
Florida in any such suit, action or proceeding. The Company and each of the
Holders each further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the
Florida Courts or in the United States District Court for the Southern District
of Florida and agrees that service of process upon the Company or any Holder
mailed by certified mail to their respective addresses shall be deemed in every
respect effective service of process upon the Company or such Holder, as the
case may be, in any suit, action or proceeding. FURTHER, BOTH THE COMPANY AND
EACH OF THE HOLDERS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION TO ENFORCE THE
TERMS OF THIS AGREEMENT AND THE WARRANT CERTIFICATE AND IN CONNECTION WITH ANY
DEFENSE, COUNTERCLAIM OR CROSSCLAIM ASSERTED IN ANY SUCH ACTION.
The Company, the Representatives and the Holders agree that the
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
Section 18. ENTIRE AGREEMENT: MODIFICATION. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof and may not be modified or amended except by a writing duly signed
by the party against whom enforcement of the modification or amendment is
sought.
16
Section 19. SEVERABILITY. If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Agreement.
Section 20. CAPTIONS. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended to be, nor
should they be construed as, part of this Agreement and shall be given no
substantive effect.
Section 21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give any person or corporation other than the Company and the
Representatives and any other registered Holder(s) of the Warrant Certificates
or Warrant Securities any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive benefit of the
Company, the Representatives and any other registered Holder(s) of the Warrant
Certificates or Warrant Securities. The Representatives shall have the right to
designate Designees to receive all or any portion of the Warrants.
Section 22. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
GALACTICOMM TECHNOLOGIES, INC.
By:
-----------------------------------------
Xxxxx Xxxx, Chief Executive Officer
SECURITY CAPITAL TRADING, INC.
By:
-----------------------------------------
Name:
Title:
FIRST EQUITY CORPORATION
OF FLORIDA
By:
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx, Senior Vice President
17
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE SECURITIES REPRESENTED HEREBY AND THE OTHER SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE OR SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL FOR THE
HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR
THIS CORPORATION, IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT
REFERRED TO HEREIN.
EXERCISABLE ON OR COMMENCING _________________, 1999
UNTIL 5:00 P.M., NEW YORK TIME,_________________, 2003
No. RW- Warrants to Purchase
_______ shares of Common Stock
and/or ______ Common Stock
Purchase Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ____________, or registered
assigns, is the registered holder of ____________ Warrants to purchase
initially, at any time from , 1999 until 5:00 p.m., New York time, on , 2003
("Expiration Date"), up to _________ fully paid and nonassessable shares of
common stock, $.0001 par value ("Common Stock") of GALACTICOMM TECHNOLOGIES,
INC., a Florida corporation (the "Company"), and Common Stock Purchase Warrants
of the Company (one Common Stock Purchase Warrant entitling the owner to
purchase one fully-paid and non-assessable share of Common Stock) at the initial
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $9.90 per share of Common Stock and $0.165 per Common Stock Purchase Warrant
upon surrender of this Warrant Certificate and payment of the Exercise Price at
an office or agency of the Company, but subject to the conditions set forth
herein and in the Warrant Agreement, dated as of _______, 1998, among the
Company, Security Capital Trading, Inc. and First Equity Corporation of Florida
(the
18
"Warrant Agreement"). Payment of the Exercise Price shall be made by certified
or official bank check payable to the order of the Company.
No Warrant may be exercised after 5:00 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; PROVIDED,
HOWEVER, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair the rights of the holder
as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.
19
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of ________, 1998
GALACTICOMM TECHNOLOGIES, INC.
By:
----------------------------------------
Xxxxx Xxxx, Chief Executive Officer
20
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
______ shares of Common Stock ;
______ Common Stock Purchase Warrants;
______ shares of Common Stock together with an equal number of Common Stock
Purchase Warrants; or
______ shares of Common Stock together with
______ Common Stock Purchase Warrants.
and herewith tenders in payment for such securities a certified or official bank
check payable to the order of Galacticomm Technologies, Inc. in the amount of
$_________, all in accordance with the terms of the Warrant Agreement dated as
of , 1998, by and between Galacticomm Technologies, Inc. and Security Capital
Trading, Inc., and Firs Equity Corporation of Florida. The undersigned requests
that a certificate for such securities be registered in the name of whose
address is and that such Certificate be delivered to ___________________ whose
address is ____________________________________________.
Dated:_________________, 199__
Signature___________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
____________________________________________
(Insert Social Security or Other Identifying
Number of Holder)
____________________________________________
Signature Guarantee
21
[FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.2]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
______ shares of Common Stock ;
______ Common Stock Purchase Warrants;
______ shares of Common Stock together with an equal number of Common Stock
Purchase Warrants; or
______ shares of Common Stock together with ______ Common Stock Purchase
Warrants.
and herewith tenders in payment for such securities Warrants all in accordance
with the terms of Section 3.2 of the Warrant Agreement dated as of , 1998, by
and between Galacticomm Technologies, Inc. and Security Capital Trading, Inc.,
and Firs Equity Corporation of Florida. The undersigned requests that a
certificate for such securities be registered in the name of whose address is
and that such Certificate be delivered to ___________________ whose address is
____________________________________________.
Dated:___________________, 199__
Signature___________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
____________________________________________
(Insert Social Security or Other Identifying
Number of Holder)
____________________________________________
Signature Guarantee
22
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto
________________________________________________
________________________________________________
________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Attorney,
to transfer the within Warrant Certificate on the books of the within
named Company, with full power of substitution.
Dated:___________________________, 199__
Signature:__________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
____________________________________________
(Insert Social Security or Other Identifying
Number of Assignee)
____________________________________________
Signature Guarantee
23
