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EXHIBIT 10.1
WARRANT AGREEMENT
July _____, 1999
Xxxx Xxxxxxx
Commercial Telecom Systems, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
LORECOM Technologies, Inc. (the "Company"), agrees to issue and sell to
you warrants (the "Warrants") to purchase the number of shares of common stock,
$.01 par value per share (the "Common Stock"), of the Company set forth herein,
subject to the terms and conditions contained herein.
1. ISSUANCE OF WARRANTS; EXERCISE PRICE. The Warrants, which shall be
in the form attached hereto as Exhibit A, shall be issued to you concurrently
with the execution hereof in consideration of the payment by you to the Company
of the sum of $0.001 cash per share of Common Stock subject to the Warrants, the
receipt and sufficiency of which are hereby acknowledged. The Warrant shall
provide that you, or such other holder or holders of the Warrants to whom
transfer is authorized in accordance with the terms of this Agreement, shall
have the right to purchase an aggregate of 10,000 shares of Common Stock for an
exercise price equal to [the offering price in the IPO] per share (the "Exercise
Price") or [total exercise price] in the aggregate. The number, character and
Exercise Price of such shares of Common Stock are subject to adjustment as
hereinafter provided, and the term "Common Stock" shall mean, unless the context
otherwise requires, the stock and other securities and property receivable upon
exercise of the Warrants. The term "Exercise Price" shall mean, unless the
context otherwise requires, the price per share of the Common Stock purchasable
under the Warrants as set forth in this Section 1, as adjusted from time to time
pursuant to Section 6.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to you and to each subsequent holder of Warrants and agrees that:
(a) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company enforceable in accordance with its terms; and neither the issuance of
the Warrants nor the issuance of the shares of Common Stock issuable upon
exercise of the Warrants will result in a breach or violation of any terms or
provisions of, or constitute a default under, any contract, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound, the Certificate of
Incorporation or Bylaws of the Company, or any law, order, rule, regulation or
decree of any government, governmental instrumentality or court, domestic or
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foreign, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company.
(b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the sale and issuance of the
Warrants or the sale and issuance of the shares of Common Stock issuable upon
exercise of the Warrants, except such as have been obtained or may be required
under the Securities Act of 1933, as amended (the "Act"), and such as may be
required under state securities or blue sky laws in connection with the issuance
of the Warrants and the shares of Common Stock issuable upon exercise of the
Warrants. Upon exercise of the Warrants by the holder thereof, the shares of
Common Stock with respect to which the Warrants are exercised will be validly
issued, fully paid, and non-assessable, and good and marketable title to such
shares of Common Stock shall be delivered to such holder free and clear of all
liens, encumbrances, equities, claims or preemptive or similar rights.
(c) During the term of this Agreement, the Company shall make
timely filings of all periodic and other reports and forms and other materials
required (but only to the extent required) to be filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Act or the Securities
Exchange Act of 1934, as amended, and with any national securities exchange or
quotation system upon which any of the securities of the Company may be listed.
3. NOTICES OF RECORD DATE; ETC. In the event of (i) any taking by the
Company of a record date with respect to the holders of any class of securities
of the Company for purposes of determining which of such holders are entitled to
dividends or other distributions (other than regular quarterly dividends), or
any right to subscribe for, purchase or otherwise acquire shares of stock of any
class or any other securities or property, or to receive any other right, (ii)
any capital reorganization of the Company, or reclassification or
recapitalization of capital stock of the Company or any transfer in one or more
related transactions of all or a majority of the assets or revenue or income
generating capacity of the Company to, or consolidation or merger of the Company
with or into, any other entity or person, or (iii) any voluntary or involuntary
dissolution or winding up of the Company, then and in each such event the
Company will mail or cause to be mailed to each holder of a Warrant at the time
outstanding a notice specifying, as the case may be, (A) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right; or (B) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, conveyance, dissolution,
liquidation or winding-up is to take place and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or any other class of stock
or securities of the Company, or another issuer pursuant to Section 6,
receivable upon the exercise of the Warrants) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such event. Any such notice shall be
deposited in the United States mail, postage prepaid, at least ten (10) days
prior to the date therein specified, and the holders(s) of the Warrant(s) may
exercise the Warrant(s) and participate in such event as a registered holder of
Common Stock, upon exercise of the Warrant(s) so held, within the ten (10) day
period from the date of mailing of such notice.
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4. NO IMPAIRMENT. The Company shall not, by amendment of its
organizational documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this Agreement or of the Warrants, but will at all times in good faith take
any and all action as may be necessary in order to protect the rights of the
holders of the Warrants against impairment. Without limiting the generality of
the foregoing, the Company (a) will at all times reserve and keep available,
solely for issuance and delivery upon exercise of the Warrants, shares of Common
Stock issuable from time to time upon exercise of the Warrants, (b) will not
increase the par value of any shares of stock receivable upon exercise of the
Warrants above the amount payable in respect thereof upon such exercise, and (c)
will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable stock upon
the exercise of the Warrants, or any of them.
5. EXERCISE OF WARRANTS. At any time and from time to time on and after
the first anniversary of the date hereof and expiring on the fifth anniversary
of the effective date of the public offering of the Common Stock at 5:00 p.m.,
Oklahoma City, Oklahoma time, except as otherwise necessary to exercise your
registration rights under Section 7, Warrants may be exercised as to all or any
portion of the whole number of shares of Common Stock covered by the Warrants by
the holder thereof by surrender of the Warrants, accompanied by a subscription
for shares to be purchased in the form attached hereto as Exhibit B and by a
check payable to the order of the Company in the amount required for purchase of
the shares as to which the Warrant is being exercised, delivered to the Company
at its principal office at 00000 X. Xxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000,
Attention: President. Warrants may also be exercised from time to time, without
any payment required for the purchase of the shares as to which the Warrant is
being exercised, as to all or any portion of the number of shares of Common
Stock covered by the Warrant(s) by the holder thereof by surrender of the
Warrants, accompanied by a subscription for shares in the form attached as
Exhibit C, pursuant to which the holder thereof will be entitled to receive upon
such surrender of the Warrant(s) (and without any further payment) that number
of shares of Common Stock equal to the product of the number of shares of Common
Stock obtainable upon exercise of the Warrant(s) (or the portion thereof as to
which the exercise relates) multiplied by a fraction: (i) the numerator of which
shall be the difference between the then Current Value (as defined in this
Section 5 and Section 7(d)) of one full share of Common Stock on the date of
exercise and the Exercise Price, and (ii) the denominator of which shall be the
Current Value of one full share of Common Stock on the date of exercise. Upon
the exercise of a Warrant in whole or in part, the Company will within five (5)
days thereafter, at its expense (including the payment by the Company of any
applicable issue or transfer taxes), cause to be issued in the name of and
delivered to the Warrant holder a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock to which such holder is
entitled upon exercise of the Warrant. In the event such holder is entitled to a
fractional share, in lieu thereof such holder shall be paid a cash amount equal
to such fraction, multiplied by the Current Value of one full shares of Common
Stock on the date of exercise. Certificates for shares of Common Stock issuable
by reason of the exercise of the Warrant or Warrants shall be dated and shall be
effective as of the date of the surrendering of the Warrant for exercise,
notwithstanding any delays in the actual execution, issuance or delivery of the
certificates
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for the shares so purchased. In the event a Warrant or Warrants is exercised as
to less than the aggregate amount of all shares of Common Stock issuable upon
exercise of all Warrants held by such person, the Company shall issue a new
Warrant to the holder of the Warrant so exercised covering the aggregate number
of shares of Common Stock as to which Warrants remain unexercised.
For purposes of this section, Current Value is defined (i) in the case
for which a public market exists for the Common Stock at the time of such
exercise, according to Section 7(d), and (ii) in the case no public market
exists at the time of such exercise, at the Appraised Value. For the purposes of
this Agreement, "Appraised Value" is the value determined in accordance with the
following procedures. For a period of five (5) days after the date of an event
(a "Valuation Event") requiring determination of Current Value at a time when no
public market exists for the Common Stock (the "Negotiation Period"), each party
to this Agreement agrees to negotiate in good faith to reach agreement upon the
Appraised Value of the securities or property at issue, as of the date of the
Valuation Event, which will be the fair market value of such securities or
property, without premium for control or discount for minority interests,
illiquidity or restrictions on transfer. In the event that the parties are
unable to agree upon the Appraised Value of such securities or other property by
the end of the Negotiation Period, then the Appraised Value of such securities
or property will be determined for purposes of this Agreement by a recognized
appraisal or investment banking firm mutually agreeable to the holders of the
Warrants and the Company (the "Appraiser"). If the holders of the Warrants and
the Company cannot agree on an Appraiser within two (2) business days after the
end of the Negotiation Period, the Company, on the one hand, and the holders of
the Warrants, on the other hand, will each select an Appraiser within ten (10)
business days after the end of the Negotiation Period and those two Appraisers
will select ten (10) days after the end of the Negotiation Period an independent
Appraiser to determine the fair market value of such securities or property,
without premium for control or discount for minority interests. Such independent
Appraiser will be directed to determine fair market value of such securities or
property as soon as practicable, but in no event later than thirty (30) days
from the date of its selection. The determination by an Appraiser of the fair
market value will be conclusive and binding on all parties to this Agreement.
Appraised Value of each share of Common Stock at a time when (i) the Company is
not a reporting company under the Exchange Act and (ii) the Common Stock is not
traded in the organized securities markets, will, in all cases, be calculated by
determining the Appraised Value of the entire Company taken as a whole and
dividing that value by the number of shares of Common Stock then outstanding,
without premium for control or discount for minority interests, illiquidity or
restrictions on transfer. The costs of the Appraiser will be borne by the
Company. In no event will the Appraised Value of the Common Stock be less than
the per share consideration received or receivable with respect to the Common
Stock or securities or property of the same class in connection with a pending
transaction involving a sale, merger, recapitalization, reorganization,
consolidation, or share exchange, dissolution of the Company, sale or transfer
of all or a majority of its assets or revenue or income generating capacity, or
similar transaction.
6. PROTECTION AGAINST DILUTION. The Exercise Price for the shares of
Common Stock and number of shares of Common Stock issuable upon exercise of the
Warrants is subject to adjustment from time to time as follows:
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(a) STOCK DIVIDENDS, SUBDIVISIONS, RECLASSIFICATIONS, ETC. In
case at any time or from time to time after the date of execution of this
Agreement, the Company shall (i) take a record of the holders of Common Stock
for the purpose of entitling them to receive a dividend or a distribution on
shares of Common Stock payable in shares of Common Stock or other class of
securities, (ii) subdivide or reclassify its outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify its outstanding
Common Stock into a smaller number of shares, then, and in each such case, the
Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be adjusted in such a manner that the Exercise Price for
the shares issuable upon exercise of the Warrants immediately after such event
shall bear the same ratio to the Exercise Price in effect immediately prior to
any such event as the total number of shares of Common Stock outstanding
immediately prior to such event shall bear to the total number of shares of
Common Stock outstanding immediately after such event.
(b) ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. When any
adjustment is required to be made in the exercise Price under this Section 6,
(i) the number of shares of Common Stock issuable upon exercise of the Warrants
shall be changed (upward to the nearest full share) to the number of shares
determined by dividing (x) an amount equal to the number of shares issuable
pursuant to the exercise of the Warrants immediately prior to the adjustment,
multiplied by the Exercise Price in effect immediately prior to the adjustment,
by (y) the Exercise Price in effect immediately after such adjustment, and (ii)
upon exercise of the Warrant, the holder will be entitled to receive the number
of shares or other securities referred to in Section 6(a) that such holder would
have received had the Warrant been exercised prior to the events referred to in
Section 6(a).
(c) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case of any reorganization or consolidation of the Company with, or any
merger of the Company with or into, another entity (other than a consolidation
or merger in which the Company is the surviving corporation) or in case of any
sale or transfer to another entity of the majority of assets of the Company, the
entity resulting from such reorganization or consolidation or surviving such
merger or to which such sale or transfer shall be made, as the case may be,
shall make suitable provision (which shall be fair and equitable to the holders
of Warrants) and shall assume the obligations of the Company hereunder (by
written instrument executed and mailed to each holder of the Warrants then
outstanding) pursuant to which, upon exercise of the Warrants, at any time after
the consummation of such reorganization, consolidation, merger or conveyance,
the holder shall be entitled to receive the stock or other securities or
property that such holder would have been entitled to upon consummation if such
holder had exercised the Warrants immediately prior thereto, all subject to
further adjustment as provided in this Section 6.
(d) CERTIFICATE AS TO ADJUSTMENTS. In the event of adjustment
as herein provided in paragraphs of this Section 6, the Company shall promptly
mail to each Warrant holder a certificate setting forth the Exercise Price and
number of shares of Common Stock issuable upon exercise after such adjustment
and setting forth a brief statement of facts requiring such
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adjustment. Such certificate shall also set forth a brief statement of facts
requiring such adjustment. Such certificate shall also set forth the kind and
amount of stock or other securities or property into which the Warrants shall be
exercisable after any adjustment of the Exercise Price as provided in this
Agreement.
(e) MINIMUM ADJUSTMENT. Notwithstanding the foregoing, no
certificate as to adjustment of the Exercise Price hereunder shall be made if
such adjustment results in a change in the Exercise Price then in effect of less
than ten cents ($0.10) and any adjustment of less than ten cents ($0.10) of any
Exercise Price shall be carried forward and shall be made at the time of and
together with any subsequent adjustment that, together with the adjustment or
adjustments so carried forward, amounts to ten cents ($0.10) or more; provided
however, that upon the exercise of a Warrant, the Company shall have made all
necessary adjustments (to the nearest cent) not theretofore made to the Exercise
Price up to and including the date upon which such Warrant is exercised.
7. REGISTRATION RIGHTS.
(a) The holder of the Warrants shall have the same
registration rights, and be subject to the same terms and conditions, as set
forth in Section 19 of that certain Agreement and Plan of Merger dated March 10,
1999 by and among the Alliance Group, Inc., Alliance Acquisition VIII Corp.,
Commercial Telecom Systems, Inc., Xxxx Xxxxxxx, Xxxx Xxxxxxx and Xxxx Xxxxx.
(b) Notwithstanding the foregoing provisions of this Section
7, upon receipt of written notice from the holder or holders of the shares
issued and issuable upon exercise of the Warrants requesting that the Company
effect registration of the sale or distribution of Common Stock as provided in
Section 7(a), the Company shall have the option, for a period of ten (10) days
thereafter, to purchase all or any such Warrants and all or any such shares of
Common Stock acquired pursuant to the exercise of the Warrants and held by
holders providing the request for registration under Section 7(a) and held by
any other holder of Warrants or shares issued and will exercise its option if it
so elects as follows:
(i) as to such Warrants, at a price per Warrant equal
to the difference between (A) the average of the means between the closing bid
and asked prices of the Common Stock in the over-the-counter market for 20
consecutive business days commencing 30 business days before the date of receipt
of such notice, (B) if the Common Stock is quoted on the Nasdaq SmallCap Market,
at the average of the means of the daily closing bid and asked prices of the
Common Stock for 20 consecutive business days commencing 30 business days before
the date of such notice, or (C) if the Common Stock is listed on any national
securities exchange or quoted on the Nasdaq National Market System, at the
average of the daily closing prices of the Common Stock for 20 consecutive
business days commencing 30 business days before the date of such notice and the
Exercise Price of the Warrant at the time of receipt of such notice; and
(ii) as to shares of Common Stock previously purchased
pursuant to the exercise of Warrants, at a price per share equal to (A) the
average of the means between the closing
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bid and asked prices of the Common Stock in the over-the-counter market for 20
consecutive business days commencing 30 business days before the date of such
notice, (b) if the Common Stock is quoted on the Nasdaq SmallCap Market, at the
average of the means of the daily closing bid and asked prices of the Common
Stock for 20 consecutive business days commencing 30 business days before the
date of such notice or (C) if the Common Stock is listed on any national
securities exchange or the Nasdaq National Market System, at the average of the
daily closing prices of the Common Stock for 20 consecutive business days
commencing 30 business days before the date of such notice (such value of shares
so determined in this Section 7(d)(ii), as the case may be, is referred to
herein as the "Current Value").
8. INDEMNIFICATION; CONTRIBUTION.
(a) The Company will indemnify and hold harmless each holder
and each affiliate thereof of Common Stock registered pursuant to this Agreement
with the Commission, or under any Blue Sky Law or regulation against any losses,
claims, damages, or liabilities, joint or several, to which such holder may
become subject under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, registration statement, prospectus, or
any amendment or supplement thereto, 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 to make the statements therein not misleading, and
will reimburse each such holder and affiliate for any legal or other expenses
reasonably incurred by such holder in connection with investigating or defending
any such action or claim regardless of the negligence of any such holder or
affiliate; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus, registration statement or
prospectus, or any such amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by any such holder
expressly for use therein.
(b) Each holder of Common Stock registered pursuant to this
Agreement will indemnify and hold harmless the Company against any losses,
claims, damages, or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, registration statement or prospectus, or any amendment
or supplement thereto, 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 to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any preliminary
prospectus, registration statement or prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by such holder expressly for use therein.
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(c) Promptly after receipt by an indemnified party under
Sections 8(a) or (b) above of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under either such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability that it may otherwise
have to any indemnified party. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof the indemnifying party shall be entitled to assume the
defense thereof by notice in writing to the indemnified party. After notice from
the indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under either of such subsections for any legal expenses of other counsel
or any other expense, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation incurred prior to the assumption by the indemnifying party, unless
such expenses have been specifically authorized in writing by the indemnifying
party, the indemnifying party has failed to assume the defense and employ
counsel, or the named parties to any such action include both the indemnified
party and the indemnifying party, as appropriate, and such indemnified party has
been advised by counsel that the representation of such indemnified party and
the indemnifying party by the same counsel would be inappropriate due to actual
or potential differing interests between them, in each of which cases the fees
of counsel for the indemnified party will be paid by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b) in respect of any losses, claims, damages, or liabilities (or
action in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the holder or holders from this Agreement and from
the offering of the shares of Common Stock. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the holders in
connection with the statement or omissions that resulted in such losses, claims,
damages, or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the holder and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the holders agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the holders were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to above in this subsection
(e). Except as provided in Section 8(c), the amount paid or payable by an
indemnified party as a result of the losses, claims, damages, or liabilities (or
actions in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with
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investigation or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding any provision in this Section 8(d)
to the contrary, no holder shall be liable for any amount, in the aggregate, in
excess of the net proceeds to such holder from the sale of such holder's shares
(obtained upon exercise of Warrants) giving rise to such losses, claims,
damages, or liabilities.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability that the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any holder of Warrants within the meaning of the Act. The obligations of the
holders of Common Stock under this Section 8 shall be in addition to any
liability that such holders may otherwise have and shall extend, upon the same
terms and conditions to each person, if any, who controls the Company within the
meaning of the Act.
9. STOCK EXCHANGE LISTING. In the event the Company lists its Common
Stock on any national securities exchange, the Company will, at its expense,
also list on such exchange, upon exercise of a Warrant, all shares of Common
Stock issuable pursuant to such Warrant.
10. SPECIFIC PERFORMANCE. The Company stipulates that remedies at law,
in money damages, available to the holder of a Warrant, or of a holder of Common
Stock issued pursuant to exercise of a Warrant, in the event of any default or
threatened default by the Company in the performance of or compliance with any
of the terms of this Agreement are not and will not be adequate. Therefore, the
Company agrees that the terms of this Agreement may be specifically enforced by
a decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
11. SUCCESSORS AND ASSIGNS; BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of you and the Company and their
respective successors and permitted assigns.
12. NOTICES. Any notice hereunder shall be given by registered or
certified mail, if to the Company, at its principal office referred to in
Section 5 and, if to the holders, to their respective addresses shown in the
Warrant ledger of the Company, provided that any holder may at any time on three
(3) days' written notice to the Company designate or substitute another address
where notice is to be given. Notice shall be deemed given and received after a
certified or registered letter, properly addressed with postage prepaid, is
deposited in the U.S. mail.
13. SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Agreement.
14. ASSIGNMENT; REPLACEMENT OF WARRANTS. If the Warrant or Warrants are
assigned, in whole or in part, the Warrants shall be surrendered at the
principal office of the
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Company, and thereupon, in the case of a partial assignment, a new Warrant shall
be issued to the holder thereof covering the number of shares not assigned, and
the assignee shall be entitled to receive a new Warrant covering the number of
shares so assigned. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant and
appropriate bond or indemnification protection, the Company shall issue a new
Warrant of like tenor. Except as contemplated by Section 7 of this Agreement,
the Warrants will not be transferred, sold, or otherwise hypothecated by you or
any other person and the Warrants will be nontransferable, except to (i) one or
more persons, each of which on the date of transfer is an officer, or partner of
you; (ii) a partnership or partnerships, the partners of which are you and one
or more persons, each of whom on the date of transfer is an officer to you;
(iii) a successor to you in merger or consolidation; (iv) a purchaser of all or
substantially all of your assets; or (v) a person that receives a Warrant upon
death of a holder pursuant to will, trust, or the laws of intestate succession.
15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Oklahoma without giving effect to the
principles of choice of laws thereof.
16. DEFINITION. All references to the word "you" in this Agreement
shall be deemed to apply with equal effect to any persons or entities to whom
Warrants have been transferred in accordance with the terms hereof, and, where
appropriate, to any persons or entities holding shares of Common Stock issuable
upon exercise of Warrants.
17. HEADINGS. The headings herein are for purposes of reference only
and shall not limit or otherwise affect the meaning of any of the provisions
hereof.
Very truly yours,
LORECOM Technologies, Inc.
By:
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[issuer president], President
Accepted as of July __, 1999.
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Xxxx Xxxxxxx
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WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO THE ISSUER, THAT AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
No. W-2 10,000 Warrants
LORECOM TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
THIS IS TO CERTIFY that Xxxx Xxxxxxx or his assigns as permitted in
that certain Warrant Agreement (the "Warrant Agreement") dated July _____, 1999,
by and among the Company (as hereinafter defined) and Xxxx Xxxxxxx, is entitled
to purchase at any time or from time to time on or after one year from Warrant
Agreement date until 5:00 p.m., Oklahoma City, Oklahoma time on five years less
one day from Warrant Agreement date (unless otherwise specified in the Warrant
Agreement), an aggregate of ten thousand (10,000) shares of Common Stock, par
value $0.01 per share, of LORECOM Technologies, Inc., an Oklahoma corporation
(the "Company"), for an exercise price per share as set forth in the Warrant
Agreement referred to herein. This Warrant is issued pursuant to the Warrant
Agreement, and all rights of the holder of this Warrant are further governed by,
and subject to the terms and provisions of such Warrant Agreement, copies of
which are available upon request to the Company. The holder of this Warrant and
the shares issuable upon the exercise hereof shall be entitled to the benefits,
rights and privileges and subject to the obligations, duties and liabilities
provided in the Warrant Agreement.
The issuance of this Warrant and the shares issuable upon the due and
timely exercise hereof have not been registered under the Securities Act of
1933, as amended (the "Act"), or any similar state securities law or act, and,
as such, no public offering of either this Warrant or any of the shares of
Common Stock issuable upon exercise of this Warrant may be made other than under
an exemption under the Act or until the effectiveness of a registration
statement under such Act covering such offering. Transfer of this Warrant is
restricted as provided in Section 14 of the Warrant Agreement.
Subject to the provisions of the Act, of the Warrant Agreement and of
this Warrant, this Warrant and all rights hereunder are transferrable, in whole
or in part, only to the extent expressly permitted in such documents and then
only at the office of the Company at 00000 X. Xxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx
00000, Attention: President, by the holder hereof or by a duly authorized
attorney-in-fact, upon surrender of this Warrant duly endorsed, together with
the Assignment hereof duly endorsed. Until transfer hereof on the books of the
Company, the Company may treat the registered holder as the owner hereof for all
purposes.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
and its corporate seal to be hereunto affixed by its proper corporate officers
thereunto duly authorized.
LORECOM Technologies, Inc.
By:
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[president], President
