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EXHIBIT 4.1-A
WARRANT AGREEMENT
UStel, Inc., a Minnesota corporation (Company), and American Securities
Transfer & Trust, Inc. (AST), ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, a Colorado corporation (Warrant Agent), agree as follows:
1. Purpose. The Company proposes to publicly offer and issue 1,552,500
units (Units), each Unit consisting of (i) two shares of the Company's
$0.01 par value common stock (Shares) and (ii) one warrant permitting
the purchase of one Share (Warrant).
2. Warrants. Each Warrant will entitle the registered holder of a Warrant
(Warrant Holder) to purchase from the Company one Share at $4.00 per
share (Exercise Price). A Warrant Holder may exercise all of any
number of Warrants resulting in the purchase of a whole number of
Shares.
3. Exercise Period. The Warrants may be exercised at any time during the
period commencing ____________, 1997 and ending at 3:00 p.m., Denver,
Colorado time on ____________, 2002 (Expiration Date) except as changed
by Section 12 of this Agreement. After the Expiration Date, any
unexercised warrants will be void and all rights of Warrant Holders
shall cease.
4. Non-Detachability. A Warrant Certificate may not be detached from a
Share certificate contained in a Unit until after sixty days from
____________, or earlier at the discretion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Incorporated. Until such time a Warrant Certificate may be split up,
combined, exchanged or transferred on the books of the Warrant Agent
only together with a Share Certificate. After _____________, 19___, a
Warrant Certificate may be split up, combined, exchanged or transferred
on the books of the Warrant Agent.
5. Certificates. The Warrant Certificates shall be in registered form
only and shall be substantially in the form set forth in Exhibit A
attached to this Agreement. Warrant Certificates shall be signed by,
or shall bear the facsimile signature of, the President of a Vice
President of the Company and the Secretary or an Assistant Secretary of
the Company and shall bear a facsimile of the Company's corporate seal.
If any person, whose facsimile signature has been placed upon any
Warrant Certificate of the signature of an officer of the Company,
shall have ceased to be such officer before such Warrant Certificate is
countersigned, issued and delivered, such Warrant Certificate shall be
countersigned, issued and delivered with the same effect as if such
person had not ceased to be such officer. Any Warrant Certificate may
be signed by, or made to bear the facsimile signature of, any person
who at the actual date of the preparation of such Warrant Certificate
shall be a proper officer of the company to sign such
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Warrant Certificate even though such person was not such an officer
upon the date of the Agreement.
6. Countersigning. Warrant Certificates shall be manually countersigned
by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent hereby is authorized to countersign
and deliver to, or in accordance with the instructions of, any Warrant
Holder any Warrant Certificate which is properly issued.
7. Registration of Transfer and Exchanges. Subject to the provisions of
Section 4, the Warrant Agent shall from time to time register the
transfer of any outstanding Warrant Certificate upon records maintained
by the Warrant Agent for such purpose upon surrender of such Warrant
Certificate to the Warrant Agent for transfer, accompanied by
appropriate instruments of transfer in form satisfactory to the Company
and the Warrant Agent and duly executed by the Warrant Holder or a duly
authorized attorney. Upon any such registration of transfer, a new
Warrant Certificate shall be issued in the name of and to the
transferee and the surrendered Warrant Certificate shall be cancelled.
8. Exercise of Warrants.
a. Any one Warrant or any multiple of one Warrant evidenced by
any Warrant Certificate may be exercised upon any single
occasion on or after the Exercise Date, and on or before the
Expiration Date. A Warrant shall be exercised by the Warrant
Holder by surrendering to the Warrant Agent the Warrant
Certificate evidencing such Warrant with the exercise form on
the reverse of such Warrant Certificate duly completed and
executed and delivering to the Warrant Agent, by good check or
bank draft payable to the order of the Company, the Exercise
Price for each Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise form
thereon duly executed together with payment in full of the
Exercise Price for the Shares for which Warrants are then
being exercised, the Warrant Agent shall requisition from any
transfer agent for the Shares, and upon receipt shall make
delivery of, certificates evidencing the total number of whole
Shares for which Warrants are then being exercised in such
names and denominations as are required for delivery to, or in
accordance with the instructions of, the Warrant Holder. Such
certificates for the Shares shall be
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deemed to be issued, and the person whom such shares are
issued of record shall be deemed to have become a holder of
record of such Shares, as of the date for the surrender of
such Warrant Certificate and payment of the Exercise Price,
whichever shall last occur, provided that if the books of the
Company with respect to the Shares shall be deemed to be
issued, and the person to whom such Shares are issued of
record shall be deemed to have become a record holder of such
Shares, as of the date on which such books shall next be open
(whether before, on or after the Expiration Date) but at the
Exercise Price, whichever shall have last occurred, to the
Warrant Agent.
c. If less than all the Warrants evidenced by A Warrant
Certificate are exercised upon a single occasion, a new
Warrant Certificate for the balance of the Warrants not so
exercised shall be issued and delivered to, or in accordance
with, transfer instructions properly given by the Warrant
Holder until the Expiration Date.
d. All Warrant Certificates surrendered upon exercise of the
Warrants shall be cancelled.
e. Upon the exercise, or conversion of any warrant, the Warrant
Agent shall promptly deposit the payment into an escrow
account established by mutual agreement of the Issuer and the
Warrant Agent at a federally insured commercial bank. All
funds deposited in the escrow account will be disbursed on a
weekly basis to the issuer once they have been determined by
the Warrant Agent to be collected funds. Once the funds are
determined to be collected, the Warrant Agent shall cause the
share certificate(s) representing the exercised warrants to be
issued.
f. Expenses incurred by American Securities Transfer, Inc. while
acting in the capacity as Warrant Agent will be paid by the
Company. These expenses, including delivery of exercised
share certificate to the shareholder, will be deducted from
the exercise fee submitted prior to distribution of funds to
the Issuer. A detailed accounting statement relating to the
number of shares exercised, names of registered warrant holder
and the net amount of exercised, funds remitted will be given
to the Issuer with the payment of each exercise amount.
g. At the time of exercise of the warrant(s), the transfer fee is
to be paid by shareholder. In the event the shareholder must
pay the fee and fails to remit same, the fee will be deducted
from the proceeds prior to distribution to the Company.
9. Taxes. The Company will pay all taxes attributable to the initial
issuance of Shares upon exercise of Warrants. The Company shall not,
however, be required to pay any tax which may be payable in respect to
any transfer involved in any issue of Warrant Certificates or in the
issue of any certificates of Shares in the name other than that of the
Warrant Holder upon the exercise of any Warrant.
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10. Mutilated or Missing Warrant Certificates. If any Warrant Certificate
is mutilated, lost, stolen or destroyed, the Company and the Warrant
Agent may, on such terms as to indemnify or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated
Warrant Certificate, include the surrender thereof), and upon receipt
of evidence satisfactory to the Company and the Warrant Agent of such
mutilation, loss, theft or destruction, issue a substitute Warrant
Certificate of like denomination or tenor as the Warrant Certificate so
mutilated, lost, stolen or destroyed. Applicants for substitute
Warrant Certificates shall comply with such other reasonable
regulations and pay any reasonable charges as the Company or the
Warrant Agent may prescribe.
11. Reservation of Shares. For the purpose of enabling the Company to
satisfy all obligation to issue Shares upon exercise of Warrants, the
Company will at all times reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued
shares, the full number of Shares which may be issued upon the exercise
of Warrants will upon issue be fully paid and nonassessable by the
Company and free from all taxes, liens, charges and security interests
with respect to the issue thereof.
12. Governmental Restrictions. If any Shares issuable upon the exercise of
Warrants require registration or approval of any governmental
authority, the company will endeavor to secure such registration or
approval; provided that in no event shall such Shares be issued, and
the Company shall have the authority to suspend the exercise of all
Warrants, until such registration or approval shall have been obtained;
but all Warrants, the exercise of which is requested during any such
suspension, shall be exercisable at the Exercise Price. If any such
period of suspension continues past the Expiration Date, all Warrants,
the exercise of which have been requested on or prior to the Expiration
Date, shall be exercisable upon the removal of such suspension until
the close of business on the business day immediately following the
expiration of such suspension.
13. Adjustments. If prior to the exercise of any Warrants, the Company
shall have effected one or more stock split-ups, stock dividends or
other increases or reductions of the number of shares of its $0.01 par
value common stock outstanding without receiving compensation therefore
in money, services or property, the number of shares of common stock
subject to the Warrant granted shall, (i) if a net increase shall have
been effected in the number of outstanding shares of the Company's
common stock, be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced, and, (ii) if a net
reduction shall have been effected in the number of outstanding shares
of the Company's common stock, be proportionately reduced and the cash
consideration payable per share be proportionately increased.
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14. Notice to Warrant Holders. Upon any adjustment as described in Section
13, the Company within 20 days thereafter shall (i) cause to be filed
with the Warrant Agent a certificate signed by a Company officer
setting forth the details of such adjustment, the method of calculation
and the facts upon which such calculation is based, which certificate
shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause written notice of such adjustments to be
given to each Warrant Holder as of the record date applicable to such
adjustment. Also, if the Company proposes to enter into any
reorganization, reclassification, sale of substantially all of its
assets, consolidation, merger, dissolution, liquidation or winding up,
the Company shall give notice of such fact at least 20 days prior to
such action to all Warrant Holders which notice shall set forth such
facts as indicated the effect of such action (to the extent such effect
may be known at the date of such notice) on the Exercise Price and the
kind and amount of the shares or other securities and property
deliverable upon exercise of the Warrants. Without limiting the
obligation of the Company hereunder to provide notice to each Warrant
Holder, failure of the Company to give notice shall not invalidate
corporate action taken by the Company.
15. No Fractional Warrants or Shares. The Company shall not be required to
issue fractions of Warrants upon the reissue of Warrants, any
adjustments as described in Section 13 or otherwise; but the Company in
lieu of issuing any such fractional interest, shall round up or down to
the nearest full Warrant. If the total Warrants surrendered by
exercise would result in the issuance of a fractional share, the
Company shall not be required to issue a fractional share but rather
the aggregate number of shares issuable will be rounded up or down to
the nearest full share.
16. Rights of Warrant Holders. No Warrant Holder, as such, shall have any
rights of a shareholder of the Company, either at a law or equity, and
the rights of the Warrant Holders, as such, are limited to those rights
expressly provided in this Agreement or in the Warrant Certificates.
The Company and the Warrant Agent may treat the registered Warrant
Holder in respect of any Warrant Certificates as the absolute owner
thereof for all purposes notwithstanding any notice to the contrary.
17. Warrant Agent. The Company hereby appoints the Warrant Agent to act as
the agent of the Company and the Warrant Agent hereby accepts such
appointment upon the following terms and conditions by all of which the
Company and every Warrant Holder, by acceptance of his Warrants, shall
be bound:
a. Statements contained in this Agreement and in the Warrant
Certificates shall be taken as statements of the Company. The
Warrant Agent assumes no responsibility for the correctness of
any of the same except
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such as describes the Warrant Agent or for action taken or to
be taken by the Warrant Agent.
b. The Warrant Agent shall not be responsible for any failure of
the Company to comply with any of the Company's covenants
contained in this Agreement or in the Warrant Certificates.
c. The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and
the Warrant Agent shall incur no liability or responsibility
to the Company or to any Warrant Holder in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion or the advise of such
counsel, provided the Warrant Agent shall have exercised
reasonable care in the selection and continued employment of
such counsel.
d. The Warrant Agent shall incur no liability or responsibility
to the Company or to any Warrant Holder for any action taken
in reliance upon any notice, resolution, waiver, consent,
order, certificate or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
e. The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in
the execution of this Agreement, to reimburse the Warrant
Agent for all expenses, taxes and governmental charges and all
other charges of any kind in nature incurred by the Warrant
Agent in the execution of this Agreement and to indemnify the
Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for
this Agreement except as a result of the Warrant Agent's
negligence or bad faith.
f. The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other
action likely to involve expense unless the Company or one or
more Warrant Holders shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and expenses
which may be incurred in connection with such action, suit or
legal proceeding, but this provision shall not effect the
power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without any such
security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit
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or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the Warrant Holders as
their respective rights or interest may appear.
g. The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of
the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contact with or lend money to the
Company or otherwise act as fully and freely as though it were
not Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity
for the Company or for any other legal entity.
18. Successor Warrant Agent. Any corporation into which the Warrant Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding
to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or
filing of any paper of any further act of a party or the parties
hereto. In any such event or if the name of the Warrant Agent is
changed, the Warrant Agent or such successor may adopt the
countersignature of the original Warrant Agent and may countersign such
Warrant Certificates either in the name of the predecessor Warrant
Agent or in the name of the successor Warrant Agent.
19. Change of Warrant Agent. The Warrant Agent may resign or be discharged
by the Company from its duties under this Agreement by the Warrant
Agent or the Company, as the case may be, giving notice in writing to
the other, and by giving a date when such resignation or discharge
shall take effect, which notice shall be sent at least 30 days prior to
the date so specified. If the Warrant Agent shall resign, be
discharged or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any Warrant Holder or
after discharging the Warrant Agent, then any Warrant Holder may apply
to the District Court for Denver County, Colorado, for the appointment
of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such Court,
the duties of the Warrant Agent shall be carried out by the Company.
Any successor Warrant Agent, whether appointed by the Company or by
such Court, shall be a bank or a trust company, in good standing,
organized under the laws of the State of Colorado or of the United
States of America, having its principal office in Denver, Colorado and
having at
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the time of its appointment as Warrant Agent, a combined capital and
surplus of at least four million dollars. After appointment, the
successor Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed and the former Warrant Agent
shall deliver and transfer to the successor Warrant Agent any property
at the time held by it thereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for effecting the delivery
or transfer. Failure to give any notice provided for in the section,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the
appointment of the successor Warrant Agent, as the case may be.
20. Notices. Any notice or demand authorized by this Agreement to be given
or made by the Warrant Agent or by any Warrant Holder to or on the
Company shall be sufficiently given or made if sent by mail, first
class, certified or registered, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant
Agent), as follows:
UStel, Inc.
Attn: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Any notice or demand authorized by this Agreement to be given or made
by any Warrant Holder or by the Company to or on the Warrant Agent
shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company), as
follows:
American Securities Transfer & Trust, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Any distribution, notice or demand required or authorized by this
Agreement to be given or made by the Company or the Warrant Agent to or
on the Warrant Holders shall be sufficiently given or made if sent by
mail, first class, certified or registered, postage prepaid, addressed
to the Warrant Holders at their last known addresses as they shall
appear on the registration books for the Warrant Certificates
maintained by the Warrant Agent.
21. Supplements and Amendments. The Company and the Warrant Agent may from
time to time supplement or amend this Agreement without the approval of
any Warrant Holders in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any
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other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable.
22. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
23. Termination. This Agreement shall terminate at the close of business
on the Expiration Date or such earlier date upon which all Warrants
have been exercised; provided, however, that if exercise of the
Warrants is suspended pursuant to Section 12 and such suspension
continues past the Expiration Date, this Agreement shall terminate at
the close of business on the business day immediately following
expiration of such suspension. The provisions of Section 17 shall
survive such termination.
24. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
State of Colorado and for all purposes shall be construed in accordance
with the laws of said State.
25. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any person or corporation other than the Company, the
Warrant Agent and the Warrant Holders any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Warrant Agent and
the Warrant Holders.
26. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be
deemed to be an original and all such counterparts shall together
constitute but one and the same instrument.
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Date:
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UStel, Inc.
A corporation
---------------
By:
------------------------
SEAL
ATTEST:
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Secretary:
American Securities Transfer & Trust, Inc.
A Colorado corporation
By:
-------------------------
Vice President:
SEAL
ATTEST:
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