EXECUTION COPY
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO GLOBETEL COMMUNICATIONS CORP. THAT SUCH REGISTRATION IS NOT
REQUIRED.
CLASS A COMMON STOCK PURCHASE WARRANT
No. 2006-A-___ Issue Date: August 30, 2006
GLOBETEL COMMUNICATIONS CORP., a corporation organized under the laws of the
State of Delaware (the "Company"), hereby certifies that, for value
received_________________________,
_____________________________________________, Fax: (___) _______________, or
its assigns (the "Holder"), is entitled, subject to the terms set forth below,
to purchase from the Company at any time after the Issue Date until 5:00 p.m.,
E.S.T on the date five (5) years from the date hereof (the "Expiration Date"),
up to _________ fully paid and non-assessable shares of the common stock of the
Company (the "Common Stock"), $.00001 par value per share at a per share
purchase price of $____________. The afore-described purchase price per share,
as adjusted from time to time as herein provided, is referred to herein as the
"Warrant Exercise Price." The number and character of such shares of Common
Stock and the Warrant Exercise Price issuable upon the exercise of this warrant
(the "Class A Warrant," and with the Class B Warrant, the "Warrant") are subject
to adjustment as provided herein. The Company may reduce the Warrant Exercise
Price without the consent of the Holder.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in that certain Subscription Agreement (the "Subscription Agreement"),
dated August 30, 2006, entered into by the Company and the Holders.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Globetel Communications Corp. and
any corporation which shall succeed or assume the obligations of Globetel
Communications Corp. hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock,
$.00001 par value per share, as authorized on the date of the Subscription
Agreement, and (b) any other securities into which or for which any of the
securities described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
1. Exercise of Warrant.
1.1. Number of Shares Issuable upon Exercise. From and after
the Issue Date through and including the Expiration Date, the Holder hereof
shall be entitled to receive, upon exercise of this Warrant in whole in
accordance with the terms of subsection 1.2 or upon exercise of this Warrant in
part in accordance with subsection 1.3, shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.
1.2. Full Exercise. This Warrant may be exercised in full by
the Holder hereof by delivery of an original or facsimile copy of the form of
subscription attached as Exhibit A hereto (the "Subscription Form") duly
executed by such Holder and surrender of the original Warrant within three (3)
days of exercise, to the Company at its principal office or at the office of its
Warrant Agent (as provided hereinafter), accompanied by payment, in cash, wire
transfer or by certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Warrant Exercise Price
then in effect.
1.3. Partial Exercise. This Warrant may be exercised in part
(but not for a fractional share) by surrender of this Warrant in the manner and
at the place provided in subsection 1.2 except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying (a)
the number of whole shares of Common Stock designated by the Holder in the
Subscription Form by (b) the Warrant Exercise Price then in effect. On any such
partial exercise, the Company, at its expense, will forthwith issue and deliver
to or upon the order of the Holder hereof a new Warrant of like tenor, in the
name of the Holder hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of shares of Common
Stock for which such Warrant may still be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common
Stock as of a particular date (the "Determination Date") shall mean:
(a) If the Company's Common Stock is traded on an
exchange or is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq"), National Market System, the NASDAQ SmallCap
Market or the American Stock Exchange, LLC, then the closing or last sale price,
respectively, reported for the last business day immediately preceding the
Determination Date;
(b) If the Company's Common Stock is not traded on an
exchange or on the NASDAQ National Market System, the NASDAQ SmallCap Market or
the American Stock Exchange, Inc., but is traded in the over-the-counter market,
then the average of the closing bid and ask prices reported for the last
business day immediately preceding the Determination Date;
(c) Except as provided in clause (d) below, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided; or
(d) If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company's charter, then all amounts to
be payable per share to holders of the Common Stock pursuant to the charter in
the event of such liquidation, dissolution or winding up, plus all other amounts
to be payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of all of the Warrants are outstanding
at the Determination Date.
1.5. Company Acknowledgment. The Company will, at the time of
the exercise of the Warrant, upon the request of the Holder hereof acknowledge
in writing its continuing obligation to afford to such Holder any rights to
which such Holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the Holder shall fail to make
any such request, such failure shall not affect the continuing obligation of the
Company to afford to such Holder any such rights.
1.6. Trustee for Warrant Holders. In the event that a bank or
trust company shall have been appointed as trustee for the Holder of the
Warrants pursuant to Subsection 3.2, such bank or trust company shall have all
the powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
1.7 Delivery of Stock Certificates, etc. on Exercise. The
Company agrees that the shares of Common Stock purchased upon exercise of this
Warrant shall be deemed to be issued to the Holder hereof as the record owner of
such shares as of the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and non-assessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
1.8 Company's Right to Call.
(a) Subject to the provisions of clauses 1.8(b)
below, in the event that: (A) the volume weighted average price of a share of
Common Stock as traded on the Principal Market (or such other exchange or stock
market on which the Common Stock may then be listed or quoted) equals or exceeds
200% of the then applicable exercise price of this Warrant and (B) the minimum
daily trading volume of the Common Stock is not less than 1,000,000 shares, each
for a period of 20 consecutive trading days immediately prior to such notice,
then the Company, upon thirty (30) days' prior written notice (the "Notice
Period"), may call this Warrant with respect to up to 100% of the shares of
Common Stock then purchasable pursuant to this Warrant at a redemption price
equal to the Warrant Exercise Price then in effect, which right shall be
exercisable by the Company commencing on the Effective Date and continuing for a
period of two (2) years thereafter. Notwithstanding any such notice by the
Company, the Holder shall have the right to exercise this Warrant prior to the
end of the Notice Period.
(b) In connection with any transfer or exchange of
less than all of this Warrant, the transferring Holder shall deliver to the
Company an agreement or instrument executed by the transferring Holder and the
new Holder allocating between them on whatever basis they may determine in their
sole discretion any subsequent call of this Warrant by the Company, such that
after giving effect to such transfer the Company shall have the right to call
the same number of Warrants that it would have had if the transfer or exchange
had not occurred.
2. Cashless Exercise.
(a) If a Registration Statement, as such term is defined in
the Subscription Agreement (the "Registration Statement") is effective and the
Holder may sell its shares of Common Stock upon exercise hereof pursuant to the
Registration Statement, this Warrant may be exercisable in whole or in part for
cash only as set forth in Section 1 above. If no such Registration Statement is
available during the time that such Registration Statement is required to be
effective pursuant to the terms of the Subscription Agreement, then payment upon
exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Warrant Exercise Price, (ii) by
delivery of Common Stock issuable upon exercise of the Warrants in accordance
with Section (b) below or (iii) by a combination of any of the foregoing
methods, for the number of Common Stock specified in such form (as such exercise
number shall be adjusted to reflect any adjustment in the total number of shares
of Common Stock issuable to the holder per the terms of this Warrant) and the
holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.
(b) If the Fair Market Value of one share of Common Stock is
greater than the Warrant Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being cancelled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Subscription Form in
which event the Company shall issue to the holder a number of shares of Common
Stock computed using the following formula:
X=Y (A-B)
------
A
Where X= the number of shares of Common Stock to be
issued to the holder
Y= the number of shares of Common Stock
purchasable under the Warrant or, if only a
portion of the Warrant is being exercised,
the portion of the Warrant being exercised
(at the date of such calculation)
3
A= the Fair Market Value of one share of the
Company's Common Stock (at the date of such
calculation)
B= Warrant Exercise Price (as adjusted to the
date of such calculation)
(c) The Holder may employ the cashless exercise feature described in Section (b)
above only in the event that the Registration Statement is not effective.
For purposes of Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Reorganization, Consolidation, Merger, etc. In case at
any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.
3.2. Dissolution. In the event of any dissolution of the
Company following the transfer of all or substantially all of its properties or
assets, the Company, prior to such dissolution, shall at its expense deliver or
cause to be delivered the stock and other securities and property (including
cash, where applicable) receivable by the Holder of the Warrants after the
effective date of such dissolution pursuant to this Section 3 to a bank or trust
company (a "Trustee") having its principal office in New York, NY, as trustee
for the Holder of the Warrants.
3.3. Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 3, this Warrant shall continue in full force and
effect and the terms hereof shall be applicable to the Other Securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any Other Securities, including, in the case of any
such transfer, the person acquiring all or substantially all of the properties
or assets of the Company, whether or not such person shall have expressly
assumed the terms of this Warrant as provided in Section 4. In the event this
Warrant does not continue in full force and effect after the consummation of the
transaction described in this Section 3, then only in such event will the
Company's securities and property (including cash, where applicable) receivable
by the Holder of the Warrants be delivered to the Trustee as contemplated by
Section 3.2.
3.4 Share Issuance. If at any time Notes or the Warrants are
outstanding the Company shall offer, issue or agree to issue any common stock or
securities convertible into or exercisable for shares of common stock (or modify
any of the foregoing which may be outstanding) to any person or entity at a
price per share or conversion or exercise price per share which shall be less
than the Warrant Exercise Price, without the consent of each Holder holding
Warrants and/or other Securities, then the Company shall issue, for each such
occasion, additional shares of Common Stock to each Holder so that the average
per share purchase price of the shares of Common Stock issued to the Holder (of
only the Conversion Shares or Warrant Shares still owned by the Holder) is equal
to such other lower price per share and the Warrant Exercise Price shall
automatically be reduced to such other lower price per share. The average
Conversion Price of the Conversion Shares and average Warrant Exercise Price in
relation to the Warrant Shares shall be calculated separately for the Conversion
Shares and Warrant Shares. The foregoing calculation and issuance shall be made
separately for Conversion Shares received upon conversion and separately for
Warrant Shares. The delivery to the Holder of the additional shares of Common
Stock shall be not later than the closing date of the transaction giving rise to
the requirement to issue additional shares of Common Stock. The Holder is
granted the registration rights described in Section 11 of the Subscription
Agreement in relation to such additional shares of Common Stock except that the
Filing Date and Effective Date with respect to such additional shares of Common
Stock shall be, respectively, the sixtieth (60th) and one hundred and twentieth
(120th) date after the closing date giving rise to the requirement to issue the
additional shares of Common Stock. For purposes of the issuance and adjustment
described in this paragraph, the issuance of any security of the Company
carrying the right to convert such security into shares of Common Stock or of
any warrant, right or option to purchase Common Stock shall result in the
issuance of the additional shares of Common Stock upon the issuance of such
convertible security, warrant, right or option and again at any time upon any
subsequent issuances of shares of Common Stock upon exercise of such conversion
or purchase rights if such issuance is at a price lower than the Conversion
Price in effect upon such issuance. The rights of the Holder set forth in this
Section 3.4 are in addition to any other rights the Holder has pursuant to this
Warrant, the Subscription Agreement, any Transaction Document and any other
agreement referred to or entered into in connection herewith.
4
4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Warrant Exercise Price shall, simultaneously with the happening of
such event, be adjusted by multiplying the then Warrant Exercise Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall thereafter be the Warrant Exercise
Price then in effect. The Warrant Exercise Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. The number of shares of Common Stock
that the Holder of this Warrant shall thereafter, on the exercise hereof as
provided in Section 1, be entitled to receive shall be adjusted to a number
determined by multiplying the number of shares of Common Stock that would
otherwise (but for the provisions of this Section 4) be issuable on such
exercise by a fraction of which (a) the numerator is the Warrant Exercise Price
that would otherwise (but for the provisions of this Section 4) be in effect,
and (b) the denominator is the Warrant Exercise Price in effect on the date of
such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Warrant
Exercise Price and the number of shares of Common Stock to be received upon
exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of the
Warrant and any Warrant Agent of the Company (appointed pursuant to Section 11
hereof).
6. Reservation of Stock, etc. Issuable on Exercise of Warrant;
Financial Statements. The Company will at all times reserve and keep available,
solely for issuance and delivery on the exercise of the Warrants, all shares of
Common Stock (or Other Securities) from time to time issuable on the exercise of
the Warrant. This Warrant entitles the Holder hereof to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Company's Common Stock.
7. Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by any registered holder hereof (a "Transferor"). On the
surrender for exchange of this Warrant, with the Transferor's endorsement in the
form of Exhibit B attached hereto (the "Transferor Endorsement Form") and
together with an opinion of counsel reasonably satisfactory to the Company that
the transfer of this Warrant will be in compliance with applicable securities
laws, the Company at its expense, but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor. No such transfers shall result
in a public distribution of the Warrant.
5
8. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense, will execute and deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration Rights. The Holder of this Warrant has been granted
certain registration rights by the Company. These registration rights are set
forth in the Subscription Agreement. The terms of the Subscription Agreement are
incorporated herein by this reference. Upon the occurrence of a Non-Registration
Event, or in the event the Company is unable to issue Common Stock upon exercise
of this Warrant that has been registered in a Registration Statement described
in Section 11 of the Subscription Agreement, within the time periods described
in the Subscription Agreement, which Registration Statement must be effective
for the periods set forth in the Subscription Agreement, then upon written
demand made by the Holder, the Company will pay to the Holder of this Warrant,
in lieu of delivering Common Stock, a sum equal to the closing price of the
Company's Common Stock on the principal market or exchange upon which the Common
Stock is listed for trading on the trading date immediately preceding the date
notice is given by the Holder, less the Warrant Exercise Price, for each share
of Common Stock designated in such notice from the Holder.
10. Maximum Exercise.
(a) Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that may be acquired by the Holder upon
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its affiliates and any other persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the 1934 Act
and the rules and regulations promulgated thereunder. By written notice to the
Company, a Holder may waive the provisions of this Section 10(a) as to itself
but any such waiver will not be effective until the 61st day after delivery
thereof and such waiver shall have no effect on any other Holder.
(b) Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that may be acquired by the Holder upon
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its affiliates and any other persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the 1934 Act, does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the 1934 Act
and the rules and regulations promulgated thereunder. This provision may not be
waived.
(c) Notwithstanding anything to the contrary in this Warrant,
if the Company has not previously obtained Shareholder Approval (as defined
below), then the Company may not issue shares of Common Stock in excess of the
Issuable Maximum upon exercises of this Warrant at an exercise price which is
less than the closing bid price on the trading day immediately preceding the
Closing Date or date of the Subscription Agreement, whichever is higher (the
"Threshold Price"). The "Issuable Maximum" means, as of any date, a number of
shares of Common Stock equal to 21,504,469, less such number of shares of Common
Stock as have been issued at a price below the Threshold Price upon (1)
conversion of Notes, or (2) in payment of interest thereunder, or (3) upon
exercise of the Warrants, or (4) upon operation of any rights of first refusal
under the Agreement. Each Holder shall be entitled to a portion of the Issuable
Maximum equal to the quotient obtained by dividing: (x) the principal amount of
Notes issued and sold to such Holder on the Closing Date by (y) the aggregate
principal amount of all Notes issued and sold by the Company on the Closing
Date. If any Holder shall no longer hold Notes, then such Holder's remaining
portion of the Issuable Maximum shall be allocated pro-rata among the remaining
Holders, giving effect to the Company's desire to allocate this limitation among
the class of securities known as the Notes. If on any Conversion Date (as
defined in the Notes), or at such time as a Holder shall notify the Company that
the condition in (A) following this clause shall be in effect: (A) the aggregate
number of shares of Common Stock that would then be issuable upon exercise in
full of all then outstanding Warrants would exceed the Issuable Maximum on such
date, and (B) the Company shall not have previously obtained the vote of
shareholders, as may be required by the applicable rules and regulations of the
American Stock Exchange (or any successor entity or any other trading market on
which the Company's securities then trade), applicable to approve the issuance
of shares of Common Stock in excess of the Issuable Maximum pursuant to the
terms hereof (the "Shareholder Approval"), then, the Company shall issue to the
Holders a number of shares of Common Stock equal to the Issuable Maximum and,
with respect to the remainder of the aggregate Warrants then held by the Holders
for which an exercise would result in an issuance of shares of Common Stock in
excess of the Issuable Maximum, the Company must use its best efforts to seek
and obtain Shareholder Approval as soon as possible, but in any event not later
than the 60th day following such date of exercise or the date of such request.
The Company and the Holder understand and agree that Warrant Shares issued to
and then held by the Holder as a result of exercises of Warrants shall not be
entitled to cast votes on any resolution to obtain Shareholder Approval pursuant
hereto.
6
11. Warrant Agent. The Company may, by written notice to the Holder of
the Warrant, appoint an agent (a "Warrant Agent") for the purpose of issuing
Common Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and replacing this
Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.
12. Transfer on the Company's Books. Until this Warrant is transferred
on the books of the Company, the Company may treat the registered holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
13. Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company to: Globetel Communications
Corp., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇
▇▇▇▇, CEO, telecopier number: ▇▇▇-▇▇▇-▇▇▇▇ with a copy by telecopier only to
(not with respect to Forms of Subscription): ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, telecopier number: (954)
252-4265, and (ii) if to the Holder, to the address and telecopier number listed
on the first paragraph of this Warrant, with a copy by telecopier only to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇.
14. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York. Any dispute relating to this Warrant shall be
adjudicated in New York County in the State of New York. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
7
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
GLOBETEL COMMUNICATIONS CORP.
By:
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
CEO
Witness:
------------------------------------
8
Exhibit A
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: GLOBETEL COMMUNICATIONS CORP.
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):
___ ________ shares of the Common Stock covered by such Warrant; or
___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
___ $__________ in lawful money of the United States; and/or ___ the
cancellation of such portion of the attached Warrant as is exercisable for a
total of _______ shares of Common Stock (using a Fair Market Value of $_______
per share for purposes of this calculation); and/or
___ the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to _____________________________________________________
whose address is
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of Shares of Common Stock Beneficially Owned on the date of exercise:
Less than five percent (5%) of the outstanding Common Stock of Globetel
Communications Corp..
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.
Dated:___________________
---------------------------------------------
(Signature must conform to name of holder as
specified on the face of the Warrant)
(Address)
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of GLOBETEL COMMUNICATIONS CORP. to which the within
Warrant relates specified under the headings "Percentage Transferred" and
"Number Transferred," respectively, opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of GLOBETEL COMMUNICATIONS CORP. with full power of substitution in the
premises.
---------------------- -------------------------- ------------------------------
Transferees Percentage Transferred Number Transferred
---------------------- -------------------------- ------------------------------
---------------------- -------------------------- ------------------------------
---------------------- -------------------------- ------------------------------
---------------------- -------------------------- ------------------------------
Dated: ______________, ___________
------------------------------------------
(Signature must conform to name of holder
as specified on the face of the warrant)
Signed in the presence of:
---------------------------
(Name) ----------------------------------------
----------------------------------------
(address)
ACCEPTED AND AGREED:
[TRANSFEREE] ----------------------------------------
----------------------------------------
(address)
-----------------------------
(Name)