WARRANT AGREEMENT dated as of January 26, 1998 between THRUCOMM, INC.,
a Florida corporation (the "Company") and BLUE CHIP CAPITAL FUND LIMITED
PARTNERSHIP, a Delaware limited partnership (hereinafter referred to as the
"Holder").
WITNESSETH:
WHEREAS, the Company proposes to issue to the Holder warrants (the
"Warrants") to purchase up to an aggregate of 67,333 shares of common stock of
the Company (the "Common Stock"); and
WHEREAS, the Holder has provided the Company with a guarantee of a
$300,000 bridge loan, pursuant to which the Company agreed to issue these
Warrants if the bridge loan was not fully discharged on or before October 31,
1997, which it was not; and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Securities Purchase
Agreement dated as of January 26, 1998 among the Company and certain investors
relating to the issuance of the Company's Series B Senior Convertible Preferred
Stock) by the Company to the Holder in partial consideration for, and as part of
the Holder's compensation in connection with the aforementioned bridge loan;
NOW, THEREFORE, in consideration of the premises, the payment by the
Holder to the Company of an aggregate of one dollar ($1.00), the agreements
herein set forth and other good and valuable consideration, hereby acknowledged,
the parties hereto agree as follows:
1. Grant. The Holder is hereby granted the right to purchase, at any
time from January 27, 1998, until 5:30 P.M., Florida time, on January 27,
2001, up to an aggregate of 67,333 shares of Common Stock (the "Shares") at
an exercise price (subject to adjustment as provided in Section 7 hereof)
of $0.002 per share of Common Stock subject to the terms and conditions of
this Agreement.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement
shall be in the form set forth in Exhibit A, attached hereto and made a
part hereof, with such appropriate insertions, omissions, substitutions,
and other variations as required or permitted by this Agreement.
3. Exercise of Warrant. The Warrants initially are exercisable at an
aggregate initial exercise price (subject to adjustment as provided in
Section 7 hereof) per share of Common Stock set forth in Section 6 hereof
payable by certified or official bank check in New York Clearing House
funds, subject to adjustment as provided in Section 7 hereof. Upon
surrender of a Warrant Certificate with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the shares of Common Stock purchased at the
Company's principal offices in St. Petersburg, Florida (presently located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 33716) the Holder
shall be entitled to receive a certificate or certificates for the shares
of Common Stock so purchased. The purchase rights represented by each
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Warrant Certificate are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of the Common Stock
underlying the Warrants). Warrants may be exercised to purchase all or part
of the shares of Common Stock represented thereby. In the case of the
purchase of less than all the shares of Common Stock purchasable under any
Warrant Certificate, the Company shall cancel said Warrant Certificate upon
the surrender thereof and shall execute and deliver a new Warrant
Certificate of like tenor for the balance of the shares of Common Stock
purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for shares of Common Stock and/or other
securities, properties or rights underlying such Warrants, shall be made
forthwith (and in any event within five (5) business days thereafter)
without charge to the Holder thereof including, without limitation, any tax
which may be payable in respect of the issuance thereof, and such
certificates shall (subject to the provisions of Section 5 hereof) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of
the Holder, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
underlying the Warrants (and/or other securities, property or rights
issuable upon the exercise of the Warrants) shall be executed on behalf of
the Company by the manual or facsimile signature of the then President or
Vice President of the Company. Warrant Certificates shall be dated the date
of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof; that the Warrants may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, for a
period of one (1) year from the date hereof unless an exemption from the
Securities Act of 1933, as amended, is available therefor.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 7 hereof, the initial exercise price of each
Warrant shall be $0.002 per share of Common Stock. The adjusted
exercise price shall be the price which shall result from time to time
from any and all adjustments of the initial exercise price in
accordance with the provisions of Section 7 hereof.
6.2 Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price, depending
upon the context.
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7. Adjustments to Exercise Price and Number of Securities.
7.1 Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the
case of subdivision or increased in the case of combination. 2
7.2 Stock Dividends and Distributions. In case the Company shall
pay a dividend in, or make a distribution of, shares of Common Stock
or of the Company's capital stock convertible into Common Stock, the
Exercise Price shall forthwith be proportionately decreased. An
adjustment made pursuant to this Section 7.2 shall be made as of the
record date for the subject stock dividend or distribution.
7.3 Adjustment in Number of Securities. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 7, the
number of Warrant Securities issuable upon the exercise at the
adjusted exercise price of each Warrant shall be adjusted to the
nearest full amount by multiplying a number equal to the Exercise
Price in effect immediately prior to such adjustment by the number of
Warrant Securities issuable upon exercise of the Warrants immediately
prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
7.4 Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock
designated as Common Stock in the Articles of Incorporation of the
Company as may be amended as of the date hereof, or (ii) any other
class of stock resulting from successive changes or reclassifications
of such Common Stock consisting solely of changes in par value, or
from par value to no par value, or from no par value to par value.
7.5 Merger or Consolidation. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company
into, another corporation (other than a consolidation or merger which
does not result in any reclassification or change of the outstanding
Common Stock), the corporation formed by such consolidation or merger
shall execute and deliver to the Holder a supplemental warrant
agreement providing that the holder of each Warrant then outstanding
or to be outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such warrant,
the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of
the number of shares of Common Stock of the Company for which such
warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant
agreement shall provide for adjustments which shall be identical to
the adjustments provided in this Section 7. The above provision of
this subsection shall similarly apply to successive consolidations or
mergers.
7.6 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made:
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(a) Upon the issuance or sale of the Warrants or the shares
of Common Stock issuable upon the exercise of the Warrants;
(b) If the amount of said adjustment shall be less than two
cents (2c) per Warrant Security, provided, however, that in such
case any adjustment that would otherwise be required then to be
made shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment which, together
with any adjustment so carried forward, shall amount to at least
two cents (2c) per Warrant Security.
8. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by
the registered Holder at the principal executive office of the Company, for
a new Warrant Certificate of like tenor and date representing in the
aggregate the right to purchase the same number of Warrant Securities in
such denominations as shall be designated by the Holder thereof at the time
of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation
of the Warrants, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor, in lieu thereof.
9. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Warrants, nor shall it be required to issue
scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding
any fraction up to the nearest whole number of shares of Common Stock or
other securities, properties or rights.
10. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the
Warrants, such number of shares of Common Stock or other securities,
properties or rights as shall be issuable upon the exercise thereof. The
Company covenants and agrees that, upon exercise of the Warrants and
payment of the Exercise Price therefor, all shares of Common Stock and
other securities issuable upon such exercise shall be duly and validly
issued, fully paid, non-assessable and not subject to the preemptive rights
of any stockholder. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all shares of Common Stock
issuable upon the exercise of the Warrants to be listed (subject to
official notice of issuance) on all securities exchanges on which the
Common Stock issued to the public in connection herewith may then be listed
and/or quoted.
11. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholder for the election of directors or any other matter, or as having
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any rights whatsoever as a stockholder of the Company. If, however, at any
time prior to the expiration of the Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or
retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed; then, in any one or more of said events,
the Company shall give written notice of such event at least fifteen
(15) days prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the stockholder
entitled to such dividend, distribution, convertible or exchangeable
securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice
shall specify such record date or the date of closing the transfer
books, as the case may be. Failure to give such notice or any defect
therein shall not affect the validity of any action taken in
connection with the declaration or payment of any such dividend, or
the issuance of any convertible or exchangeable , securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
12. Representations.
12.1 Authorization. This Warrant has been duly and validly
authorized, executed and delivered by the Company, and constitutes the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
12.2. Authorized Common Stock. The authorized Common Stock of the
Company consists solely of 100,000,000 shares of Common Stock, of
which one share has been issued and is outstanding and of which
6,733,000 shares have been reserved for issuance pursuant to
Convertible Preferred Stock, options and Warrants.
13. Notices.
13.1 Delivery of Notices. Any notice shall be deemed to have been
duly delivered (a) when delivered by hand, if personally delivered,
(b) if sent by mail to a party whose address is in the same country as
the sender, two Business Days after being deposited in the mail, via
registered or certified mail, return receipt requested, postage
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prepaid, (c) if sent by facsimile transmission on a Business Day, when
receipt is acknowledged or, if sent on a day that is not a Business
Day, on the next Business Day following the day on which receipt is
acknowledged, and (d) if sent by recognized international courier,
freight prepaid, with a copy sent by telecopier, to a party whose
address is not in the same country as the sender, three Business Days
after the later of (i) being telecopied and (ii) delivery to such
courier.
13.2 Addresses for Notice. All communications (including all
required or permitted notices) pursuant to the provisions hereof shall
be in writing and shall be sent:
(a) If to the registered Holder of the Warrants, to the
address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by
notice to the Holder.
14. Supplements and Amendments. The Company and the Holder may from
time to time supplement or amend this Agreement in order to cure any
ambiguity, to correct or supplement any provision contained herein which
may be defective or inconsistent with any provisions herein, or to make any
other provisions in regard to matters or questions arising hereunder which
the Company and the Holder may deem necessary or desirable and which the
Company and the Holder deem shall not adversely affect the interests of the
Holder.
15. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holder
and their respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the close of
business on January 27, 2001.
17. Governing Law; Submission to Jurisdiction. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Florida and for all purposes shall be
construed in accordance with the laws of said State without giving effect
to the rules of said State governing the conflicts of laws.
The Company and the Holder hereby agree that any action, proceeding or
claim against it arising out of, or relating in any way to, this Agreement
shall be brought and enforced in the courts of the State of Florida or of
the United States of America for the Middle District of Florida, and
irrevocably submit to such jurisdiction, which jurisdiction shall be
exclusive. The Company and the Holder hereby irrevocably waive any
objection to such exclusive jurisdiction or inconvenient forum. Any such
process or summons to be served upon any of the Company and the Holder (at
the option of the party bringing such action, proceeding or claim) may be
served by transmitting a copy thereof, by registered or certified mail,
return receipt requested, postage prepaid, addressed to it at the address
set forth in Section 13 hereof. Such mailing shall be deemed personal
service and shall be legal and binding upon the party so served in any
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action, proceeding or claim. The Company and the Holder agree that the
prevailing party(ies) in any such action or proceeding shall be entitled to
recover from the other party(ies) all of its/their reasonable legal costs
and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
18. Entire Agreement; Modification. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof and may not be modified or amended except by a writing duly signed
by the party against whom enforcement of the modification or amendment is
sought.
19. Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
20. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they
be construed as, a part of this Agreement and shall be given no substantive
effect.
21. Benefits of this Amendment. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and
the Holder any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole benefit of the Company
and the Holder.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and such counterparts shall together constitute but one
and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THRUCOMM, INC.
By: _____________________________
Name: ___________________________
Title:___________________________
BLUE CHIP CAPITAL FUND LIMITED PARTNERSHIP
By: Blue Chip Venture Company,
it General Partner
By: _____________________________
Name: ___________________________
Title:___________________________
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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, AS AMENDED
(THE "ACT"), (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER THE 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.
EXERCISABLE ON OR BEFORE
5:30 P.M., FLORIDA TIME, JANUARY 27, 2001
No. W-1
Warrants to Purchase
67,333 Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that Blue Chip Capital Fund Limited
Partnership is the registered holder of Warrants to purchase initially, at any
time from January 27, 1998 until 5:30 p.m. Florida time on January 27, 2001
("Expiration Date"), up to 67,333 fully-paid and non-assessable shares of common
stock, (the "Common Stock") of THRUCOMM, INC., a Florida corporation (the
"Company"), (one share of Common Stock referred to individually as a "Security"
and collectively as the "Securities") at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $0.002 per share of
Common Stock upon surrender of this Warrant Certificate and payment of the
Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the warrant agreement dated as of January 26,
1998 among the Company and Blue Chip Capital Fund Limited Partnership (the
"Warrant Agreement"). Payment of the Exercise Price shall be made by certified
or official bank check in New York Clearing House funds payable to the order of
the Company.
No Warrant may be exercised after 5:30 p.m., Florida time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holder (the word "holder" meaning the registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
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however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed under its corporate seal.
Dated as of January 26, 1998
THRUCOMM, INC.
[SEAL] By:_______________________________
Name:_____________________________
Title:____________________________
Attest:
______________________________________
Secretary
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FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase:
__________ shares of Common Stock;
and herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of Thrucomm, Inc. in
the amount of $______________, all in accordance with the terms of Section 3 of
the Warrant Agreement dated as of January 26, 1998 among Thrucomm, Inc. and Blue
Chip Capital Fund Limited Partnership. The undersigned requests that a
certificate for such securities be registered in the name of
___________________________________________________ whose address is
_____________________________________________________________________ and that
such Certificate be delivered to ______________________________________________
whose address is______________________________________________________.
Dated:__________________________
Signature_____________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
______________________________________________
(Insert Social Security or Other Identifying
Number of Holder)
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant
Certificate.)
FOR VALUE RECEIVED________________________ hereby sells, assigns and
transfers unto_________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
_______________________________________________________ attorney-in-fact, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ________________ Signature: ___________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
______________________________________________
(Insert Social Security or Other Identifying
Number of Holder)
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