WARRANT AGREEMENT #1 TO PURCHASE
COMMON STOCK OF
TEL-SAVE HOLDINGS, INC.
Date of Grant: January 11, 1996.
Void after 5:00 p.m. Eastern Standard Time on December 31, 1996.
This is to verify that, FOR VALUE RECEIVED, Collective Communications
Services, with a principal address as indicated on the Company's books and
records, or only those assigns specifically permitted under the terms hereof
(hereinafter referred to as the "Holder") is entitled to purchase, subject to
the terms and conditions hereof, from Tel-Save Holdings, Inc., a Delaware
corporation ("Company"), or its assigns, 240,000 shares of Common Stock (the
"Common Stock") during the period commencing at 9:00 a.m., Eastern Standard Time
on June 1, 1996 (the "Commencement Date") and ending at 5:00 p.m. Eastern
Standard Time on December 31, 1996 (the "Termination Date") at an exercise price
of $14.00* per share of Common Stock. The number of shares of Common Stock
purchasable upon the exercise of this Warrant (the "Warrant(s)") and the
exercise price per share shall be subject to adjustment from time to time upon
the occurrence of certain events as set forth below.
The shares of Common Stock or any other shares or other units of stock or
other securities or property, or any combination thereof then receivable upon
exercise of this Warrant, as adjusted from time to time, are sometimes referred
to hereinafter as "Exercise Shares." The exercise price per share as from time
to time in effect is referred to hereinafter as the "Exercise Price."
1. Vesting and Exercise of Warrant; Issuance of Exercise Shares.
(a) Exercise of Warrant. Subject to compliance with the vesting provisions
identified at Subparagraph (b) below, this Warrant may be exercised in whole or
in part at any time or from time to time on or after the Commencement Date and
until and including the Termination Date. Following the Termination Date, in the
absence of the exercise hereof, the Holder shall have no rights herein and this
Warrant shall lapse. This Warrant may be surrendered on any business day to the
Company at its principal office, presently located at the address of the Company
set forth in paragraph 11 hereof (or such other office of the Company, if any,
as shall theretofore have been designated by the Company by written
----------
*The closing price of the Company's Common Stock on The NASDAQ Stock Market on
the date of the grant was $12.25.
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notice to the Holder), together with: (i) a completed and executed Notice of
Warrant Exercise in the form set forth in Appendix A hereto and made a part
hereof and (ii) (A) payment of the full Exercise Price for the amount of
Exercise Shares set forth in the Notice of Warrant Exercise, in lawful money of
the United States of America by certified check or cashier's check, made payable
to the order of the Company or (B) at the request of Holder and to the extent
permitted by applicable law, the Company in its sole discretion may selectively
approve arrangements with a brokerage firm under which such brokerage firm, on
behalf of the Holder, shall pay the Company the Exercise Price, and the Company,
pursuant to an irrevocable notice from Holder (the form of which is satisfactory
to the Company), shall promptly deliver the Exercise Shares being purchased to
such firm. In the event of an Assignment (as hereinafter defined), the Company
shall deliver to the Assignee (as hereinafter defined) any Warrants surrendered
for exercise, together with the related Notice of Warrant exercise and the
Exercise Price and, to the extent payment is to be effected in accordance with
clause (ii) (B) above, payment shall be made to the Assignee against delivery by
the Assignee of the Exercise Shares.
In the event that this Warrant shall be duly exercised in part prior to
the Termination Date, the Company shall issue a new Warrant or Warrants of like
tenor evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.
No adjustments shall be made for any cash dividends on Exercise Shares
issuable upon exercise of the Warrant. The Company shall cancel Warrant
Certificates surrendered upon exercise of Warrants.
(b) Vesting Contingency. Notwithstanding anything to the contrary
contained herein, the Holder's right, title and interest in and to this Warrant
shall only vest, and the Company's obligation to issue the Exercise Shares shall
only remain in effect provided that (1) the Holder is current in all payments
for billing from the Company, (2) the Holder is in general good standing with
the Company and is in compliance with the tariff or contract terms with the
Company, (3) the Company or one of its subsidiaries has entered into definitive
and exclusive agreements with The General Motors Corporation Commercial Mortgage
("GMCCM") pursuant to which the Company or one of its subsidiaries is to provide
shares tenant telecommunication services to tenants of multi-tenant office
buildings and building complexes and residences developed, owned or financed by
GMCCM ("Shared Tenant Agreement"), and (5) disclosure of the Shared Tenant
Agreement and related information has been made and/or provided by GMCCM or
Holder to the Company, as the Company determines.
(c) Issuance of Exercise Shares; Delivery of Warrant Certificate. The
Company or the Assignee, as applicable, shall, within ten (10) business days or
as soon thereafter as is practicable of the exercise of this Warrant, issue in
the name of and cause to be delivered, or in the case of an Assignment shall
deliver (together with a duly executed stock power), to the Holder (or such
other person or persons, if any, as specifically permitted under the terms
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hereof and as the Holder shall have designated in the Notice of Warrant
Exercise) one or more certificates representing the Exercise Shares to which the
Holder (or such other person or persons) shall be entitled upon such exercise
under the terms hereof. Such certificate or certificates shall be deemed to have
been issued and the Holder (or such other person or persons so permitted and
designated) shall be deemed to have become the record holder of the Exercise
Shares as of the date of the due exercise of this Warrant.
(d) Exercise Shares Fully Paid and Non-assessable. The Company agrees and
covenants for itself and on behalf of any Assignee that all Exercise Shares
issuable or deliverable upon the due exercise of the Warrant represented by this
Warrant Certificate will, upon issuance in accordance with the terms hereof, be
duly authorized, validly issued, fully paid and non-assessable and free and
clear of all taxes (other than those taxes which, pursuant to Paragraph 2
hereof, the Company shall not be obligated to pay) or liens, charges, and
security interests created by the Company with respect to the issuance thereof.
(e) Reservation of Exercise Shares. In connection with or as soon as
practicable after any action which would cause an adjustment pursuant to
Paragraph 8 hereof increasing the number of shares of capital stock constituting
the Exercise Shares, the Company will take as soon as practicable after such
action any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company have remaining, after such adjustment, a
number of shares of such capital stock unissued and unreserved for other
purposes sufficient to permit the exercise of all the then outstanding Warrants
of like tenor immediately after such adjustment; the Company will also from time
to time take action to increase the authorized amount of its capital stock
constituting the Exercise Shares if at any time the number of shares of capital
stock authorized but remaining unissued and unreserved for other purposes shall
be insufficient to permit the exercise of the Warrants then outstanding. The
Company may but shall not be required to reserve and keep available, out of the
aggregate of its authorized but unissued shares of capital stock, for the
purpose of enabling it to satisfy any obligation to issue Exercise Shares upon
exercise of Warrants, through the Termination Date, the number of Exercise
Shares deliverable upon the full exercise of this Warrant and all other Warrants
of like tenor then outstanding.
At the time of or before taking any action which would cause an adjustment
pursuant to Paragraph 8 hereof, reducing the Exercise Price below then par value
(if any) of the Exercise Shares issuable upon exercise of the Warrants, the
Company will take any corporate action which may, in the opinion of its counsel,
be necessary in order to assure that the par value per share of the Exercise
Shares is at all times equal to or less than the Exercise Price per share and so
that the Company may validly and legally issue fully paid and non-assessable
Exercise Shares at the Exercise Price, as so adjusted; the Company will also
from time to time take such action if at any time the Exercise Price is below
the then par value of the Exercise Shares.
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(f) Fractional Shares. Neither, the Company nor any Assignee shall be
required to the issue fractional shares of capital stock upon the exercise of
this Warrant or to deliver Warrant Certificates which evidence fractional shares
of capital stock. In the event that any fraction of an Exercise Share would,
except for the provisions of this Subparagraph (f), be issuable upon the
exercise of this Warrant, the Company or the Assignee, as the case may be, shall
pay to the Holder exercising the Warrant an amount in cash equal to such
fraction multiplied by the "Current Market Value" of the Exercise Share. For
purposes of this Subparagraph (f), the "Current Market Value" shall be
determined as follows:
(i) if the Exercise Shares are traded in the over-the-counter market
and not on any national securities exchange and not in the NASDAQ Reporting
System, the average of the mean between the last bid and asked prices per share,
as reported by the National Quotation Bureau, Inc., or an equivalent generally
accepted reporting service, for the last business day prior to the date on which
this Warrant is exercised, or if not so reported, the average of the closing bid
and asked prices for an Exercise Share as furnished to the Company by any member
of the National Association of Securities Dealers, Inc., selected by the Company
for that purpose.
(ii) if the Exercise Shares are listed or traded on a national
securities exchange or in the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded or
in the National Market, as the case may be, on the last business day prior to
the date of the exercise of this Warrant. The closing price referred to in this
clause (ii) shall be the last reported sales price, or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices, in either case on the national securities exchange on which the Exercise
shares are then listed or in the NASDAQ Reporting System; or
(iii) if no such closing price or closing bid and asked prices are
available, as determined in any reasonable manner as may be prescribed by the
Board of Directors of the Company.
2. Payment of Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Exercise Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Exercise Shares in a
name other than that of the Holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, 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.
3. Mutilated or Missing Warrant Certificates. In case any Warrant Certificate
shall be mutilated, lost, stolen or destroyed, the Company may in its discretion
issue, in exchange and substitution for and upon cancellation of the mutilated
Warrant Certificate, or in lieu of
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an in substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate or Warrant Certificates of like tenor and in the same
aggregate denomination, but only (i) in the case of loss, theft or destruction,
upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant Certificate and indemnity or bond, if requested,
also satisfactory to them and (ii) in the case of mutilation, upon surrender of
the mutilated Warrant. Applicants for such substitute Warrant Certificates shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company or its counsel may prescribe.
4. Rights of Holder. The Holder shall not, by virtue of anything contained in
this Warrant Certificate or otherwise, be entitled to any right whatsoever,
either in law or equity, of a stockholder of the Company, including without
limitation, the right to receive dividends or to vote or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
the election of directors of the Company or any other matter.
5. Release. Holder and any assignee of Holder, on behalf of itself, its past and
present subsidiaries, successors, assigns and its and their officers, directors,
employees, agents, creditors, trustees, attorneys and successors (collectively
"Holder Releasors"), does hereby release, acquit and forever discharge Company,
Assignee or any assignor of this Warrant (i.e. a previous Holder) and the
Company's past and present subsidiaries, affiliates, stockholders, successors,
assigns, customers, investment bankers, agents and its and their officers,
directors, employees, agents, attorneys, and their estates, assigns and
successors (collectively, "Company Releasees"), from any and all claims,
actions, causes of action, suits, demands, rights, damages, costs, loss of
service, service, expenses, or compensation of any sort whatsoever, known or
unknown, foreseen or unforeseen, which Holder Releasors ever had, now have or
hereafter can, shall or may have against Company Releasees, by reason of any
matter, cause, event, action, or inaction or thing from whatsoever from the
beginning of time to the date of this Warrant.
6. Right of First Refusal.
(a) If at any time any Holder determines to sell or transfer any or all of
this Warrant or the Exercise Shares and/or receives a bona fide written offer to
purchase any or all of this Warrant or any or all of such Exercise Shares
(hereafter referred to in either case as an "Offer") which the Holder or any
subsequent Holder desires to accept, Holder or any subsequent Holder must first
offer (hereafter called the "Right of First Refusal") to sell such Warrant or
Exercise Shares, or any portion thereof, to the Company upon the "Offer Terms"
(as described below). Notwithstanding the foregoing, the Right of First Refusal
shall not apply to the one-time transfer of the Warrant from Holder to ▇▇▇▇▇▇
▇'▇▇▇▇ ▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the existing shareholders of Holder
(collectively, "CCS Shareholders" and individually, "CCS Shareholder").
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(b) In the event Holder or any subsequent Holder receives an Offer, Holder
or any subsequent Holder, as the case may be, shall notify the Company in
writing of such Offer, including the proposed price and other terms and
conditions of the Offer ("Offer Terms"), and the Company shall have ten (10)
business days after the date such written notice is sent to the Company by first
class mail (with a copy sent by facsimile on the date of mailing if the Company
has a facsimile machine) to elect to exercise its Right of First Refusal. Such
election shall be made by the Company by sending written notice to Holder or any
subsequent Holder by first class mail (with a copy sent by facsimile on the date
of mailing if Holder has a facsimile machine) within such ten (10) day period.
In the absence of such written notice, the Company shall be deemed to have
waived its Right of First Refusal with respect to such Offer but not with
respect to any other proposed sale by (or offer that he receives) which is
subject to the right of First Refusal contained herein.
(c) Contemporaneous with the execution hereof, Holder and any subsequent
Holder agrees to enter into the Voting Trust Agreement in the form attached
hereto as Appendix B.
7. Registration of Transfers and Exchanges. This Warrant shall be transferable,
subject to the provisions of this Paragraph and Paragraph 9 hereof, only upon
the books of the Company if any, to be maintained by it for that purpose, upon
surrender of the Warrant Certificate to the Company at its principal office
accompanied (if so required by it) by a written instrument or instruments of
transfer in form satisfactory to the Company and duly executed by the Holder
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. In all cases of transfer by a
power of attorney, the original power of attorney, duly approved, or a power of
official copy thereof, duly certified, shall be deposited and remain with the
Company. In case of transfer by executors, administrators, guardians or other
legal representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Company in its
discretion. Any registration of transfer of the Warrant is subject to transferee
agreeing to and accepting the terms of this Warrant Agreement and upon such
acceptance, a new Warrant Certificate shall be issued to the transferee named in
such instrument of transfer, and the surrendered Warrant Certificate shall be
canceled by the Company.
Any Warrant Certificate may be exchanged, at the option of the Holders
thereof and without change, when surrendered to the Company at its principal
office, or at the office of its transfer agent, if any, for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate the right to purchase from the Company a like number and kind of
Exercise Shares as the Warrant Certificate surrendered for exchange or transfer,
and the Warrant Certificate so surrendered shall be canceled by the Company or
transfer agent, as the case may be.
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8. Adjustment of Exercise Shares and Exercise Price. The Exercise Price and the
number and kind of Exercise Shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the happening of certain
events as hereinafter provided. The Exercise Price in effect at any time and the
number and kind of securities purchasable upon exercise of each Warrant shall be
subject to adjustment as follows:
(a) In the case the Company shall (i) pay a dividend or make a
distribution on its shares of Common Stock in shares of Common Stock, (ii)
subdivide or classify its outstanding Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding Common Stock into a
smaller number of shares, the Exercise Price in effect at the time of the record
date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be proportionally adjusted so
that the Holder of this Warrant exercised after such date shall be entitled to
receive the aggregate number and kind of shares which, if this Warrant had been
exercised by such Holder immediately prior to such date, he would have owned
upon such exercise and been entitled to receive upon such dividend, subdivision,
combination or reclassification. For example, if the Company declares a 2 for 1
stock dividend or stock split and the Exercise Price immediately prior to such
event was $5.00 per share, the adjusted Exercise Price immediately after such
event would be $2.50 per share. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Company shall hereafter issue rights or warrants to all
Holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock (or securities convertible into Common Stock) at a price (or
having a conversion price per share) less than the "Current Market Price" of the
Common Stock (as defined in Subparagraph (d) of this Paragraph below) on the
record date mentioned below, the Exercise Price shall be adjusted so that the
same shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the date of such issuance by a fraction, the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and the number of additional
shares of Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at the "Current Market Price"
per share of the Common Stock, and the denominator of which shall be the sum of
the number of shares of Common Stock outstanding on such record date and the
number of additional shares of Common Stock offered for subscription or purchase
(or into which the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever such rights or warrants are
issued and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights or warrants; and
to the extent that shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after the expiration of such
rights or warrants the Exercise Price shall be readjusted to the Exercise Price
which would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible into Common Stock) actually
delivered.
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(c) Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to Subparagraphs (a) and (b) above, the number of Exercise
Shares purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of Exercise Shares initially issuable upon
exercise of this Warrant by the Exercise Price in effect on the date hereof and
dividing the product so obtained by the Exercise Price, as adjusted.
(d) For the purpose of any computation under Subparagraph (b) above, the
"Current Market Price" per share of Common Stock at any date shall be deemed to
be the average of the daily closing prices for 30 consecutive business days
before such date. The closing price for each day shall be the last sale price
regular way or, in case no such reported sale takes place on such day, the
average of the last reported bid and lowest reported asked prices as reported by
NASDAQ, or other similar organization if NASDAQ is no longer reporting such
information, or if not so available, the fair market price as determined by the
Board of Directors.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least ten cents ($0.10)
in such price; provided, however, that any adjustments which by reason of this
Subparagraph (e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment required to be made hereunder. All
calculations under this Paragraph 8 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. Anything in this Paragraph
8 to the contrary notwithstanding, the Company shall be entitled, but shall not
be required, to make such changes in the Exercise Price, in addition to those
required by this Paragraph 8, as it, in its sole discretion, shall determine to
be advisable in order that any dividend or distribution in shares of Common
Stock, subdivision, reclassification or combination of Common Stock, issuance of
Warrants to Purchase Common Stock or distribution of evidences of indebtedness
or other assets (excluding cash dividends) referred to hereinabove in this
Paragraph 8 hereafter made by the Company to the Holders of its Common Stock
shall not result in any tax to the Holders of its Common Stock or securities
convertible into Common Stock.
(f) Whenever the Exercise Price is adjusted, as herein provided, the
Company shall promptly cause a notice setting forth the adjusted Exercise Price
and adjusted number of Exercise Shares issuable upon exercise of each Warrant to
be mailed to the Holders, at their last addresses appearing in the books of the
Company, and shall cause a certified copy thereof to be mailed to its transfer
agent, if any. The Company may retain a firm of independent certified public
accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation required by this
Paragraph 8, and a certificate signed by such firm shall be conclusive evidence
of the correctness of such adjustment.
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(g) In the event that at any time, as a result of an adjustment made
pursuant to Subparagraph 8(a) above, the Holder of this Warrant thereafter shall
become entitled to receive any Exercise Shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Subparagraphs (a) to (e) of Paragraph 8, inclusive
above.
(h) Irrespective of any adjustments in the Exercise Price or the number or
kind of Exercise Shares purchasable upon exercise of this Warrant, Warrant
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Agreement.
(i) Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder and the Company shall, forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Holder.
9. Restrictions on Transferability; Restrictive Legend. This Warrant may not be
transferred by the Holder without the prior written consent of the Company
except (1) the one-time transfer of the Warrants from Holder to CCS
Shareholders, and (2) by means of intestacy or testamentary bequest. Any
transfer of this Warrant in violation of this Paragraph 9 is null and void as of
the time of such transfer. In addition, neither this Warrant nor the Exercise
Shares shall be transferable except in accordance with the provisions of this
paragraph.
(a) Restrictions on Transfer; Indemnification. Neither this Warrant nor
any Exercise Share may be offered for sale or sold, or otherwise transferred or
sold in any transaction which would constitute a sale thereof within the meaning
of the Securities Act of 1933, as amended (the "1933 Act"), unless (i) such
security has been registered for sale under the 1933 Act and registered or
qualified under applicable state securities laws relating to the offer and sale
of securities, or (ii) exemptions from the registration requirements of the 1933
Act and the registration or qualification requirements of all such state
securities laws are available and the Company shall have received an opinion of
counsel satisfactory to the Company that the proposed sale or other disposition
of such securities may be effected without registration under the 1933 Act and
would not result in any violation of any applicable state securities laws
relating to the registration or qualification of securities for sale, such
counsel and such opinion to be satisfactory to the Company.
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The Holder agrees to indemnify and hold harmless the Company, or Assignee
against any loss, damage, claim or liability arising from the disposition of
this Warrant or any Exercise Share held by such Holder or any interest therein
in violation of the provisions of this Paragraph 9.
(b) Restrictive Legends. Unless and until otherwise permitted by this
Paragraph 9 this Warrant Certificate, each Warrant Certificate issued to the
Holder or to any transferee or assignee of this Warrant Certificate, and each
stock certificate representing Exercise Shares issued upon exercise of this
Warrant or to any transferee of the person to whom the Exercise Shares were
issued, shall bear a legend setting forth the requirements of Subparagraph (a)
of this Paragraph 9, together with such other legend or legends as may otherwise
be deemed necessary or appropriate by counsel to the Company.
(c) Notice of Proposed Transfers. In addition to the provisions of Section
6 hereof, prior to any transfer, offer to transfer or attempted transfer of this
Warrant or any Exercise Share, the Holder of such security shall give written
notice to the Company of such Holder's intention to effect such transfer. Each
such notice shall (x) describe the manner and circumstances of the proposed
transfer in sufficient detail, and shall contain an undertaking by the person
giving such notice to furnish such other information as may be required, to
enable counsel to render the opinions referred to below, and shall (y) designate
the counsel for the person giving such notice, such counsel to be satisfactory
to the Company. The person giving such notice shall submit a copy thereof to the
counsel designated in such notice and the Company shall submit a copy thereof to
its counsel, and the following provisions shall apply:
(i) If, in the opinion of each such counsel, the proposed transfer
of this Warrant or Exercise Shares, as appropriate, may be effected without
registration of such security under the 1933 Act, the Company shall, as promptly
as practicable, so notify the Holder of such security and such Holder shall
thereupon be entitled to transfer such security in accordance with the terms of
the notice delivered by such Holder to the Company. Each certificate evidencing
the securities thus to be transferred (and each certificate evidencing any
untransferred balance of the securities evidenced by such certificate) shall
bear the restrictive legends referred to in Subparagraph (b) above, unless in
the opinion of such counsel such legend is not required in order to insure
compliance with the 1933 Act.
(ii) If, in the opinion of either of such counsel, the proposed
transfer of securities may not be effected without registration under the 1933
Act, the Company shall, as promptly as practicable, so notify the Holder
thereof. However, the Company shall have no obligation to register such
securities under the 1933 Act, except as otherwise provided herein or in the
Agreement of Sale.
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The Holder of the securities giving the notice under this Subparagraph (c)
shall not be entitled to transfer any of the securities until receipt of notice
from the Company under Paragraph (i) of this Subparagraph (c) or registration of
such securities under the 1933 Act has become effective.
(d) Removal of Legend. The Company shall, at the request of any registered
Holder of a Warrant or Exercise Share, exchange the certificate representing
such security for a certificate representing the same security not bearing the
restrictive legend required by Subparagraph (b) if, in the opinion of counsel to
the Company, such restrictive legend is no longer necessary.
10. Registration Rights. The Holder hereof shall be entitled to the registration
rights set forth in a certain Registration Rights Agreement of even date
herewith by and between the Company and such Holder.
11. Notices. All notices or other communications under this Warrant Certificate
shall be in writing and shall be deemed to have been given if delivered by hand
or mailed by certified mail, postage prepaid, return receipt request, addressed
as follows:
If to the Company:
Tel-Save Holdings, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇. Lawn, IV, Esquire
General Counsel and Secretary
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
and to the Holder:
at the address of the Holder appearing on the books of the company
or the Company's transfer agent, if any.
Either of the Company or the Holder may from time to time change the
address to which notices to it are to be mailed hereunder by notice in
accordance with the provisions of this Paragraph 11.
12. Supplements and Amendments. The Company may from time to time supplement or
amend this Warrant Certificate without the approval of any Holders of Warrants
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be
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defective or inconsistent with any other provision, or to make any other
provisions in regard to matters or questions herein arising hereunder which the
Company may deem necessary or desirable and which shall not materially adversely
affect the interests of the Holder.
13. Successors and Assigns. This Warrant shall inure to the benefit of and be
binding on the respective successors, assigns and legal representatives of the
Holder and the Company. The Company may assign (the "Assignment") its rights to
deliver the Exercise Shares pursuant to this Warrant to one or more stockholders
of the Company ("Assignee") who would agree to sell the Exercise Shares to the
Holder upon exercise hereof and to otherwise assume with respect to the delivery
of the Exercise Shares only, all obligations of the Company, with respect to the
delivery of the Exercise Shares only, under this Warrant. In addition, the
Company may assign to another party its right, under the Right of First Refusal.
14. Severability. If for any reason any provision, paragraph or terms of this
Warrant Certificate is held to be invalid or unenforceable, all other valid
provisions herein shall remain in full force and effect and all terms,
provisions and paragraphs of this Warrant shall be deemed to be severable.
15. Governing Law. This Warrant shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of said State.
16. Headings. Paragraph and subparagraph headings, used herein are included
herein for convenience of reference only shall not affect the construction of
this Warrant Certificate nor constitute a part of this Warrant Certificate for
any other purpose.
17. Consent and Acknowledgment of Holder. The terms and conditions of this
Warrant are agreed and consented to by the Holder, as evidenced by Holder's
signature on the line provided below. This Warrant shall bind, benefit and be
enforceable by or against Holder and its heirs, legal and personal
representatives, estate, beneficiaries and assigns, and the Company, Assignee
and its successors and assigns.
IN WITNESS WHEREOF, the Company has caused these presents to be duly executed as
of the day and year written above.
TEL-SAVE HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Chief Executive Officer
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The terms of this Warrant are
agreed to and accepted by:
HOLDER
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Signature:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Print Name
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APPENDIX A
NOTICE OF WARRANT EXERCISE
Pursuant to a Warrant Agreement, ("Warrant") by and between the
undersigned and Tel-Save Holdings, Inc., a Delaware corporation (the "Company"),
dated as of January __, 1996, and subject to the vesting periods set forth
therein, the undersigned hereby irrevocably elects to exercise its warrant to
the extent of purchasing ______ shares of Common Stock (the "Warrant Shares"),
of the Company as provided for therein.
The undersigned hereby represents and agrees that the Warrant Shares
purchased pursuant hereto are being purchased for investment and not with a view
to the distribution or resale thereof, and that the undersigned understands that
said Warrant Shares have not been registered under the Securities Act of 1933,
as amended.
The undersigned, on behalf of itself, its past and present subsidiaries,
successors, assigns and any assignee of Holder and its and their officers,
directors, employees, agents, creditors, trustees, agents and successors
(collectively "Holder Releasors"), does hereby release, acquit and forever
discharge Company, "Assignee" (as defined in the Warrant) and any assignor of
the Warrant (i.e., previous Holder) and the Company's past and present
subsidiaries, affiliates, stockholders, successors, assigns, customers,
investment bankers, agents and its and their officers, directors, employees,
customers, agents, attorneys, and their estates, assigns and successors
(collectively "Company Releasees"), from any and all claims, actions, causes of
action, suits, demands, rights, damages, costs, loss of service, service,
expenses, or compensation of any sort whatsoever, known or unknown, foreseen or
unforeseen, which Holder Releasors ever had, now have or hereafter can, shall or
may have against Company Releasees, by reason of any matter, cause, event,
action, or inaction or thing from whatsoever from the beginning of time to the
date of this Notice.
Payment of the full Exercise Price (as defined in the Warrant) of the
Warrant Shares is enclosed herewith, in the form of a check made payable to the
Company or Assignee, as the case may be.
The undersigned requests that a certificate for the Warrant Shares be
issued in the name of:
________________________________________________
________________________________________________
________________________________________________
(Please print name, address and social security numbers)
Dated: ________________________________________________
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Address: ________________________________________________
________________________________________________
________________________________________________
Signature: ________________________________________________
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