WARRANT AMENDMENT AGREEMENT
Exhibit 10.18
This
Warrant Amendment Agreement (the “Agreement”)
is
made and entered into as of January 15, 2007 (the “Effective
Date”),
by
and between Data
Call Technologies, Inc.,
a
Nevada corporation (“Data
Call”)
and
Xxxxxxx
Xxx,
the Vice
President of Sales for Data Call (“Xxx”),
each
individually a “Party”
and
collectively the “Parties.”
W I T N E S S E T H:
WHEREAS,
Data
Call previously granted Xxx certain warrants effective June 1, 2006, in
connection with Xxx’x entry into an Executive Employment Agreement with Data
Call, which Warrant Agreement is attached hereto as Exhibit
A
(the
“Warrant”), which Warrant contained provisions whereby the transfer of the
Warrant was prohibited by Xxx;
WHEREAS,
certain
events have occurred which require that the Warrant be transferable by Xxx,
and
the Parties now desire to amend the terms of the Warrant to allow for such
transfer.
NOW,
THEREFORE,
in
consideration for the promises and pledges contained below and other good and
valuable consideration, which consideration Data Call and Xxx acknowledge
receipt of, and the premises and the mutual covenants, agreements, and
considerations herein contained, the Parties hereto agree as
follows:
1. Amendment
of the Warrant.
(a)
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The
Parties hereby amend and replace Section 2(a) of the Warrant with
the
following language:
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“Transferability
of Warrant.
You
agree that the Warrant is being acquired as an investment and not with a view
to
distribution thereof and that the Warrant may not be transferred, sold, assigned
or hypothecated except as provided herein. You further acknowledge that the
Warrant may not be transferred, sold, assigned or hypothecated unless pursuant
to a registration statement that has become effective under the Securities
Act
of 1933, as amended (the “Act”), setting forth the terms of such offering and
other pertinent data with respect thereto, or unless you have provided the
Company with an acceptable opinion from acceptable counsel that such
registration is not required. Certificates representing the Warrant shall bear
an appropriate legend. Notwithstanding the foregoing, any request to transfer
the Warrant must be accompanied by the Form of Assignment and Transfer attached
hereto as Schedule 5 executed by the Warrant Holder.”
[Remainder
of page left intentionally blank.]
(b)
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The
Parties also hereby amend the Warrant to amend and replace Schedules
1-3,
with Schedule 1 attached hereto,, to rename Schedule 4 as previously
attached to the Warrant as Schedule 2, as attached hereto, and to
include
a Schedule 3, “Form of Assignment and Transfer” as set forth hereto as
Exhibit
B
(the “Schedules”).
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(c)
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The Parties also hereby amend and replace Section 3 of the Warrant
with
the following language:
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3. Vesting
of Warrant.
(a)
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The
aggregate of 500,000 Warrants granted to Holder pursuant to this
Warrant
shall vest immediately on January 15, 2007, the “Vesting Date,” , which
Warrants are to be evidenced by Schedule 1, attached
hereto.”
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(d)
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The Parties hereby amend and replace Section 4(d) of the Warrant
in its
entirety, with the following revised Section
4(d):
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(d)
Payment
of Purchase Price.
The
Purchase Price may be made by any of the following or a combination thereof,
at
the election of the Warrant Holder:
(i) In
cash; by wire transfer; by certified or cashier’s check, or money order;
or
(ii) By
delivery to the Company of an exercise notice that requests the Company to
issue
to the Warrant Holder the full number of shares as to
which the Warrant is then exercisable, less the number of shares that
have an aggregate Fair Market Value, as determined by the Board in its
sole discretion at the time of exercise, equal to the aggregate
purchase price of the shares to which such exercise relates. (This method
of exercise allows the Warrant Holder to use a portion of the shares issuable
at
the time of exercise as payment for the shares to which the Warrant relates
and is often referred to as a "cashless exercise." For example, if the Warrant
Holder elects to exercise 1,000 shares at an exercise price of $0.25 and the
current Fair Market Value of the shares on the date of exercise is $1.00,
the Warrant Holder can use 250 of the 1,000 shares at $1.00 per share to
pay for the exercise of the entire Warrant (250 x $1.00 = $250.00) and
receive only the remaining 750 shares).
For
purposes of this section, "Fair Market Value” shall be defined as the average
closing price of the Common Stock (if actual sales price information on any
trading day is not available, the closing bid price shall be used) for the
five
trading days prior to the date of exercise of this Warrant (the “Average Closing
Bid Price”), as reported by the National Association of Securities Dealers
Automated Quotation System (“NASDAQ”), or if the Common Stock is not traded on
NASDAQ, the Average Closing Bid Price in the over-the-counter market; provided,
however, that if the Common Stock is listed on a stock exchange, the Fair Market
Value shall be the Average Closing Bid Price on such exchange; and, provided
further, that if the Common Stock is not quoted or listed by any organization,
the fair value of the Common Stock, as determined by the Board of Directors
of
the Company, whose determination shall be conclusive, shall be used). In
no event shall the Fair Market Value of any share of Common Stock be less than
its par value.”
2. Miscellaneous.
(a)
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Assignment.
All of the terms, provisions and conditions of this Agreement shall be
binding upon and shall inure to the benefit of and be enforceable
by the
Parties hereto and their respective successors and permitted assigns.
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(b)
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Applicable
Law.
This Agreement shall be construed in accordance with and governed
by the
laws of the State of New York, excluding any provision of this Agreement
which would require the use of the laws of any other
jurisdiction.
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(c)
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Entire
Agreement, Amendments and Waivers.
This Agreement constitutes the entire agreement of the Parties hereto
and
expressly supersedes all prior and contemporaneous understandings
and
commitments, whether written or oral, with respect to the subject
matter
hereof, other than the Prior Waivers and First Amendment, which shall
remain in effect and be fully enforceable against the Parties. No
variations, modifications, changes or extensions of this Agreement
or any
other terms hereof shall be binding upon any Party hereto unless
set forth
in a document duly executed by such Party or an authorized agent
or such
Party.
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(d)
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Waiver.
No
failure on the part of any Party to enforce any provisions of this
Agreement will act as a waiver of the right to enforce that
provision.
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(e)
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Section
Headings.
Section headings are for convenience only and shall not define or
limit
the provisions of this Agreement.
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(f)
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Effect
of Facsimile and Photocopied Signatures.
This Agreement may be executed in several counterparts, each of which
is
an original. It shall not be necessary in making proof of this Agreement
or any counterpart hereof to produce or account for any of the other
counterparts. A copy of this Agreement signed by one Party and faxed
to
another Party shall be deemed to have been executed and delivered
by the
signing Party as though an original. A photocopy of this Agreement
shall
be effective as an original for all
purposes.
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of page left intentionally blank. Signature page follows.]
This
Warrant Amendment Agreement has been executed by the Parties on the date first
written above, with an Effective Date as provided above.
Data
Call Technologies, Inc.
/s/
Xxxxx Xxxxxx
Xxxxx
Xxxxxx
Chief
Executive Officer
/s/
Xxxxxxx Xxx
Xxxxxxx
Xxx
SCHEDULE 1
WARRANT
THIS
WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN
RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN SECTIONS 3 AND 4
OF
SUCH ACT AND REGULATION S PROMULGATED THEREUNDER; OR (B) ANY STATE SECURITIES
LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THIS WARRANT MAY NOT
BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE ACT
OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THIS WARRANT MUST BE ACQUIRED
FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE WARRANT
NOR
THE UNDERLYING STOCK MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS
OF REGULATION S AND OTHER LAWS OR PURSUANT TO REGISTRATION UNDER THE ACT OR
AN
AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
To
Purchase 500,000 Shares
of
Common
Stock
DATA
CALL TECHNOLOGIES, INC.
This
certifies that, for value received, the hereafter named registered owner is
entitled, subject to the terms and conditions of this Warrant, until the
expiration date, to purchase the number of shares (the “Shares”) set forth above
of the common stock (“Common Stock”), of DATA CALL TECHNOLOGIES, INC. (the
“Company”) from the Company at the purchase price per share hereafter set forth
below, on delivery of this Warrant to the Company with the exercise form duly
executed and payment of the purchase price (in cash or by certified or bank
cashier’s check payable to the order of the Company) for each Share purchased.
This Warrant is subject to the terms of the Warrant Agreement between the
parties thereto dated as of June 1, 2006, and amended as of January 15, 2007,
the terms of which are hereby incorporated herein. Reference is hereby made
to
such Warrant Agreement for a further statement of the rights of the holder
of
this Warrant, including, but not limited to the vesting dates of this Warrant
described in Section 3 of the Warrant Agreement and the expiration dates of
this
Warrant as described in Section 4 of the Warrant Agreement.
Registered
Owner: Xxxxxxx
Xxx Date:
January
15, 2007
Purchase
Price
Per
Share: US
$0.10
Expiration
Date: Subject
to Section 4(a) of the Warrant Agreement, January 15, 2010, 5:00 p.m. Central
Standard Time.
WITNESS
the signature of the Company’s authorized officer:
DATA
CALL TECHNOLOGIES, INC.
By
/s/
Xxxxx Xxxxxx
Xxxxx
Xxxxxx, Chief Executive Officer
Exhibit
B
SCHEDULE
2
FORM
OF SUBSCRIPTION
(To
be
signed only upon exercise of Warrant)
To
DATA
CALL TECHNOLOGIES, INC.:
The
undersigned, the holder of the enclosed Warrant, hereby irrevocably elects
to
exercise the purchase right represented by such Warrant for, and to purchase
thereunder,___________ *
shares
of Common Stock of DATA CALL TECHNOLOGIES, INC. and herewith makes payment
of US
$_______________ therefore, and requests that the certificate or certificates
for such shares be issued in the name of and delivered to the
undersigned.
The
undersigned hereby certifies that the undersigned is not a U.S. person and
the
warrant is not being exercised on behalf of a U.S. person, or, if applicable,
the undersigned has attached an opinion of counsel to the effect that the
warrant and the securities to be delivered upon exercise thereof have been
registered under the Securities Act of 1933, as amended or are exempt from
registration thereunder.
Dated:______________
____________________________________________
(Signature
must conform in all respects to name of holder
as
specified on the face of the enclosed Warrant)
____________________________________________
(Address)
___________________________
(*)
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Insert
here the number of shares called for on the face of the Warrant or,
in the
case of a partial exercise, the portion thereof as to which the Warrant
is
being exercised, in either case without making any adjustment for
additional Common Stock or any other stock or other securities or
property
which, pursuant to the adjustment provisions of the Warrant Agreement
pursuant to which the Warrant was granted, may be delivered upon
exercise.
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Exhibit
B
SCHEDULE 3
FORM
OF ASSIGNMENT AND TRANSFER
For
value
received, the undersigned hereby sells, assigns and transfers unto
__________________________________ the right represented by the enclosed Warrant
to purchase _________________ shares of Common Stock of
DATA
CALL
TECHNOLOGIES, INC. to which the enclosed Warrant relates, and
appoints _____________Attorney
to transfer such right on the books of DATA CALL TECHNOLOGIES, INC. with full
power of substitution in the premises.
The
undersigned represents and warrants that the transfer of the enclosed Warrant
is
permitted by the terms of the Warrant Agreement pursuant to which the enclosed
Warrant has been issued, and the transferee hereof, by his, her or its
acceptance of this Agreement, represents and warrants that he, she or it is
familiar with the terms of said Warrant Agreement (including but not limited
to
the vesting provisions provided in Section 3 thereof) and agrees to be bound
by
the terms thereof with the same force and effect as if a signatory
thereto.
Dated:______________
__________________________________________
(Signature
must conform in all respects to name of holder
as
specified on the face of the enclosed Warrant)
____________________________________________
(Address)
Signed
in
the presence of:
____________________________________