Exhibit 10.6
WARRANT TO PURCHASE SHARES
OF COMMON STOCK OF
GENERAL AMERICAN ROYALTY, INC. D.B.A. WORLD CALLNET, INC.
NO. _____
Warrant to Purchase
VOID AFTER 5:00 P.M., CENTRAL TIME
March 26, 2001
FOR VALUE RECEIVED, General American Royalty, Inc. d.b.a. World
CallNet, Inc., a corporation organized under the laws of Delaware (the
"Company"), promises to issue in the name of, and sell and deliver to Xxx Xxxxx,
Xx. , P.O. Box 18496, Oklahoma City, Oklahoma 73154-0496 (the "Holder"), a
certificate or certificates for an aggregate of 100,000 shares ("Shares") of
common stock of the Company ("Common Stock"), at any time on or after April 26,
1999, and prior to 5:00 P.M., Central Time on March 26, 2001 (the "Expiration
Date"), upon payment therefor of $5.00 per Share in lawful funds of the United
States of America, such amount (the "Basic Exercise Price") being subject to
adjustment in the circumstances set forth hereinbelow. This applicable Basic
Exercise Price, until such adjustment is made and thereafter as adjusted from
time to time, is called the "Exercise Price."
THIS WARRANT MAY NOT BE ASSIGNED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED, OR OTHERWISE ENCUMBERED OR OTHERWISE DISPOSED OF (EXCEPT FOR
ASSIGNMENT TO AFFILIATES OF HOLDER), IT MAY NOT BE ASSIGNED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISPOSED OF BY THE HOLDER,
EXCEPT BY THE HOLDER'S EXERCISE HEREOF AS SET FORTH HEREIN FOLLOWING DUE
REGISTRATION UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS, OR IN TWO
TRANSACTIONS EXEMPT FROM SUCH REGISTRATION.
1. Exercise of Warrant. In case the Holder of this Warrant shall desire
to exercise this Warrant in whole or in part, the Holder shall surrender this
Warrant, with the form of exercise notice on the last page hereof duly executed
by the Holder, to the Company accompanied by payment of the Exercise Price of
$5.00 per Share, subject to adjustment as noted herein.
This Warrant may be exercised in whole or in part but not for
fractional Shares. In case of the exercise in part only, the Company will
deliver to the Holder a new Warrant of like tenor In the name of the Holder
evidencing the right to purchase the number of Shares as to which this Warrant
has not been exercised. This Warrant, at any time prior to the exercise hereof,
upon presentation and surrender to the Company may be exchanged, along or with
other Warrants of like tenor registered in the name of the same Holder, for
another Warrant or other Warrants of like tenor in the name of such Holder
exercisable for the same aggregate number of Shares as the Warrant or Warrants
surrendered.
2. Registration Rights. Upon written notice of purchasers holding the
right to acquire 51% or more of the shares underlying the Warrants, the Company
agrees to register, at the
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Company's expense the Shares under the Securities Act and applicable state
securities laws. Also, in the event the Company files a registration for the
registration or sale of any Shares with the United States Securities and
Exchange Commission or under the laws of any State, the Company agrees, at the
Company's expense to register this Warrant and the underlying shares.
3. Stock Dividends a Reclassification Reorganizations Anti-Dilution
Provisions. This Warrant is subject to the following further provisions:
a. In case, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall issue any shares of its
Common Stock as a stock dividend or subdivide the number of outstanding
shares of Common Stock into a greater number of shares, then in such
case, the number of shares of Common Stock issuable upon conversion of
the Shares underlying this Warrant shall be proportionately increased
and conversely, in the event the Company shall contract the number of
outstanding shares of Common Stock by combining such shares of Common
Stock into a smaller number of shares of Common Stock then, in such
case the number of shares of Common Stock issuable upon conversion of
the Shares underlying this Warrant shall be proportionately decreased.
If the Company shall, at any time during the life of this Warrant,
declare a dividend payable in cash on its Common Stock and shall at
substantially the some time offer to its stockholders generally a right
to purchase new shares of Common Stock from the proceeds of such
dividend or for an amount substantially equal to the dividend, all
shares of Common stock so issued shall for the purpose of this Warrant.
be deemed to have been issued as a stock dividend. Any dividend paid or
distributed upon the Common stock in shares of any other class of
securities convertible into shares of Common Stock or any other
securities shall be treated as a dividend paid in Common Stock to the
extent that shares of Common Stock are issuable upon the conversion
thereof.
b. In case, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall be recapitalized by
reclassifying its outstanding Common Stock into shares with a different
par value or shall thereafter reclassify any such shares in a like
manner, or the Company or a successor corporation shall consolidate, or
merge with or convey all or substantially all of its, or all or
substantially all of any successor corporation's property and assets to
any other corporation or corporations (any such corporation being
included within the meaning of the term 01 successor corporation"
hereinbefore used in the event of any consolidation or merger of any
such corporation with, or the sale of all or substantially all of the
property of any such corporation to another corporation or
corporations), the Holder shall thereafter have the right to purchase,
pursuant to and under the terms and conditions and during the time
specified in this Warrant, in lieu of the shares of Common Stock
issuable upon conversion of the Shares underlying this Warrant and that
are purchasable upon the exercise of this Warrant, such shares of
Common Stock, securities or assets as may be issued upon conversion of
the Shares theretofore underlying this Warrant, upon the exercise of
this Warrant had such recapitalization, consolidation, merger or
conveyance not taken place; and, in any such event, the rights of the
Holder to an adjustment in the number of shares of Common Stock
underlying the Shares underlying this Warrant and that purchasable upon
the
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exercise of this Warrant as herein provided, shall continue and be
preserved in respect to any shares, securities or assets which the
Holder of this Warrant becomes entitled to purchase.
c. Upon the occurrence of each event requiring an adjustment
of the Exercise Price or of the number of shares of Common Stock
issuable upon conversion of the Shares underlying this Warrant that are
purchasable pursuant to this Warrant in accordance with, and as
required by, the terms of Subsection (a) of this Section 3, the Company
shall use its best efforts to forthwith cause either a firm of
independent certified public accountants (who may be the regular
accountants for the Company) or the Chief Financial Officer of the
Company to compute the adjusted Exercise Price or the adjusted number
of shares of Common Stock issuable upon conversion of the Shares
issuable upon exercise of this Warrant by reason of such event in
accordance with the provisions of Subsection (a) or (b). The Company
shall forthwith mail to do Holder of this Warrant a copy of such
computation, which shall be conclusive and shall be binding upon such
Holder unless contested by such Holder by written notice to the Company
within 14 days after the mailing thereof by the Company.
d. In case.
(1) the Company shall make a record of the holders of
its Common Stock for the purpose of entitling them to receive,
a dividend payable (whether payable in cash, securities,
property or in any other form); or
(2) the Company shall make a record of the holders of
its Common Stock for the purpose of entitling them to
subscribe for or purchase any shares of any class or to
receive any other rights; or
(3) the Company shall set a date for any
reclassification other reorganization of the capital stock of
the Company, consolidation or merger of the Company with or
into another corporation, or conveyance of all or
substantially all of the assets of the Company, or
(4) the Company shall set a date for the voluntary or
involuntary dissolution, liquidation or winding upon of the
Company:
then, in any such case, the Company shall mail to the Holder of this
Warrant at least 30 days prior to such record date or the date set for
any actions described In subparagraphs (d)(1) through (d)(3) above, a
notice advising such Holder of the date or expected date on which a
record is to be taken for the purpose of such dividend, distribution of
rights or the date on which such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding
up is to take place, as the case may be. Such notice shall also specify
the date or expected date, if any is to be fixed, as of which holders
of Common Stock of record shall be entitled to participate in said
dividend, distribution of rights, or shall be entitled to exchange
their shares of Common Stock for securities or other property
deliverable upon such reclassification, reorganization, consolidation,
merger, conveyance dissolution, liquidation or winding up, as the case
nay be. Each such written notice shall be given by
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certified mail, postage prepaid, return receipt requested, addressed to
the holder of the Warrant at the address of such holder as shown on the
books of the Company.
e. In case the Company, at any time while this Warrant shall
remain valid and unexercised, shall sell more than one-half of its
property, or dissolve, liquidate or wind up its affairs or sell or
dispose of all or any part of the assets, securities or property of any
wholly-owned subsidiary, the Holder of this Warrant shall thereafter be
entitled to receive upon exercise hereof (in lieu of such shares of
Common Stock underlying the Shares underlying this Warrant) and the
same kind and amount of any securities or assets a may be issuable,
distributable or payable upon any such sole, dissolution, liquidation
or winding up with respect to such number of shares of Common Stock of
the Company as would otherwise have been issuable upon conversion of
the Shares underlying this Warrant. The Company shall mail notice
thereof by registered mail to the Holder and shall make no distribution
to the shareholders of the Company until the expiration of thirty (30)
days from the date of such mailing: provided, however, that in any such
event if the Holder shall not exercise this Warrant within thirty (30)
days from the date of mailing such notice, all rights herein granted
not so exercised within such thirty (30) day period shall thereafter
become null and void. The Company shall not, however, be prevented from
consummating any such sale without awaiting the expiration of such
thirty (30) day period, it being the intent and purposes hereof to
enable the Holder upon exercise of this Warrant to participate in the
distribution of the consideration to be received by the Company upon
any such sale or in the distribution of assets upon any dissolution or
liquidation of the Company.
f. In the event the Company, at any time while this Warrant
shall remain valid and unexercised, shall propose to declare any
partial liquidating dividend, it shall notify the Holder of this
Warrant as set forth in Subsection (d) of this Section 3. The term
"partial liquidating dividend" shall, include a dividend in cash or
other property of an amount that, together with all other dividends in
cash or other property paid or declared and set aside for payment, is
equal to or greater then 40% of the cumulative consolidated net income
of the Company subsequent to one year form the due hereof.
g. The provisions of this Section 3 are for the purpose of,
and shall be to the effect that upon any exercise of this Warrant the
Holder shall be entitled to receive the same amount and, kind of
securities and other property that it would have been entitled to
receive as the owner at all times subsequent to the date hereof of to
number of shares of Common Stock issuable upon conversion of the Shares
purchased upon any such exercise.
4. Covenants of the Company. The Company hereby covenants and agrees
that prior to the expiration of this Warrant by exercise or by its terms:
a. The Company will not by amendment of its Articles of
Incorporation, as they may currently exist, or through reorganization,
consolidation, merger, dissolution, or see of assets, or by any other
voluntary act or deed, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be
observed or performed hereunder by the Company, but will at all times
in good faith assist, insofar as it is able, in the
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carrying out of all provisions of this Warrant and in the taking of all
other actions that may be necessary in order to protect the rights of
the Holder against dilution.
b. if at any time or from time to time, the Company shall, by
subdivision, consolidation or reclassification of shares, or otherwise,
change as a whole the outstanding shares of Common Stock into a
different number or class of shares, the number and class of shares as
so changed shall, for the purpose of each Warrant and the terms and
conditions hereof, replace the shares outstanding immediately prior to
such change, and the Warrant purchase price in effect, and the number
of Shares purchasable under each Warrant, immediately prior to the date
on which such change is to become effective, shall be proportionately
adjusted.
c. Irrespective of any adjustment or change in the Warrant
purchase price, the number of shares of Common Stock issuable upon
conversion of the Shares actually purchasable under each Warrant of
like tenor, the Warrants theretofore and thereafter issued may continue
to express the Warrant purchase price per Share and the number of
Shares purchasable thereunder as the Warrant purchase price per Share
and the number of Shares purchasable were expressed on the Warrants
when initially issued.
d. If at any time while any Warrant is outstanding the Company
consolidates with or merges into another corporation, firm or entity,
or otherwise enters into a form of business combination, the Holder,
upon exercise hereof, shall be entitled to purchase, with respect to
each share of Common Stock issuable upon conversion of Shares
purchasable hereunder, that number of Shares to which a holder of one
(1) share of Common Stock would have been entitled upon the occurrence
of such business combination without any change in, or payment in
addition to, the Warrant purchase price in effect immediately prior to
such merger or consolidation, and the Company shall take such steps in
connection with such consolidation or merger as may be necessary to
assure that all the provisions of each Warrant shall thereafter be
applicable, as nearly as reasonably may be, in relation to any
securities or property thereafter deliverable upon the exercise of each
Warrant. The Company shall not effect any such consolidation, merger or
other form of business combination unless, prior to the consummation
thereof, the successor corporation (if other than the Company)
resulting therefrom shall assume, by written instrument executed and
mailed to the registered holder of each Warrant at the address of such
holder shown on the books of the Company, the obligation to deliver to
such holder such securities, or property such holder shall be entitled
to purchase in accordance with the foregoing provisions.
e. Upon the happening of any event requiring an adjustment of
the Warrant purchase price hereunder, the Company shall forthwith give
written notice thereof to the registered Holder of each Warrant,
stating the adjusted Warrant purchase price and the adjusted number of
shares of Common Stock issuable upon conversion of shares purchasable
upon the exercise thereof resulting from such event, and setting forth
in reasonable detail the method of calculation. The certificate of
either the Company's independent certified public accountants or Chief
Financial Officer shall be conclusive evidence of the correctness of
any computation made hereunder unless contested by a Holder by written
notice to the Company within 14 days after the mailing thereof by the
Company. Notice pursuant to this paragraph
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shall be given by certified mail, postage prepaid, return receipt
requested, addressed to the registered holder of each Warrant at the
address of such holder appearing in the records of the Company.
f. The Company shall at all times reserve and keep available,
out of its authorized and unissued capital stock, solely for the
purpose of providing for the exercise, forthwith upon the request of
the Holder of the Warrant(s) then outstanding and in effect, such
numbers of shares of Common Stock as shall, from time to time, be
sufficient for the conversion of Shares upon such exercise of the
Warrants. The Company shall, from time to time, in accordance with the
laws of the State of Delaware, increase the authorized amount of its
capital stock, if at any time the number of shares of Common Stock
remaining unissued and unreserved for other purposes shall not be
sufficient to permit the exercise of do Warrants then outstanding and
in effect.
g. The Company covenants and agrees that all Shares that may
be issued upon the exercise of the rights represented by this Warrant
will, upon issuance be validly issued, fully paid and non-assessable,
and free from all taxes, liens and charges with respect to the issue
thereof (other than taxes in respect of any transfer occurring with
such issue). The Company further covenants and agrees that, during the
period within which the rights represented by this Warrant may be
exercise, the Company will at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the
conversion and exercise of the rights represented by this Warrant.
5. Loss, Theft, Destruction or Mutilation. In case this Warrant shall
become mutilated or defaced or be destroyed, lost or stolen, the Company shall
execute and deliver a new Warrant in exchange for and upon surrender and
cancellation of such mutilated or defaced Warrant or in lieu of and substitution
of such Warrant so destroyed, lost or stolen, upon the Holder of such Warrant
filing the Company such evidence satisfactory to it that such Warrant has been
so mutilated, defaced, destroyed, lost or stolen and of the ownership thereof by
the Holder; provided, however, that the Company shall be entitled, as a
condition to the execution and delivery of such new Warrant, to demand indemnity
satisfactory to it and payment of expenses and charges incurred in connection
with the delivery of such new Warrant, except that no bond shall be required
from the Holder. All Warrants so surrendered to the Company shall be canceled.
6. Record Owner. At the time of the surrender of this Warrant, together
with the form of subscription properly executed and payment of the Exercise
Price, the person exercising this Warrant shall be deemed to be the Holder of
record of the shares of Common Stock deliverable upon such exercise, in whole,
or in part, notwithstanding that the stock transfer of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to such person. The Company will pay all costs with
respect to the issuance of this Warrant or the shares of Common Stock issuable
upon exercise hereof, or thereof
7. Fractional Shares. No fractional Shares, fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon the exercise
of this Warrant or conversion of the Shares. With respect to any fraction of a.
Share called for on such exercise, the Holder may elect to receive, and the
Company shall pay to the Holder, an amount in cash equal to such fraction
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multiplied by the Exercise Price. In the alternative, the Holder may elect to
remit to the company an amount in cash equal to the difference between such
fraction and one, multiplied by the Exercise Price, and the Company will issue
the Holder one share of Common Stock in addition to the number of whole shares
required by the exercise of the Warrant; provided, however, that the Company
shall not be obligated by the operation of this Section 8 to issue Shares in the
aggregate exceeding the number of shares duty registered in accordance with the
applicable federal and state securities laws or as to which an exemption from
registration has been determined to be available.
8. Call-Provision. The Company may call the warrants represented hereby
in the event that prior to the Exercise Date, provided the Company has
registered the underlying Shares, and the average closing price of the
underlying common stock as adjusted herein, on any stock exchange, public
bulletin board or other market place for any twenty market days equals or
exceeds $6.00 per share (US). Such prices may be any combination of such markets
and must not be from only one source. Such call must be exercised by the Company
giving ten days prior written notice of the call to the holder hereof. After
receipt of notice of call, the holder may exercise the warrant as provided
herein up until the expiration of the notice period. The call price shall be
$5.00 per share of underlying shares and shall be tendered to holder upon
expiration of the notice period. After tender of the call price, if the warrant
is not exercised prior thereto, the warrant shall cease to exist.
9. Original Issue Taxes. The Company will pay all United States, state
and local (but not foreign) original issue taxes, if any, upon the issuance of
this Warrant or the Shares deliverable upon exercise hereof or the shares of
Common Stock upon conversion of the Shares.
10. Mailing of notices, etc. All notices, and other communications from
the Company to the Holder of this Warrant shall be mailed by first-class
registered or certified mail, return receipt requested, postage prepaid, to the
Holder, at the address set forth in the records of the Company, or to such other
address furnished to the Company in writing from time to time by the Holder of
this Warrant. All notices from the Holder of this Warrant to the Company shall
be mailed to the Company at General American Royalty, Inc. d.b.a. World CallNet,
Inc., Beacon House Meridian Gate, 000 Xxxxx Xxxx, Xxxxxx, X000XX, Xxxxxx
Xxxxxxx, Attention: Xxxx Xxxxxxx-Xxxxxxx, President.
11. Registration Under the Securities Act of 1933. This Warrant and the
Shares issuable upon exercise of this Warrant have not been registered under the
Securities Act or the securities acts of any state or foreign country by virtue
of the Registration Statement. This Warrant and all replacement Warrants and all
Shares issued upon exercise of the Warrant shall bear the following legend
(unless a current registration statement for such shares is in effect):
This Warrant, and the securities issuable upon the exercise of
this Warrant, have not been registered under the Securities
Act of 1933, as amended ("Securities Act") and may not be
sold, transferred or otherwise disposed of unless (i) the
Shares are registered under the Securities Act of 1933 and the
securities act of any state applicable to such sale, or (ii)
the proposed seller provides the Company with an opinion of
counsel that the securities are being sold in a transaction
which is except from the registration requirements of the
Securities Act of 1933 and any applicable state securities
acts and the Company
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is satisfied that no registration statement is then required
and that this Warrant and the underlying securities may be
sold, transferred or otherwise disposed of in the manner
contemplated without registration under the Securities Act of
1933 or any state securities act.
12. Laws of the of Delaware. This Warrant shall be governed by,
interpreted under and construed in all respects in accordance with the laws of
the State of Delaware, irrespective of the place of domicile or residence of any
party. In the event of a controversy arising out of the interpretation,
construction, performance or breach of this Warrant, the parties hereby agree
and consent to the jurisdiction and venue of any State or Federal court of
competent jurisdiction.
13. Entire Agreement and Modification. The Company and the Holder of
this Warrant hereby represent and warrant that this Warrant is intended to and
does, contain and embody all of the understandings and agreements, both written
and oral, of the parties hereto with respect to the subject matter of this
Warrant, and that there exists no oral, agreement or understanding express or
implied, whereby the absolute, final and unconditional character nature of this
Warrant be in any way invalidated, empowered or affected. A modification or
waiver of any of the terms, conditions or provisions of this Warrant shall be
effective only if made in writing and executed with the same formality as this
Warrant.
This Warrant will become wholly void and of no effect and the rights
evidenced hereby Will terminate unless exercised in accordance with the terms
and provision hereof at or before 5:00 P.M., London Time, on the Expiration
Date.
IN WITNESS WHEREOF, the Company by its duty authorized officer has
executed this Warrant on this 26th day of March, 1999.
Attest: General American Royalty, Inc,
d.b.a World CallNet, Inc
____________________ By:
-------------------------------
Xxxx Xxxxxxx-Xxxxxxx, President
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FORM OF EXERCISE
The undersigned hereby irremovably elects to exercise the purchase
rights represented by this Warrant for, and to purchase thereunder, ___________
Shares of General American Royalty, Inc. d.b.a. World CallNet, Inc., a
corporation, and herewith makes payment of $5.00 per share, or at total of
$__________ therefor, and requests that such Shares be issued to:
---------------------------------
(Print Name)
---------------------------------
(Address)
---------------------------------
(Taxpayer Identification Number)
Dated:
-------------------------- ------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
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