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Exhibit 4.4
REPRESENTATIVE'S WARRANT AGREEMENT (the "Representative's Warrant
Agreement" or "Agreement"), dated as of April __, 1997, between 2CONNECT
EXPRESS, INC. (the "Company"), and STERNE, AGEE & XXXXX, INC. (the
"Representative").
W I T N E S S E T H:
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WHEREAS, the Representative has agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof between the
Company and the Representative, to act as the Representative of the Underwriters
in connection with the Company's proposed public offering (the "Public
Offering") of 850,000 Units ("Units") for $9.25 per Unit, each Unit of which
consists of three (3) shares of the Company's common stock, par value $.01 per
share ("Common Stock"), and one (1) Common Stock Purchase Warrant ("Warrant").
Neither the shares of Common Stock nor the Warrants contained in the Units are
detachable or separately transferable from the Units until one year from the
date of the Effective Date (as hereinafter defined); and
WHEREAS, the Company proposes to issue to the Representative and/or
persons related to the Representative as those persons are defined in Rule 2710
of the NASD Conduct Rules (the "Holder"), 59,500 warrants ("Representative
Warrants") which are immediately exercisable to purchase up to 59,500 Units
("Representative Units") and which expire one year from the date of the final
prospectus associated with the Public Offering. The Common Stock underlying the
Representative Units shall hereinafter be referred to as the "Underlying Common
Stock" and the Warrants underlying the Representative Units shall hereinafter be
referred to as the "Underlying Warrants". Furthermore, the Underlying Common
Stock and the Underlying Warrants shall be hereinafter collectively referred to
as the "Warrant Securities"; and
WHEREAS, the Representative Warrants to be issued pursuant to this
Agreement will be issued on the Closing Date (as such term is defined in the
Underwriting Agreement) by the Company to the Holders in consideration for, and
as part of the compensation in connection with, the Representative acting as
Representative pursuant to the Underwriting Agreement.
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of FIVE DOLLARS AND NINETY-FIVE CENTS ($5.95), the
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. GRANT AND PERIOD.
The Public Offering has been registered under a Registration Statement
on Form SB-2 (File No. 333-15567) ("Registration Statement") and declared
effective by the Securities and Exchange Commission (the "SEC" or "Commission")
on April ___, 1997 (the "Effective Date"). This Agreement, relating to the
purchase of the Representative Warrants, is entered into pursuant to the
Underwriting Agreement between the Company and the Representative, as
representative of the Underwriters, in connection with the Public Offering.
Pursuant to the Representative Warrants, the Holders are hereby granted
the right to purchase from the Company, at any time during the period of time
commencing at 8:30 A.M., New York local time, March __, 1998 (11 months after
the date of issuance of the Representative's Warrants), and expiring at 5:30
P.M., New York local time, on April __, 1998 (12 months after the Effective
Date); provided that, if such date shall fall on a weekend day or federal
holiday, then the next following day which is not a weekend day or federal
holiday (the "Expiration Time"), up to 59,500 Units at an exercise price
(subject to adjustment as provided in Article 7 hereof) of $9.90 per Unit (107%
of the Public Offering price of the Units) ("Exercise Price"). The exercise
price of each Underlying Warrant shall be $3.75 per share of Common Stock
("Underlying Exercise Price"). 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. The
Underlying Warrants are exercisable during the sixty (60) day period commencing
one (1) year following the Effective Date in accordance with the Warrant
Agreement.
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Except as specifically otherwise provided herein, the Underlying Common
Stock and the Underlying Warrants constituting the Warrant Securities shall bear
the same terms and conditions as such securities described under the caption
"Description of Securities" in the Registration Statement, and as designated in
the Company's Articles of Incorporation and any amendments thereto, and the
Underlying Warrants shall be governed by the terms of the Warrant Agreement
executed in connection with the Public Offering (the "Warrant Agreement"),
except as provided herein, and the Holders shall have registration rights under
the Securities Act of 1933, as amended (the "Act"), for the Representative
Warrants, the Underlying Common Stock, the Underlying Warrants, and the shares
of Common Stock underlying the Underlying Warrants, as more fully described in
Section 6 of this Representative's Warrant Agreement. In the event of any
extension of the expiration date or reduction of the exercise price of the
Warrants, the same such changes to the Underlying Warrants shall be
simultaneously effected, except that the Underlying Warrants shall expire no
later than five (5) years from the Effective Date.
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 the
form of Warrant Certificate, 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.
3.1 FULL EXERCISE. The Holder hereof may effect a cash exercise
of the Representative Warrants and the Underlying Warrants by
surrendering the Warrant Certificate, together with a Subscription in
the form of Exhibit "A" attached thereto, duly executed by such Holder
to the Company, at any time prior to the Expiration Time, at the
Company's principal office, accompanied by payment in cash or by
certified or official bank check payable to the order of the Company or
wire transfer in the amount of the aggregate purchase price which shall
be equal to the Exercise Price multiplied by the number of
Representative Warrants (as adjusted as hereinafter provided) (the
"Aggregate Price"), subject to any adjustments provided for in Section
7 of this Agreement.
3.2 PARTIAL EXERCISE. The securities referred to in paragraph
3.1 above also may be exercised from time to time in part by
surrendering the Warrant Certificate in the manner specified in Section
3.1 hereof, except that the Exercise Price payable shall be equal to
the number of securities being purchased hereunder multiplied by the
per security Exercise Price, subject to any adjustments provided for in
this Agreement. Upon any such partial exercise, the Company, at its
expense, will forthwith issue to the Holder hereof a new Warrant
Certificate for Representative Warrants of like tenor calling in the
aggregate for the number of securities (as constituted as of the date
hereof) for which the Warrant Certificate shall not have been
exercised, issued in the name of the Holder hereof or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may
direct.
4. ISSUANCE OF CERTIFICATES.
Upon the exercise of the Representative Warrants and/or the Underlying
Warrants, the issuance of certificates for the Warrant Securities and/or other
securities shall be made forthwith (and in any event within three (3) business
days thereafter) without charge to the Holder thereof including, without
limitation, any stock transfer or similar tax which may be payable in respect of
the issuance thereof, and such certificates shall (subject to the provisions of
Sections 5 and 6 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.
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The Warrant Certificates and the certificates representing the Warrant
Securities and/or other securities shall be executed on behalf of the Company by
the manual or facsimile signature of the then present Chairman or Vice Chairman
of the Board of Directors or President or Vice President of the Company under
its corporate seal reproduced thereon, and attested to by the manual or
facsimile signature of the then present Secretary or Assistant Secretary 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 acceptance thereof, covenants
and agrees that the Representative Warrants, and in the event of the exercise
thereof, the Representative Unit, may not be sold, transferred, assigned,
pledged, hypothecated or otherwise disposed of, in whole or in part, for a
period of one (1) year from the Effective Date, except (a) to officers of the
Representative or to officers and partners of the other Underwriters or Selected
Dealers participating in the Public Offering; (b) by will; or (c) by operation
of law.
6. LIQUIDITY RIGHTS.
6.1 EFFECTIVENESS OF REGISTRATION STATEMENT.
For a period of fourteen (14) months commencing on the Effective Date,
the Company shall, at its own expense, file such post-effective amendments to
the Registration Statement as may be required in order to ensure the existence
of a current prospectus with respect to the issuance and resale of the Common
Stock issuable upon the exercise of the Representative Warrants and the
Underlying Warrants, subject, however, to the regulation policies of the
Commission and the staff thereof, and shall, at the Company's own expense,
maintain the State Securities or Blue Sky Law registrations and qualifications
or exemptions therefrom with respect to the Common Stock issued pursuant to the
exercise of the Representative Warrants and the Underlying Warrants for such
period.
6.2 REGISTRATION RIGHTS.
(a) If, at any time during the seven-year period commencing on the
Effective Date, the Company shall file a registration statement (other than on
Form S-4, Form S-8 or any successor form) with the Securities and Exchange
Commission (the "Commission") while any Registrable Securities (as hereinafter
defined) are outstanding, the Company shall give all the then holders of any
Registrable Securities (the "Eligible Holders") at least 45 days prior written
notice of the filing of such registration statement. If requested by any
Eligible Holder in writing within 30 days after receipt of any such notice, the
Company shall, at the Company's sole expense (other than the fees and
disbursements of counsel for the Eligible Holders and the underwriting
discounts, if any, payable in respect of the Registrable Securities sold by any
Eligible Holder), register or qualify all or, at each Eligible Holder's option,
any portion of the Registrable Securities of any Eligible Holders who shall have
made such request, concurrently with the registration of such other securities,
all to the extent requisite to permit the public offering and sale of the
Registrable Securities, and will use its best efforts through its officers,
directors, auditors, and counsel to cause such registration statement to become
effective as promptly as practicable. Notwithstanding the foregoing, if the
managing underwriter of any such offering shall advise the Company in writing
that, in its opinion, the distribution of all or a portion of the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely affect the
distribution of such securities by the Company for its own account, then any
Eligible Holder who shall have requested registration of his, her, or its
Registrable Securities shall delay the offering and sale of such Registrable
Securities (or the portions thereof so designated by such managing underwriter)
for such period, not to exceed 90 days (the "Delay Period"), as the managing
underwriter shall request, provided that no such delay shall be required as to
any Registrable Securities if any securities of the Company are included in such
registration statement and eligible for sale during the Delay Period for the
account of any person other than the Company and any Eligible Holder unless the
securities included in such registration statement and eligible for sale during
the Delay Period for such other person shall have been reduced pro rata to the
reduction of the Registrable Securities which were requested to be included and
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eligible for sale during the Delay Period in such registration. As used herein,
"Registrable Securities" shall mean the Underlying Common Stock and all shares
of Common Stock into which the Underlying Warrants are exercisable which, in
each case, have not been previously sold pursuant to a registration statement or
Rule 144 promulgated under the Securities Act.
(b) If, on any one occasion during the five-year period commencing on
the Effective Date, the Company shall receive a written request from Eligible
Holders who in the aggregate own (or upon exercise of all Warrants or Warrants
then outstanding would own) a majority of the total number of shares of Common
Stock then included (or upon such exercises would be included) in the
Registrable Securities (the "Majority Holders"), to register the sale of all or
part of such Registrable Securities, the Company shall, as promptly as
practicable, prepare and file with the Commission a registration statement
sufficient to permit the public offering and sale of the Registrable Securities
and will use its best efforts through its officers, directors, auditors, and
counsel to cause such registration statement to become effective as promptly as
practicable; provided, that the Company shall only be obligated to file one such
registration statement pursuant to this Section 6(b) for which all expenses
incurred in connection with such registration (other than the fees and
disbursements of counsel for the Eligible Holders and underwriting discounts, if
any, payable in respect of the Registrable Securities sold by the Eligible
Holders) shall be borne by the Company. Within five business days after
receiving any request contemplated by this Section 6(b), the Company shall give
written notice to all the other Eligible Holders, advising each of them that the
Company is proceeding with such registration and offering to include therein all
or any portion of any such other Eligible Holder's Registrable Securities,
provided that the Company receives a written request to do so from such Eligible
Holder within 30 days after receipt by him, her, or it of the Company's notice.
(c) In the event of a registration pursuant to the provisions of this
Section 6, the Company shall use its best efforts to cause the Registrable
Securities so registered to be registered or qualified for sale under the
securities or blue sky laws of such jurisdictions as the Holder or such holders
may reasonably request; provided, however, that the Company shall not be
required by reason of this Section 6(c) to register or qualify the Registrable
Securities in any jurisdiction where, as a result thereof, the Company would be
subject to service of general process or to taxation as a foreign corporation
doing business in such jurisdiction to which the Company is not then subject.
(d) The Company shall keep effective any registration or qualification
contemplated by this Section 6 and shall from time to time amend or supplement
each applicable registration statement, preliminary prospectus, final
prospectus, application, document, and communication for such period of time as
shall be required to permit the Eligible Holders to complete the offer and sale
of the Registrable Securities covered thereby. The Company shall in no event be
required to keep any such registration or qualification in effect for a period
in excess of nine months from the date on which the eligible Holders are first
free to sell such Registrable Securities; provided, however, that, if the
Company is required to keep any such registration or qualification in effect
with respect to securities other than the Registrable Securities beyond such
period, the Company shall keep such registration or qualification in effect as
it relates to the Registrable Securities for so long as such registration nor
qualification remains or is required to remain in effect in respect of such
other securities.
(e) In the event of a registration pursuant to the provisions of this
Section 6, the Company shall furnish to each Eligible Holder such number of
copies of the registration statement and of each amendment and supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act and the rules and regulations
thereunder, and such other documents as any Eligible Holder may reasonably
request to facilitate the disposition of the Registrable Securities included in
such registration.
(f) In the event of a registration pursuant to the provisions of this
Section 6, the Company shall furnish each Eligible Holder of any Registrable
Securities so registered with an opinion of its counsel (reasonably acceptable
to the Eligible Holders) to the effect that (i) the registration statement has
become effective under the Securities Act and
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no order suspending the effectiveness of the registration statement, or
preventing or suspending the use of the registration statement, any preliminary
prospectus, any final prospectus or any amendment or supplement thereto, has
been issued, nor, to the knowledge of such counsel has the Commission or any
securities or blue sky authority of any jurisdiction instituted or threatened to
institute any proceedings with respect to such an order, (ii) the registration
statement and each prospectus forming apart thereof (including each preliminary
prospectus), and any amendment or supplement thereto, complies as to form with
the Securities Act and the rules and regulations thereunder, and (iii) such
counsel has no knowledge of any material misstatement or omission in such
registration statement or any prospectus, as amended or supplemented. Such
opinion shall also state the jurisdictions in which the Registrable Securities
have been registered or qualified for sale pursuant to the provisions of Section
6(c).
(g) In the event of a registration pursuant to the provision of this
Section 6, the Company shall enter into a cross-indemnify agreement and a
contribution agreement, each in customary form, with each underwriter, if any,
and, if requested, enter into an underwriting agreement containing conventional
representations, warranties, allocation of expenses, and customary closing
conditions, including, without limitation, opinions of counsel and accountants'
cold comfort letters, with any underwriter who acquires any Registrable
Securities.
(h) The Company agrees that until all the Registrable Securities have
been sold under a registration statement or pursuant to Rule 144 under the
Securities Act, it shall keep current in filing all reports, statements, and
other materials required to be filed with the Commission to permit holders of
the Registrable Securities to sell such securities under Rule 144 under the
Securities Act.
7. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES.
7.1 ADJUSTMENT FOR DIVIDENDS, SUBDIVISIONS, COMBINATIONS OR
RECLASSIFICATIONS.
In case the Company shall (a) pay a dividend or make a distribution in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (b) subdivide its outstanding shares of Common Stock into a
greater number of shares, (c) combine its outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of its shares
of Common Stock any shares of capital stock of the Company; then, and in each
such case, the per share Exercise Price and the number of Warrant Securities in
effect immediately prior to such action shall be adjusted so that the Holder of
this Representative Warrant thereafter upon the exercise hereof shall be
entitled to receive the number and kind of shares of the Company which such
Holder would have owned immediately following such action had this
Representative Warrant been exercised immediately prior thereto. An adjustment
made pursuant to this Section shall become effective immediately after the
record date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination
or reclassification. If, as a result of an adjustment made pursuant to this
Section, the Holder of this Warrant shall become entitled to receive shares of
two or more classes of capital stock of the Company, the Board of Directors of
the Company (whose determination shall be conclusive) shall determine the
allocation of the adjusted Exercise Price between or among shares of such class
of capital stock.
Immediately upon any adjustment of the Exercise Price pursuant to this
Section, the Company shall send written notice thereof to the Holder of Warrant
Certificates (by first class mail, postage prepaid), which notice shall state
the Exercise Price resulting from such adjustment, and any increase or decrease
in the number of Warrant Securities to be acquired upon exercise of the
Representative Warrants, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
7.2 ADJUSTMENT FOR REORGANIZATION, MERGER OR CONSOLIDATION.
In case of any reorganization of the Company or 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
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merger shall execute and deliver to the Holder a supplemental Representative
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
Representative 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 Warrant
Securities of the Company for which such warrant might have been exercised
immediately prior to such reorganization, consolidation, merger, conveyance,
sale or transfer. Such supplemental Representative Warrant agreement shall
provide for adjustments which shall be identical to the adjustments provided in
this Section 7 and such registration rights and other rights as provided in this
Agreement. The Company shall not effect any such consolidation, merger, or
similar transaction as contemplated by this paragraph, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing, receiving, or leasing such assets or other appropriate
corporation or entity shall assume, by written instrument executed and delivered
to the Holders, the obligation to deliver to the Holders, such shares of stock,
securities, or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase, and to perform the other obligations of the
Company under this Agreement. The above provision of this Subsection shall
similarly apply to successive consolidations or successively whenever any event
listed above shall occur.
7.3 DIVIDENDS AND OTHER DISTRIBUTIONS.
In the event that the Company shall at any time prior to the exercise
of all of the Representative Warrants and/or Underlying Warrants distribute to
its stockholders any assets, property, rights, evidences of indebtedness,
securities (other than a distribution made as a cash dividend payable out of
earnings or out of any earned surplus legally available for dividends under the
laws of the jurisdictions of incorporation of the Company), whether issued by
the Company or by another, the Holders of the unexercised Representative
Warrants shall thereafter be entitled, in addition to the shares of Warrant
Securities or other securities and property receivable upon the exercise
thereof, to receive, upon the exercise of such Representative Warrants, the same
property, assets, rights, evidences of indebtedness, securities or any other
thing of value that they would have been entitled to receive at the time of such
distribution as if the Representative Warrants had been exercised immediately
prior to such distribution. At the time of any such distribution, the company
shall make appropriate reserves to ensure the timely performance of the
provisions of this subsection or an adjustment to the Exercise Price, which
shall be effective as of the day following the record date for such
distribution.
7.4 ADJUSTMENT IN NUMBER OF SECURITIES.
Upon each adjustment of the Exercise Price pursuant to the provisions
of this Section 7, the number of securities issuable upon the exercise of each
Representative Warrants shall be adjusted to the nearest full amount by
multiplying the number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of securities issuable upon exercise of the
Representative Warrants immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.
7.5 NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES.
No adjustment of the Exercise Price shall be made if the amount of said
adjustment shall be less than 10 cents ($.10) per Unit, 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 10 cents ($.10) per Unit.
7.6 ACCOUNTANT'S CERTIFICATE OF ADJUSTMENT.
In each case of an adjustment or readjustment of the Exercise Price or
the number of any securities issuable upon exercise of the Representative
Warrants, the Company, at its expense, shall cause independent certified public
accountants of recognized standing selected by the Company (who may be the
independent certified public accountants then auditing the books of the Company)
to compute such adjustment or readjustment in accordance herewith and
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prepare a certificate showing such adjustment or readjustment, and shall mail
such certificate, by first class mail, postage prepaid, to any Holder of the
Representative Warrants at the Holder's address as shown on the Company's books.
The certificate shall set forth such adjustment or readjustment, showing in
detail the facts upon which such adjustment or readjustment is based including,
but not limited to, a statement of (i) the Exercise Price at the time in effect,
and (ii) the number of additional securities and the type and amount, if any, of
other property which at the time would be received upon exercise of the
Representative Warrants.
7.7 ADJUSTMENT OF UNDERLYING WARRANT EXERCISE PRICE.
With respect to any of the Underlying Warrants whether or not the
Underlying Warrants have been exercised (or are exercisable) and whether or not
the Underlying Warrants are issued and outstanding, the Underlying Warrant
exercise price and the number of shares of Common Stock underlying such
Underlying Warrants shall be automatically adjusted in accordance with the
Warrant Agreement between the Company and the Company's transfer agent, upon
occurrence of any of the events relating to adjustments described therein.
Thereafter, the Underlying Warrants shall be exercisable at such adjusted
Underlying Warrant exercise price for such adjusted number of underlying shares
of Common Stock or other securities, properties or rights the same as if, at
such time, the Holder of the Representative Warrants had exercised such
Representative Warrants into the Underlying Warrants.
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 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 INTEREST.
The Company shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the Representative
Warrants and/or Underlying Warrants, nor shall it be required to issue script or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests may be eliminated, at the Company's option, by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights, or in lieu thereof paying cash equal
to such fractional interest multiplied by the current value of a share of Common
Stock.
10. RESERVATION AND LISTING.
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 Representative Warrants and the Underlying 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 Representative Warrants and/or the Underlying Warrants, and
payment of the Exercise Price and/or Underlying 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 Representative Warrants
and/or Underlying Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon the exercise of the
Representative Warrants and/or the Underlying Warrants to be listed and quoted
(subject to official notice of
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issuance) on all securities Exchanges and Systems on which the Common Stock, at
such time, may then be listed and/or quoted, including Nasdaq.
11. NOTICES TO WARRANT HOLDERS.
Nothing contained in this Agreement shall be construed as conferring
upon the Holders of the Representative Warrants and/or Underlying Warrants the
right to vote or to consent or to receive notice as a stockholder in respect of
any meetings of stockholders for the election of directors or any other matter,
or as having any rights whatsoever as a stockholder of the Company. If, however,
at any time prior to the expiration of the Representative Warrants and/or
Underlying 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 then 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 in 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 of the date of closing the transfer books for the determination of the
stockholders 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 notices 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. UNDERLYING WARRANTS.
The form of the certificate representing the Underlying Warrants (and
the form of election to purchase shares of Common Stock upon the exercise of the
Underlying Warrants and the form of assignment printed on the reverse thereof)
shall be substantially as set forth in the exhibits to the Warrant Agreement.
The exercise price of the Underlying Warrants and the number of shares of Common
Stock issuable upon the exercise of the Underlying Warrants are subject to
adjustment, whether or not the Representative Warrants have been exercised and
the Underlying Warrants have been issued, in the manner and upon the occurrence
of the events set forth in the Warrant Agreement, which is hereby incorporated
herein by reference and made a part hereof as if set forth in its entirety
herein. Subject to the provisions of this Agreement and upon issuance of the
Underlying Warrants, each registered holder of such Underlying Warrant shall
have the right to purchase from the Company (and the Company shall issue to such
registered holders) up to the number of fully-paid and non-assessable shares of
Common Stock (subject to adjustment as provided in the Warrant Agreement) set
forth in such Warrant Certificate, free and clear of all preemptive rights of
stockholders, provided that such registered Holder complies with the terms
governing exercise of the Underlying Warrant set forth in the Warrant Agreement,
and pays the applicable exercise price, determined in accordance with the terms
of the Warrant Agreement. Upon exercise of the Underlying Warrants, the Company
shall forthwith issue to the registered Holder of any such Underlying Warrant in
his name or in such name as may be directed by him, certificates for the number
of shares of Common Stock so purchased. Except as otherwise provided herein and
in this Agreement, the Underlying Warrants
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shall be governed in all respects by the terms of the Warrant Agreement. The
Underlying Warrants shall be transferrable in the manner provided in the Warrant
Agreement, and upon any such transfer, a new Underlying Warrant certificate
shall be issued promptly to the transferee. The Company covenants to send to
each Holder, irrespective of whether or not the Representative Warrants have
been exercised, any and all notices required by the Warrant Agreement to be sent
to holders of Underlying Warrants.
13. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly given when personally
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of any of the Registrable
Securities, 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 below or to
such other address as the Company may designate by notice to the
Holders.
Xxxx Xxxxxxx
2Connect Express, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxxx Xxxxx, Esq.
Xxxxx & XxXxxxxx
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
14. ENTIRE AGREEMENT: MODIFICATION.
This Agreement (and the Underwriting Agreement and Warrant Agreement to
the extent applicable) contain the entire understanding between the parties
hereto with respect to the subject matter hereof, and the terms and provisions
of this Agreement may not be modified, waived or amended except in a writing
executed by the Company and the Holders of at least a majority of Registrable
Securities (based on underlying numbers of shares of Common Stock). Notice of
any modification, waiver or amendment shall be promptly provided to any Holder
not consenting to such modification, waiver or amendment.
15. SUCCESSORS.
All the covenants and provisions of this Agreement shall be binding
upon and inure to the benefit of the Company, the Holders and their respective
successors and assigns hereunder.
16. TERMINATION.
This Agreement shall terminate at the close of business on April __,
2004. Notwithstanding the foregoing, the indemnification provisions of Section 6
shall survive such termination.
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 Alabama and for all
purposes shall be construed in accordance with the laws of said State
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without giving effect to the rules of said State governing the conflicts of
laws. The Company, the Representative and the Holders hereby agree that any
action, proceeding or claim arising out of, or relating in any way to, this
Agreement shall be brought and enforced in a federal or state court of competent
jurisdiction with venue only in the Seventeenth Judicial Circuit Court in and
for Broward, Florida or the United States District Court for the Southern
District of Florida, Broward Division, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. The Company, the
Representative and the Holders 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, the Representative and the Holders (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
14 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the party so served in any action, proceeding or claim.
18. 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.
19. 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.
20. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Representatives and any other
registered Holder(s) of the Warrant Certificates or Registrable Securities any
legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Representative and any other Holder(s) of the Warrant Certificates or
Registrable Securities.
21. 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 HEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
2CONNECT EXPRESS, INC.
By:
--------------------------------
Xxxx Xxxxxxx, President
Attest:
-------------------------
Xxxxx Xxxxxxxx, Secretary
STERNE, AGEE & XXXXX, INC.
By:
---------------------------------
Xxxxx X. Xxxxxxxx, Xx., President
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WARRANT CERTIFICATE
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, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH 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 SUCH 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 AT ANY TIME FROM 8:30 A.M., NEW YORK LOCAL TIME,
ON MARCH ___, 1998 UNTIL 5:30 P.M., NEW YORK
LOCAL TIME, ON APRIL __, 1998.
NO. UWW-___
59,500 Representative 178,500 Common Stock
------ Warrants -------
and
59,500 Underlying
------ Warrants
This Warrant Certificate certifies that Sterne, Agee & Xxxxx, Inc., or
registered assigns, is the registered holder of 59,500 Representative Warrants
of 2Connect Express, Inc. (the "Company"). Each of the 59,500 Representative
Warrants permits the Holder hereof to purchase initially, at any time from 8:30
A.M., March ___, 1998 (11 months following the date of the issuance of this
Warrant Certificate) until 5:30 p.m., New York local time on April __, 1998 (12
months after the Effective Date); provided that, if such date shall fall on a
weekend day or federal holiday, then the next following day which is not a
weekend day or federal holiday (the "Expiration Date"), one (1) Unit of the
Company at the initial exercise price, subject to adjustment in certain events
(the "Exercise Price"), of $9.90 per Unit (107% of the initial public offering
price). Each Underlying Warrant permits the Holder thereof to purchase during
the 60 day period commencing on the day one year from the Effective Date one (1)
share of the Company's Common Stock at the exercise price of $3.75 per share.
Any exercise of Representative Warrants shall be effected by 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
Representative's Warrant Agreement dated as of April __, 1997, between the
Company and Sterne, Agee & Xxxxx, Inc. (the "Representative's Warrant
Agreement"). Payment of the Exercise Price shall be made by wire transfer,
certified check or official bank check in New York Clearing House funds payable
to the order of the Company.
No Representative Warrant may be exercised after 5:30 p.m., New York
local time, on the Expiration Date, at which time all Representative Warrants
evidenced hereby, unless exercised prior thereto, shall thereafter be void.
The Representative Warrants evidenced by this Warrant Certificate are
part of a duly authorized issue of Representative Warrants issued pursuant to
the Representative's Warrant Agreement, which Representative's Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a
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description of the rights, limitation or rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Representative's 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, 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 Representative's Warrant Agreement.
Upon due presentment for registration or 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
Representative's 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 Representative Warrants
evidenced by this Certificate, the Company shall forthwith issue to the holder
hereof a new Warrant Certificate representing such number of unexercised
Representative Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Representative 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
Representative's Warrant Agreement shall have the meanings assigned to them in
the Representative's Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of April ___ , 1997 .
2CONNECT EXPRESS, INC.
By:
------------------------------
Xxxx Xxxxxxx, President
(Seal)
Attest:
-------------------------
Xxxxx Xxxxxxxx, Secretary
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EXHIBIT "A"
FORM OF SUBSCRIPTION (CASH EXERCISE)
(To be signed only upon exercise of Warrant)
TO: 2Connect Express, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
The undersigned, the Holder of Warrant Certificate number UWW- __ (the
"Warrant"), representing 59,500 Representative Warrants of 2Connect Express,
Inc. (the "Company"), which Warrant Certificate is being delivered herewith,
hereby irrevocably elects to exercise the purchase right provided by the Warrant
Certificate for, and to purchase thereunder, _________ Units of the Company, and
herewith makes payment of $___________ therefor, and requests that the
certificates for such securities be issued in the name of, and delivered to,
______________________________________________________________________________,
whose address is ____________________________________________________, all in
accordance with the Representative's Warrant Agreement and the Warrant
Certificate.
Dated: ____________________________
-----------------------------------------------
(Signature must conform in all respects to name
of Holder as specified on the face of the Warrant
Certificate)
-----------------------------------------------
-----------------------------------------------
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(FORM OF ASSIGNMENT)
(To be exercised by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ___________________________________________________________
hereby sells, assigns and transfers unto
(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, to transfer the within Warrant Certificate on the books of the
within-named Company, and 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 Assignee)
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