THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
SIRICOMM, INC.
COMPANY WARRANT TO PURCHASE SHARES
(SUBJECT TO ADJUSTMENT)
OF COMMON STOCK
(Void after__________, 2009)
No: PP-1
This certifies that for
value,____________________________________________, or registered assigns (the
"Holder"), is entitled, subject to the terms set forth below, at any time from
and after ____________, 2004 (the "Original Issuance Date") and before 5:00
p.m., Eastern Time, on ___________, 2009 (the "Expiration Date"), to purchase
from SiriCOMM, Inc., a Delaware corporation (the "Company").
___________________________________________ (_________) shares (subject to
adjustment as described herein), of common stock, par value $0.001 per share, of
the Company (the "Common Stock"), upon surrender hereof, at the principal office
of the Company referred to below, with a duly executed subscription form in the
form attached hereto as Exhibit A and simultaneous payment therefor in lawful,
immediately available money of the United States or otherwise as hereinafter
provided, at an initial exercise price per share of $__________(the "Purchase
Price") The Purchase Price is subject to further adjustment as provided below,
and the term "Common Stock" shall include, unless the context otherwise
requires, the stock and other securities and property at the time receivable
upon the exercise of this Warrant. The term "Warrants." as used herein, shall
mean this Warrant and any other Warrants delivered in substitution or exchange
therefor as provided herein.
This Warrant was issued in connection with a $600,000 minimum amount
and a $1,000,000 maximum amount private placement (the "Offering") of Units.
Sands Brothers International Limited acted as placement agent for the Offering
(the "Placement Agent"). In the Offering, the Company sold its securities to
"accredited investors" pursuant to Subscription Agreements (the "Subscription
Agreements").
1. Exercise. This Warrant may be exercised at any time or from time to
time from and after the Original Issuance Date and before 5:00 p.m., Eastern
Time, on____________________, 2009, on any business day, for the full number of
shares of Common Stock called for hereby, by surrendering it at the principal
office of the Company, at 0000 Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, with the subscription form duly executed, together with payment in an
amount equal to (a) the number of shares of Common Stock called for on the face
of this Warrant, as adjusted in accordance with the preceding paragraph of this
Warrant (without giving effect to any further adjustment herein), multiplied (b)
by the Purchase Price. Payment of the Purchase Price shall be made by payment in
immediately available funds. This Warrant may be exercised for less than the
full number of shares of Common Stock at the time called for hereby, except that
the number of shares of Common Stock receivable upon the exercise of this
Warrant as a whole, and the sum payable upon the exercise of this Warrant as a
whole, shall be proportionately reduced. Upon a partial exercise of this Warrant
in accordance with the terms hereof, this Warrant shall be surrendered, and a
new Warrant of the same tenor and for the purchase of the number of such shares
not purchased upon such exercise shall be issued by the Company to Holder
without any charge therefor. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of such shares of record as of the close of business on such date.
Within two (2) business days after such date, the Company shall issue and
deliver to the person or persons entitled to receive the same a certificate or
certificates for the number of full shares of Common Stock issuable upon such
exercise, together with cash, in lieu of any fraction of a share, equal to such
fraction of the then Fair Market Value on the date of exercise of one full share
of Common Stock.
"Fair Market Value" shall mean, as of any date: (i) if shares of the
Common Stock are listed on a national securities exchange, the average of the
closing prices as reported for composite transactions during the five (5)
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a trading day, then the mean between the closing
bid and asked prices on such exchange on such trading day; (ii) if shares of the
Common Stock are not so listed but are traded on the Nasdaq SmallCap Market
("NSCM"), the average of the closing prices as reported on the NSCM during the
five (5) consecutive trading days preceding the trading day immediately prior to
such date or, if no sale occurred on a trading day, then the mean between the
highest bid and lowest asked prices as of the close of business on such trading
day, as reported on the NSCM; or if applicable, the Nasdaq National Market
("NNM"), or if not then included for quotation on the NNM or NSCM, the average
of the highest reported bid and lowest reported asked prices as reported by the
OTC Bulletin Board or the National Quotations Bureau, as the case may be; or
(iii) if the shares of the Common Stock are not then publicly traded, the fair
market price of the Common Stock as determined in good faith by the Board of
Directors of the Company.
2. Shares Fully Paid; Payment of Taxes. All shares of Common Stock
issued upon the exercise of a Warrant shall be validly issued, fully paid and
non-assessable, and the Company shall pay all taxes and other governmental
charges (other than income taxes to the holder) that may be imposed in respect
of the issue or delivery thereof.
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3. Transfer and Exchange. This Warrant and all rights hereunder are
transferable, in whole or in part, on the books of the Company maintained for
such purpose at its principal office referred to above by Holder in person or by
duly authorized attorney, upon surrender of this Warrant together with a
completed and executed assignment form in the form attached as Exhibit B,
payment of any necessary transfer tax or other governmental charge imposed upon
such transfer and an opinion of counsel reasonably acceptable the Company
stating that such transfer is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"). Upon any partial transfer,
the Company will issue and deliver to Holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of this Warrant, by taking or holding the same, consents and agrees that this
Warrant when endorsed in blank shall be deemed negotiable and that when this
Warrant shall have been so endorsed, the holder hereof may be treated by the
Company and all other persons dealing with this Warrant as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such books,
the Company may treat the registered Holder hereof as the owner for all
purposes.
This Warrant is exchangeable at such office for Warrants for
the same aggregate number of shares of Common Stock, each new Warrant to
represent the right to purchase such number of shares as the Holder shall
designate at the time of such exchange.
4. Anti-Dilution Provisions.
A. Adjustment for Dividends in Other Stock and Property
Reclassifications. In case at any time or from time to time the holders of the
Common Stock (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible shareholders, shall have
become entitled to receive, without payment therefor,
(1) other or additional stock or other securities or
property (other than cash) by way of dividend,
(2) any cash or other property paid or payable out of
any source other than retained earnings (determined in accordance with generally
accepted accounting principles), or
(3) other or additional stock or other securities or
property (including cash) by way of stock-split, spin-off, reclassification,
combination of shares or similar corporate rearrangement (other than (x)
additional shares of Common Stock or any other stock or securities into which
such Common Stock shall have been changed, (y) any other stock or securities
convertible into or exchangeable for such Common Stock or such other stock or
securities or (z) any stock purchase rights, issued as a stock dividend or
stock-split, adjustments in respect of which shall be covered by the terms of
Section 4.C, Section 4.D or Section 4.E. then and in each such case, Holder,
upon the exercise hereof as provided in Section 1, shall be entitled to receive
the amount of stock and other securities and property (including cash in the
cases referred to in clauses (2) and (3) above) which such Holder would hold on
the date of such exercise if on the Original Issuance Date Holder had been the
holder of record of the number of
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shares of Common Stock called for on the face of this Warrant, as adjusted in
accordance with the first paragraph of this Warrant, and had thereafter, during
the period from the Original Issuance Date to and including the date of such
exercise, retained such shares and/or all other or additional stock and other
securities and property (including cash in the cases referred to in clause (2)
and (3) above) receivable by it as aforesaid during such period, giving effect
to all adjustments called for during such period by Section 4.A and Section 4.B.
B. Adjustment for Reorganization, Consolidation and Merger. In
case of any reorganization of the Company (or any other corporation the stock or
other securities of which are at the time receivable on the exercise of this
Warrant) after the Original Issuance Date, or in case, after such date, the
Company (or any such other corporation) shall consolidate with or merge into
another corporation or entity or convey all or substantially all its assets to
another corporation or entity, then and in each such case Holder, upon the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation, merger or conveyance, shall be entitled to
receive, in lieu of the stock or other securities and property receivable upon
the exercise of this Warrant prior to such consummation, the stock or other
securities or property to which such Holder would have been entitled upon such
consummation if Holder had exercised this Warrant immediately prior thereto, all
subject to further adjustment as provided in Sections 4.A. Section 4.B, Section
4.C and Section 4.D; in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property receivable
upon the exercise of this Warrant after such consummation.
C. Adjustment for Certain Dividends and Distributions. If the
Company at any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event:
(1) the Purchase Price then in effect shall be
decreased as of the time of such issuance or, in the event such record date is
fixed, as of the close of business on such record date, by multiplying the
Purchase Price then in effect by a fraction (A) the numerator of which is the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date, and
(B)the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date as the case may be, plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date is fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor,
the Purchase Price shall be recomputed accordingly as of the close of business
on such record date, and thereafter the Purchase Price shall be adjusted
pursuant to this Section 4.C as of the time of actual payment of such dividends
or distributions; and
(2) the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be increased, as of the time
of such issuance or, in the event such record date is fixed, as of the close of
business on such record date, in inverse proportion to the decrease in the
Purchase Price.
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D. Stock Split and Reverse Stock Split. If the Company at any
time or from time to time effects a stock split or subdivision of the
outstanding Common Stock, the Purchase Price then in effect immediately before
that stock split or subdivision shall be proportionately decreased and the
number of shares of Common Stock theretofore receivable upon the exercise of
this Warrant shall be proportionately increased. If the Company at any time or
from time to time effects a reverse stock split or combines the outstanding
shares of Common Stock into a smaller number of shares, the Purchase Price then
in effect immediately before that reverse stock split or combination shall be
proportionately increased and the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be proportionately decreased.
Each adjustment under this Section 4.D shall become effective at the close of
business on the date the stock split, subdivision, reverse stock split or
combination becomes effective.
X. Xxxxxxxxxxx as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4.
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of a
Warrant a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based. The
Company shall, upon the written request at any time of any holder of a Warrant,
furnish or cause to be furnished to such holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) Purchase Price at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the exercise of the
Warrant.
5. Notices of Record Date. In case:
A. the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable upon the
exercise of the Warrants) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or
B. of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation, or
C. of any voluntary dissolution, liquidation or winding-up of
the Company,
then, and in each such case, the Company will mail or cause to be mailed to each
holder of a Warrant at the time outstanding a notice specifying, as the case may
be, (a) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (b) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is expected to take place, and the time, if any is to be fixed, as of
which the holders of record of Common Stock (or such stock or securities at the
time receivable upon the exercise of the Warrants) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization,
-5-
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up, such notice shall be mailed at least ten (10) days prior to the date
therein specified.
6. Loss or Mutilation. Upon receipt by the Company of evidence
satisfactory to it (in the exercise of reasonable discretion) of the ownership
of and the loss, theft, destruction or mutilation of any Warrant and (in the
case of loss, theft or destruction) of indemnity satisfactory to it (in the
exercise of reasonable discretion), and (in the case of mutilation) upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor.
7. Reservation of Common Stock. The Company shall at all times reserve
and keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All of the shares of Commons
Stock issuable upon the exercise of the rights represented by this Warrant will,
upon issuance and receipt of the Purchase Price therefor, be fully paid and
nonassessable, and free from all preemptive rights, rights of first refusal or
first offer, taxes, liens and charges of whatever nature, with respect to the
issuance thereof.
8. Registration Rights Agreement. The Holder of this Warrant is
entitled to have the shares of Common Stock purchased in the Offering and the
Warrant Shares issuable upon exercise of this Warrant registered for resale
under the 1933 Act, pursuant to and in accordance with the Registration Rights
Agreement dated as of the date hereof by and between the Holder and the Company.
9. Notices. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class, registered or
certified mail, postage prepaid, to the address furnished to the Company in
writing by the Holder.
10. Change: Modifications; Waiver. No terms of this Warrant may be
amended, waived or modified except by the express written consent of the Company
and the holders of not less than 50.1% of the then outstanding Warrants.
11. Headings. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to constitute a part
hereof.
12. Governing Law, Etc. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to the conflicts of laws principles thereof. The parties hereto hereby
irrevocably agree that any suit or proceeding arising directly and/or indirectly
pursuant to or under this Agreement, shall be brought solely in a federal or
state court located in the City, County and State of New York. By its execution
hereof, the parties hereby covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or
-6-
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of all of its reasonable legal fees and expenses.
13. Redemption of Warrants.
A. At any time commencing on the date twelve (12) months
following the final closing date of the Offering, on not less than ten (10) days
prior written notice (the "Redemption Notice"), to all of the Holders, all
issued and outstanding Warrants issued in the Offering may be redeemed, in whole
or in part, at the option of the Company, at a redemption price of $0.01 per
Warrant (the "Redemption Price"), provided that: (i) the Market Price (as
defined below) for a share of Common Stock equals or exceeds (a) two hundred
fifty (250%) percent of the then current Purchase Price if the Redemption Date
(as defined below) for thirty (30) consecutive Trading Days (as defined below)
ending on the 2nd Trading Day prior to the date of the Redemption Notice; and
(ii) if a registration statement covering the Warrant Shares filed under the
1933 Act is declared effective by the Commission and remains effective on and
through the date fixed for redemption of the Warrants (the "Redemption Date").
For purposes of this Warrant, (i) "Market Price" is defined as the Closing Price
per share of Common Stock on the principal Trading Market on which the Common
Stock is included for trading; provided. that if there is no trading in the
Common Stock on a particular Trading Day on the relevant principal Trading
Market, the Market Price for that day shall be the Market Price on the last
preceding Trading Day on which there was trading in the Common Stock on the
principal Trading Market, (ii) "Closing Price" means on any particular date (a)
the last reported closing price per share of the Common Stock on such date on
the Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York time)
as the last reported closing price for regular session trading on such day), or
(b) if there is no such price on such date, then the closing price on the
Trading Market on the date nearest preceding such date (as reported by Bloomberg
L.P. at 4:15 p.m. (New York time) as the closing price for regular session
trading on such day), or (c) if the Common Stock is not then listed or quoted on
the Trading Market and if prices for the Common Stock are then reported in the
"pink sheets" published by the National Quotation Bureau Incorporated (or a
similar organization or agency succeeding to its functions of reporting prices),
the most recent price per share of the Common Stock so reported, or (d) if the
shares of Common Stock are not then publicly traded the fair market value of a
share of Common Stock as determined by an appraiser selected jointly by the
holders of a majority of the Warrants then outstanding and the Company; (iii)
"Trading Day" means (a) a day on which the Common Stock is traded on a Trading
Market, or (b) if the Common Stock is not quoted on a Trading Market, a day on
which the Common Stock is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting price); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (a), and (b)
hereof, then Trading Day shall mean a Business Day; and (iv) "Trading Market"
means the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the OTC Bulletin Board, the American
Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the
Nasdaq SmallCap Market.
B. The Redemption Notice shall specify (i) the Redemption
Price, (ii) the Redemption Date, (iii) the place where the Warrant certificates
shall be delivered and the
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redemption price paid, and (iv) that the right to exercise this Warrant shall
terminate at 5:00 p.m. (New York time) on the business day immediately preceding
the Redemption Date.
C. Any right to exercise a Warrant shall terminate at 5:00
p.m. (New York time) on the business day immediately preceding the Redemption
Date. On and after the Redemption Date, the holder of this Warrant shall have no
further rights except to receive, upon surrender of this Warrant, the Redemption
Price.
D. From and after the Redemption Date, the Company shall, at
the place specified in the Redemption Notice, upon presentation and surrender to
the Company by or on behalf of the holder thereof the warrant certificates
evidencing this Warrant being redeemed, deliver, or cause to be delivered to or
upon the written order of such holder, a sum in cash equal to the Redemption
Price of this Warrant. From and after the Redemption Date, this Warrant shall
expire and become void and all rights hereunder and under the warrant
certificates, except the right to receive payment of the Redemption Price, shall
cease.
14. Counterparts. This Agreement may be signed in counterparts.
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WARRANT SIGNATURE PAGE
Dated:____________________________
SIRICOMM, INC.
By:______________________
Name:
Title:
EXHIBIT A
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant and purchases____________of the number of shares of Common Stock of
SiriCOMM, Inc., purchasable with this Warrant, and herewith makes payment
therefor (either in cash or pursuant to the cashless exercise provisions set
forth in Section 1A of the Warrant), all at the price and on the terms and
conditions specified in this Warrant.
Dated:_______________________________
_______________________________
(Signature of Registered Owner
_______________________________
(Street Address)
_______________________________
(City / State / Zip Code)
EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below:
Name of Assignee Address Number of Shares
---------------- ------- ----------------
and does hereby irrevocably constitute and
appoint__________________________________________Attorney to make such transfer
on the books of SiriComm, Inc., maintained for the purpose, with full power of
substitution in the premises.
Dated:___________________________________
_______________________________
(Signature)
_______________________________
(Witness)
The undersigned Assignee of the Warrant hereby makes to SiriCOMM, Inc.,
as of the date hereof, with respect to the Assignee, all of the representations
and warranties made by the Holder, and the undersigned Assignee agrees to be
bound by all the terms and conditions of the Warrant and the SiriCOMM, Inc.
Registration Rights Agreement, dated as of_________________________, 2004, by
and between SiriCOMM, Inc. and the Holder.
Dated:__________________________________
_______________________________
(Signature)
