EXHIBIT 4.1
AMERICAN DIGITAL COMMUNICATIONS, INC
(a Wyoming corporation)
THIS WARRANT HAS BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THIS
WARRANT OR (ii) PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
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COMMON STOCK PURCHASE WARRANT
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THIS COMMON STOCK PURCHASE WARRANT (this "Warrant") certifies that, for
value received, [ ] (the "Holder") is entitled, on the terms and subject to the
conditions set forth herein, to purchase up to [ ] ([ ]) shares of the Common
Stock, $.0001 par value ("Common Stock"), of American Digital Communications,
Inc., a Wyoming corporation (the "Company"), at an exercise price per share
equal to $.30 (the "Purchase Price"), in lawful funds of the United States of
America payable in cash or by certified or official bank check, such Purchase
Price and the number of shares purchasable hereunder (the "Subject Stock") being
subject to adjustment as set forth in this Common Stock Purchase Warrant (this
"Warrant").
This Warrant is subject to the following further terms and conditions:
Section 1. EXERCISE. The purchase rights represented by this Warrant
shall be exercisable, at the option of the Holder (as herein defined), for all
or part of the Subject Stock, subject to adjustment as hereinafter set forth,
commencing on the date of this Warrant. The purchase rights represented by this
Warrant shall expire on the fifth anniversary hereof. Upon presentation and
surrender of this Warrant, with written notice in the form of Exhibit A from the
Holder of its exercise, together with payment of the Purchase Price then in
effect for the shares of Common Stock thereby purchased, at the principal office
of the Company, the Holder shall be entitled to receive a certificate or
certificates representing the shares of Common Stock so purchased. The term
"Holder" shall include any person to whom this Warrant has been transferred as
permitted by the terms of this Warrant. All shares which may be issued upon the
exercise of this Warrant will, upon issuance, be fully paid and nonAassessable
and free from all taxes, liens and charges with respect thereto.
Section 2. CONSIDERATION. This Warrant has been issued to the Holder in
partial consideration of an investment in certain debt securities of the Company
made contemporaneously herewith pursuant to a letter agreement dated [ ], 1998
between the Holder and the Company.
Section 3. ADJUSTMENTS.
(3.1) Stock Splits. After the date hereof, in case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, whether by stock dividend, stock split or otherwise,
the Purchase Price in effect immediately prior to such subdivision shall be
proportionately reduced and the number of shares of Common Stock purchasable
hereunder shall be proportionately increased. In case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Purchase Price in effect immediately prior to such combination shall be
proportionately increased and the number of shares of Common Stock purchasable
hereunder shall be proportionately reduced.
(3.2) Reclassifications. After the date hereof, in case of any
reclassification or change in the outstanding shares of Common Stock (except
under the circumstances contemplated in Section 3(a)), or in case of any
consolidation or merger to which the Company is a party (except a merger in
which the Company is the surviving corporation and which does not result in any
reclassification or change in the outstanding shares of Common Stock), or in
case of any sale or conveyance to another person or entity of all or
substantially all of the property of the Company, effective provision shall be
made by the Company or by the successor or purchasing person or entity that the
Holder shall have the right, upon presentation and surrender of this Warrant,
with written notice from the Holder of its exercise, together with payment of
the Purchase Price in effect immediately prior to such reclassification, change,
consolidation, merger, sale or conveyances for the number of shares that but for
such transaction would have been purchased hereunder, to receive the kind and
amount of stock and other securities and property receivable in such transaction
by a holder of such number of shares.
(3.3) No Other Antidilution Rights. Except as expressly set
forth herein, the Holder shall not be entitled to any antiAdilution rights with
respect to either (i) the number and kind of shares subject to this Warrant or
(ii) the Purchase Price.
Section 4. REPLACEMENT. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the 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
this Warrant, if mutilated, the Company will make and deliver a replacement
warrant of like tenor, in lieu of this Warrant. Further, if the Holder of this
Warrant exercises the purchase rights granted hereunder in part but not in
whole, the Company agrees that it will deliver to the Holder a replacement
warrant which will entitle the Holder thereof to purchase the number of shares
of Common Stock that remain as yet unpurchased under this Warrant on the terms
and conditions set forth herein.
Section 5. NO FRACTIONAL SHARES. The Company shall not be required to
issue stock certificates representing fractions of shares of Common Stock, but
may, at its option, in respect of any fraction of a share make a payment in cash
based on the Purchase Price.
Section 6. RESERVATION OF SHARES. The Company shall reserve and keep
available a sufficient number of shares of Common Stock to satisfy the
requirements of this Warrant. Before taking any action which would cause an
adjustment reducing the Purchase Price below the then par value of the shares of
Common Stock issuable upon exercise of this Warrant, the Company will take any
corporate action which may, in the opinion of its counsel, be reasonably
necessary in order that the Company may validly and legally issue fully paid and
nonAassessable shares of Common Stock at such adjusted Purchase Price.
Section 7. NOTICES. All notices, requests, consents or other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed firstAclass postage prepaid as follows:
(a) If to the Holder, to
[ ]
[ ]
[ ]
Attention: [ ]
or at such other address as may have been furnished to the Company in writing by
the Holder; and
(b) If to the Company, to
American Digital Communications, Inc.
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or at such other address as may have been furnished to the Holder in writing by
the Company.
Section 8. TAX CONSEQUENCES. Holder acknowledges that the issuance of
this Warrant and its exercise may have tax consequences to Holder, and agrees
that the Company has no responsibility for advising Holder with respect to such
taxes or for payment of any such taxes. Holder shall rely solely on its own tax
advisor and shall be solely responsible for payment of any resulting taxes.
Section 9. HOLDER'S ACKNOWLEDGMENTS. Holder acknowledges and agrees to
the following:
(a) This Warrant and the shares of Common Stock purchasable hereunder
are being and will be acquired by the Holder for investment purposes and for its
own account and not with a view to the distribution or resale thereof.
(b) No public media advertisement has been used or mass mailing made in
connection with this Warrant or the Common Stock issuable upon its exercise, and
no cash or securities have been given or paid, directly or indirectly, to any
promoter as compensation in connection with this Warrant or such Common Stock.
(c) This Warrant and such Common Stock will not be registered under the
Securities Act, or any state securities laws, and will be issued in reliance
upon available exemptions from registration. This Warrant may not be sold,
transferred or assigned by the Holder, in whole or in part, without the consent
of the Company. The Common Stock may not be sold, transferred, assigned or
otherwise disposed of without an effective registration statement covering the
Common Stock under the Securities Act and any applicable state securities laws,
or an opinion of counsel satisfactory to the Company that registration is not
required under the Securities Act and applicable state securities laws.
(d) There are restrictions imposed by law upon the transfer of and
resale of such Common Stock and the Holder may be required to hold such shares
of Common Stock indefinitely unless such shares are subsequently registered
under the Act and applicable state securities laws, or an exemption from such
registration is available.
(e) The following legend shall be placed on the certificates for shares
of the Common Stock purchased upon exercise of this Warrant: "The Shares
represented by this certificate have not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), or the securities laws of any
state. The shares have been acquired for investment and not with a view toward
distribution or resale and may not be sold or otherwise transferred without an
effective registration statement covering such shares under the Securities Act
and any applicable state securities laws, or an opinion of counsel, satisfactory
to the issuer, that registration thereunder is not required."
(f) The Holder shall have no rights as a stockholder with respect to
any shares of Common Stock purchasable under this Warrant until the date of
issuance of a certificate for the Common Stock so purchased in accordance with
the terms hereof. Except as expressly set forth herein, no adjustment shall be
made for dividends or other rights for which the record date occurs prior to the
date of such issuance.
Section 10. REPRESENTATION OF THE COMPANY. The Company represents and
warrants that this Warrant has been duly authorized, executed and delivered and
constitutes the binding and enforceable obligation of the Company.
Section 11. GOVERNING LAW. This Warrant shall be construed and enforced
in accordance with and governed by the laws of the State of New York without
regard to the choice of law principles thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its [ ] and attested to by its Secretary as of the date set forth below.
DATED: As of [ ], 1998
AMERICAN DIGITAL COMMUNICATIONS, INC.
By:___________________________
Name:
Title:
Attest:
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[ ]
Secretary
Exhibit A
FORM OF NOTICE OF EXERCISE
TO: American Digital Communications, Inc.
The undersigned, the holder of warrants to purchase shares of common
stock of American Digital Communications, Inc. (the "Company") pursuant to a
warrant agreement dated as of [ ], 1998, hereby irrevocably elects to exercise
the purchase right represented by such warrants for, and to purchase thereunder,
____ shares of common stock of the Company and herewith tenders payment of
$________ in full payment of the purchase price for such shares, and requests
that the certificates for such shares be issued in the name of, and be delivered
to, the undersigned at the address indicated.
Dated: _______________
[ ]
By:____________________________________
Name:
Title:
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(address)
