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Exhibit 4.3
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR (B) AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS OR (C) AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Right
to Purchase up to 5,625,000 Shares of Common Stock
of
Rapid Link, Incorporated
(subject
to adjustment as provided herein)
COMMON STOCK PURCHASE WARRANT
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No.
_________________
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Issue
Date: March 31, 2008
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RAPID
LINK, INCORPORATED, a corporation organized under the laws of
the State of Delaware (the “ Company ”),
hereby certifies that, for value received, VALENS OFFSHORE SPV
II, CORP., or its assigns (the “ Holder ”),
is entitled, subject to the terms set forth below, to purchase
from the Company (as defined herein) at any time from and
after the Issue Date of this Warrant, up to 5,625,000 fully
paid and non-assessable shares of Common Stock (as hereinafter
defined), $0.001 par value per share, at the applicable
Exercise Price per share (as defined below). The
number and character of such shares of Common Stock and the
applicable Exercise Price per share are subject to adjustment
as provided herein.
As
used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
1.
Common Stock
” means (i) the Company’s Common Stock, par value
$0.001 per share; and (ii) any other securities into which or
for which any of the securities described in the preceding
clause (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.
2.
“ Company ”
means Rapid Link, Incorporated and any person or entity which
shall succeed, or assume the obligations of, Rapid Link,
Incorporated hereunder.
3.
“ Exercise Price
” means a price of $0.01 per share.
4.
“ Other Securities
” means any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or
otherwise) which the Holder at any time shall be entitled to
receive, or shall have received, on the exercise of this
Warrant, in lieu of or in addition to Common Stock, or which
at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.
5.
“ Security Agreement
” means the Security Agreement dated as of the date
hereof among the Company, various Subsidiaries of the Company
party thereto, the Holder, the other Lenders (as defined
therein) from time to time party thereto and LV Administrative
Services, Inc., as administrative and collateral agent for the
Lenders (as defined therein), as amended, modified, restated
and/or supplemented from time to time.
6.
“Date of FMV
Calculation” means the date that precedes the
date on which the Exercise Notice is deemed delivered to the
Company pursuant to Section 14 of this Warrant.
46.
Exercise of
Warrant .
(a)
Number of Shares
Issuable upon Exercise . From and after the
date hereof, the Holder shall be entitled to receive, upon
exercise of this Warrant in whole or in part, by delivery of
an original or fax copy of an exercise notice in the form
attached hereto as Exhibit A
(the “ Exercise Notice
”), shares of Common Stock of the Company, subject to
adjustment pursuant to Section 4.
(b)
Fair
Market Value . For purposes hereof, the
“Fair Market Value” of a share of Common Stock as
of a particular date (the “ Determination Date
”) shall mean:
(i)
If the Company’s Common Stock is
traded on the American Stock Exchange or another
national exchange or is quoted on the National or Capital
Market of The Nasdaq Stock Market, Inc. (“ Nasdaq ”),
then the closing or last sale price, respectively, reported
for the last business day immediately preceding the
Determination Date.
(ii)
If the Company’s Common
Stock is not traded on the American Stock Exchange or another
national exchange or on the Nasdaq but is traded on the Nasdaq
Over the Counter Bulletin Board, then the mean of the average
of the closing bid and asked prices reported for the last
business day immediately preceding the Determination
Date.
(iii) Except
as provided in clause (d) below, if the Company’s Common
Stock is not publicly traded, then as the Holder and the
Company agree or in the absence of agreement by arbitration in
accordance with the rules then in effect of the American
Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and
training to pass on the matter to be decided.
(iv) If
the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the
Company’s charter, then all amounts to be payable per
share to holders of the Common Stock pursuant to the charter
in the event of such liquidation, dissolution or winding up,
plus all other amounts to be payable per share in respect of
the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of this Warrant are
outstanding at the Determination Date.
(c)
Company
Acknowledgment . The Company will, at the
time of the exercise of this Warrant, upon the request of the
Holder acknowledge in writing its continuing obligation to
afford to the Holder any rights to which the Holder shall
continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the Holder shall
fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford to the
Holder any such rights.
(d)
Trustee for
Warrant Holders . In the event that a bank
or trust company shall have been appointed as trustee for the
Holder pursuant to Subsection 3.2, such bank or trust company
shall have all the powers and duties of a warrant agent (as
hereinafter described) and shall accept, in its own name for
the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company
or such successor, as the case may be, on exercise of this
Warrant pursuant to this Section 1.
47.
Procedure for
Exercise .
(a)
Delivery of
Stock Certificates, Etc., on Exercise . The
Company agrees that the shares of Common Stock purchased upon
exercise of this Warrant shall be deemed to be issued to the
Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been
surrendered and payment made for such shares in accordance
herewith. As soon as practicable after the exercise
of this Warrant in full or in part, and in any event within
three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the
Holder, or as the Holder (upon payment by the Holder of any
applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and
non-assessable shares of Common Stock (or Other Securities) to
which the Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which the Holder would
otherwise be entitled, one full share of the Company’s
Common Stock to replace such fractional share, together with
any other stock or other securities and property (including
cash, where applicable) to which the Holder is entitled upon
such exercise pursuant to Section 1 or otherwise.
(b)
Exercise
.
(i)
Payment may be made either (i)
in cash by wire transfer of immediately available funds or by
certified or official bank check payable to the order of the
Company equal to the applicable aggregate Exercise Price, (ii)
by delivery of this Warrant, or shares of Common Stock and/or
Common Stock receivable upon exercise of this Warrant in
accordance with the formula set forth in subsection (b) below,
or (iii) by a combination of any of the foregoing methods, for
the number of shares of Common Stock specified in such
Exercise Notice (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common
Stock issuable to the Holder per the terms of this Warrant)
and the Holder shall thereupon be entitled to receive the
number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities)
determined as provided herein.
(ii)
If the Fair Market Value of one
share of Common Stock is greater than the Exercise Price on
the Date of FMV Calculation and (i) the Warrant Shares have
not been registered or (ii) may not be sold under Rule 144(b)
or any successor provision if exercised by payment in cash, in
lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of
this Warrant (or the portion thereof being exercised) by
surrender of this Warrant at the principal office of the
Company together with the properly endorsed Exercise Notice in
which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following
formula:
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Where
X =
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the
number of shares of Common Stock to be issued to the
Holder
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Y
=
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the
number of shares of Common Stock purchasable under this Warrant or,
if only a portion of this Warrant is being exercised, the portion
of this Warrant being exercised (at the date of such
calculation)
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A
=
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the
Fair Market Value of one share of the Company’s Common Stock
(at the Date of FMV Calculation)
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B
=
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the
Exercise Price per share (as adjusted to the date of such
calculation)
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48.
Effect of
Reorganization, Etc.; Adjustment of Exercise Price
.
(a)
Reorganization,
Consolidation, Merger, Etc . If there occurs
any capital reorganization or any reclassification of the
Common Stock of the Company, the consolidation or merger of
the Company with or into another person (other than a merger
or consolidation of the Company in which the Company is the
continuing entity and which does not result in any
reorganization or reclassification of its outstanding Common
Stock) or the sale or conveyance of all or substantially all
of the assets of the Company to another person, then, as a
condition precedent to any such reorganization,
reclassification, consolidation, merger, sale or conveyance,
the Holder will be entitled to receive upon surrender of this
Warrant to the Company (x) to the extent there are cash
proceeds resulting from the consummation of such
reorganization, reclassification, consolidation, merger, sale
or conveyance, in exchange for such Warrant, cash in an amount
equal to the cash proceeds that would have been payable to the
Holder had the Holder exercised such Warrant immediately prior
to the consummation of such reorganization, reclassification,
consolidation, merger, sale or conveyance, less the aggregate
Exercise Price payable upon exercise of this Warrant, and (y)
to the extent that the Holder would be entitled to receive
Common stock (or Other Securities) (in addition to or in lieu
of cash in connection with any such reorganization,
reclassification, consolidation, merger, sale or conveyance),
the same kind and amounts of securities or other assets, or
both, that are issuable or distributable to the holders of
outstanding Common Stock (or Other Securities) of the Company
with respect to their Common Stock (or Other Securities) upon
such reorganization, reclassification, consolidation, merger,
sale or conveyance, as would have been deliverable to the
Holder had the Holder exercised such Warrant immediately prior
to the consummation of such reorganization, reclassification,
consolidation, merger, sale or conveyance less an amount of
such securities having a value equal to the aggregate Exercise
Price payable upon exercise of this Warrant.
(b)
Dissolution
. In the
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