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THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY
STATE, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE
RULES AND
REGULATIONS THEREUNDER OR ANY STATE SECURITIES LAWS OR THE
PROVISIONS OF THIS
WARRANT.
No. of Shares of Common Stock: 1,000,000
WARRANT
To Purchase Common Stock of
SIRICOMM, INC.
THIS IS TO CERTIFY THAT Sat-Net Communications, Inc. (the
"Holder"), or its registered assigns, is entitled, at any time
from the Warrant
Issuance Date (as hereinafter defined) to the Expiration Date
(as hereinafter
defined), to purchase from SIRICOMM, INC., a Delaware
corporation (the
"Company"), One Million (1,000,000) shares of Common Stock (as
hereinafter
defined and subject to adjustment as provided herein), in whole
or in part,
including fractional parts, at a purchase price per share equal
to $2.00
("Exercise Price") subject to any adjustments made to such
amount pursuant to
Section 4 hereto) on the terms and conditions and pursuant to
the provisions
hereinafter set forth.
1. DEFINITIONS
As used in this Warrant, the following terms have the
respective meanings set forth below:
"Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by the Company after the Closing Date, other
than Warrant
Stock.
"Book Value" shall mean, in respect of any share of Common
Stock on any date herein specified, the consolidated book value
of the Company
as of the last day of any month immediately preceding such date,
divided by the
number of Fully Diluted Outstanding shares of Common Stock as
determined in
accordance with GAAP (assuming the payment of the exercise
prices for such
shares) by a firm of independent certified public accountants of
recognized
national standing selected by the Company and reasonably
acceptable to the
Holder.
"Business Day" shall mean any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be
closed in the
State of New York.
"Closing Date" shall have the meaning set forth in the
Subscription Agreement.
"Commission" shall mean the Securities and Exchange
Commission
or any other federal agency then administering the Securities
Act and other
federal securities laws.
"Common Stock" shall mean (except where the context
otherwise
indicates) the Common Stock, par value $.001 per share, of the
Company as
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constituted on the Closing Date, and any capital stock into
which such Common
Stock may thereafter be changed, and shall also include (i)
capital stock of the
Company of any other class (regardless of how denominated)
issued to the holders
of shares of Common Stock upon any reclassification thereof
which is also not
preferred as to dividends or assets over any other class of
stock of the Company
and which is not subject to redemption and (ii) shares of common
stock of any
successor or acquiring corporation received by or distributed to
the holders of
Common Stock of the Company in the circumstances contemplated by
Section 4.4.
"Convertible Securities" shall mean evidences of
indebtedness,
shares of stock or other securities which are convertible into
or exchangeable,
with or without payment of additional consideration in cash or
property, for
shares of Common Stock, either immediately or upon the
occurrence of a specified
date or a specified event.
"Current Warrant Price" shall mean $2.00 subject to any
adjustments to such amount made in accordance with Section 4
hereof.
"Exchange Act" shall mean the Securities Exchange Act of
1934,
as amended, or any successor federal statute, and the rules and
regulations of
the Commission thereunder, all as the same shall be in effect
from time to time.
"Exercise Period" shall mean the period during which this
Warrant is exercisable pursuant to Section 2.1.
"Expiration Date" shall mean February 8, 2008.
"Fully Diluted Outstanding" shall mean, when used with
reference to Common Stock, at any date as of which the number of
shares thereof
is to be determined, all shares of Common Stock Outstanding at
such date and all
shares of Common Stock issuable in respect of this Warrant,
outstanding on such
date, and other options or warrants to purchase, or securities
convertible into,
including without limitation the shares of Common Stock
outstanding on such date
which would be deemed outstanding in accordance with GAAP for
purposes of
determining book value or net income per share.
"GAAP" shall mean generally accepted accounting principles
in
the United States of America as from time to time in effect.
"Holder" shall mean the Person in whose name the Warrant or
Warrant Stock set forth herein is registered on the books of the
Company
maintained for such purpose.
"Market Price" per Common Share means the average of the
closing bid prices of the Common Shares as reported on the
National Association
of Securities Dealers Automated Quotation System for the
National Market,
("NASDAQ") or, if such security is not listed or admitted to
trading on the
NASDAQ, on the principal national security exchange or quotation
system on which
such security is quoted or listed or admitted to trading, or, if
not quoted or
listed or admitted to trading on any national securities
exchange or quotation
system, the closing bid price of such security on the
over-the-counter market on
the day in question as reported by the National Association of
Security Dealers,
Inc., or a similar generally accepted reporting service, as the
case may be, for
the five (5) trading days immediately preceding the date of
determination.
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"Network Installation Agreement" shall mean the Network
Installation Agreement dated February 7, 2005 by and between the
Company and the
Holder, as it may be amended from time to time.
"Other Property" shall have the meaning set forth in Section
4.5.
"Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is
to be determined,
all issued shares of Common Stock, except shares then owned or
held by or for
the account of the Company or any subsidiary thereof, and shall
include all
shares issuable in respect of outstanding scrip or any
certificates representing
fractional interests in shares of Common Stock.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, incorporated organization,
association,
corporation, institution, public benefit corporation, entity or
government
(whether federal, state, county, city, municipal or otherwise,
including,
without limitation, any instrumentality, division, agency, body
or department
thereof).
"Restricted Common Stock" shall mean shares of Common Stock
which are, or which upon their issuance on the exercise of this
Warrant would
be, evidenced by a certificate bearing the restrictive legend
set forth in
Section 9.1(a).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
"Transfer" shall mean any disposition of any Warrant or
Warrant Stock or of any interest in either thereof, which would
constitute a
sale thereof within the meaning of the Securities Act.
"Transfer Notice" shall have the meaning set forth in
Section
9.2.
"Vesting Schedule" shall mean this Warrant is subject to
vesting at the rate of 2,500 warrants per truck-stop location
installed;
provided, however, that the vesting with respect to the first
250 locations
(625,000 warrants) will be deemed to occur when the wireless
infrastructure is
"network operational" as defined in the Network Installation
Agreement.
"Warrant Issuance Date" shall mean any date on which
Warrants
are issued pursuant to the Subscription Agreement.
"Warrants" shall mean this Warrant and all warrants issued
upon transfer, division or combination of, or in substitution
for, any thereof.
All Warrants shall at all times be identical as to terms and
conditions and
date, except as to the number of shares of Common Stock for
which they may be
exercised.
"Warrant Price" shall mean an amount equal to (i) the number
of shares of Common Stock being purchased upon exercise of this
Warrant pursuant
to Section 2.1, multiplied by (ii) the Current Warrant Price as
of the date of
such exercise.
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"Warrant Stock" shall mean the shares of Common Stock
purchased by the holders of the Warrants upon the exercise
thereof.
2. EXERCISE OF WARRANT
2.1. Manner of Exercise. From and after the Warrant Issuance
Date and until 5:00 P.M., New York City time, on the Expiration
Date, Holder,
subject to the Vesting Schedule, may exercise this Warrant, on
any Business Day,
for all or any part of the number of shares of Common Stock
purchasable
hereunder.
In order to exercise this Warrant, in whole or in part,
Holder
shall deliver to the Company at the office or agency designated
by the Company
pursuant to Section 12, (i) a written notice of Holder's
election to exercise
this Warrant, which notice shall specify the number of shares of
Common Stock to
be purchased, (ii) payment by cash, check or bank draft payable
to the Company
of the Warrant Price in cash or by wire transfer or cashier's
check drawn on a
United States bank for all shares then being purchased and (iii)
this Warrant.
Such notice shall be substantially in the form of the
subscription form
appearing at the end of this Warrant as Exhibit 1, duly executed
by Holder or
its agent or attorney. Upon receipt of the items referred to in
clauses (i),
(ii) and (iii) above, the Company shall, as promptly as
practicable, and in any
event within five (5) Business Days thereafter, execute or cause
to be executed
and deliver or cause to be delivered to Holder a certificate or
certificates
representing the aggregate number of full shares of Common Stock
issuable upon
such exercise, together with cash in lieu of any fraction of a
share, as
hereinafter provided. The stock certificate or certificates so
delivered shall
be, to the extent possible, in such denomination or
denominations as Holder
shall request in the notice and shall be registered in the name
of Holder or,
subject to Section 9, such other name as shall be designated in
the notice. This
Warrant shall be deemed to have been exercised and such
certificate or
certificates shall be deemed to have been issued, and Holder or
any other Person
so designated to be named therein shall be deemed to have become
a holder of
record of such shares for all purposes, as of the date the
Warrant has been
exercised by payment to the Company of the Warrant Price. If
this Warrant shall
have been exercised in part, the Company shall, at the time of
delivery of the
certificate or certificates representing Warrant Stock, deliver
to Holder a new
Warrant evidencing the rights of Holder to purchase the
unpurchased shares of
Common Stock called for by this Warrant, which new Warrant shall
in all other
respects be identical with this Warrant.
The Holder shall be entitled to exercise the Warrant
notwithstanding the commencement of any case under 11 U.S.C. ss.
101 et seq.
(the "Bankruptcy Code"). In the event the Company is a debtor
under the
Bankruptcy Code, the Company hereby waives to the fullest extent
permitted any
rights to relief it may have under 11 U.S.C. ss. 362 in respect
of the Holder's
exercise right. The Company hereby waives to the fullest extent
permitted any
rights to relief it may have under 11 U.S.C. ss. 362 in respect
of the exercise
of the Warrant. The Company agrees, without cost or expense to
the Holder, to
take or consent to any and all action necessary to effectuate
relief under 11
U.S.C. ss. 362.
2.2. Payment of Taxes and Charges. All shares of Common
Stock
issuable upon the exercise of this Warrant pursuant to the terms
hereof shall be
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validly issued, fully paid and nonassessable, and without any
preemptive rights.
The Company shall pay all expenses in connection with, and all
taxes and other
governmental charges that may be imposed with respect to, the
issue or delivery
thereof.
2.3. Fractional Shares. The Company shall not be required to
issue a fractional share of Common Stock upon exercise of any
Warrant. As to any
fraction of a share which Holder would otherwise be entitled to
purchase upon
such exercise, the Company shall pay a cash adjustment in
respect of such final
fraction in an amount equal to the same fraction of the Market
Price per share
of Common Stock on the relevant exercise date.
2.4. Continued Validity. A holder of shares of Common Stock
issued upon the exercise of this Warrant, in whole or in part
(other than a
holder who acquires such shares after the same have been
publicly sold pursuant
to a Registration Statement under the Securities Act or sold
pursuant to Rule
144 thereunder), shall continue to be entitled with respect to
such shares to
all rights to which it would have been entitled as Holder under
Sections 9, 10
and 14 of this Warrant. The Company will, at the time of
exercise of this
Warrant, in whole or in part, upon the request of Holder,
acknowledge in
writing, in form reasonably satisfactory to Holder, its
continuing obligation to
afford Holder all such rights; provided, however, that if Holder
shall fail to
make any such request, such failure shall not affect the
continuing obligation
of the Company to afford to Holder all such rights.
3. TRANSFER, DIVISION AND COMBINATION
3.1. Transfer. Subject to compliance with Sections 9 and the
Vesting Schedule, transfer of this Warrant and all rights
hereunder, in whole or
in part, shall be registered on the books of the Company to be
maintained for
such purpose, upon surrender of this Warrant at the principal
office of the
Company referred to in Section 2.1 or the office or agency
designated by the
Company pursuant to Section 12, together with a written
assignment of this
Warrant substantially in the form of Exhibit 2 hereto duly
executed by Holder or
its agent or attorney. Upon such surrender, the Company shall,
subject to
Section 9 and the Vesting Schedule, execute and deliver a new
Warrant or
Warrants in the name of the assignee or assignees and in the
denomination
specified in such instrument of assignment, and shall issue to
the assignor a
new Warrant evidencing the portion of this Warrant not so
assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly
assigned in
compliance with Section 9, may be exercised by a new Holder for
the purchase of
shares of Common Stock without having a new Warrant issued.
3.2. Division and Combination. Subject to Section 9 and the
Vesting Schedule, this Warrant may be divided or combined with
other Warrants
upon presentation hereof at the aforesaid office or agency of
the Company,
together with a written notice specifying the names and
denominations in which
new Warrants are to be issued, signed by Holder or its agent or
attorney.
Subject to compliance with Section 3.1 and with Section 9, as to
any transfer
which may be involved in such division or combination, the
Company shall execute
and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to
be divided or combined in accordance with such notice.
3.3. Expenses. The Company shall prepare, issue and deliver
at
its own expense the new Warrant or Warrants under this Section
3.
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3.4. Maintenance of Books. The Company agrees to maintain,
at
its aforesaid office or agency, books for the registration and
the registration
of transfer of the Warrants.
4. ADJUSTMENTS
The number of shares of Common Stock for which this Warrant
is
exercisable, or the price at which such shares may be purchased
upon exercise of
this Warrant, shall be subject to adjustment from time to time
as set forth in
this Section 4. The Company shall give Holder notice of any
event described
below which requires an adjustment pursuant to this Section 4 at
the time of
such event.
4.1. Stock Dividends, Subdivisions and Combinations. If at
any
time the Company shall:
(a) take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend payable
in, or other
distribution of, Additional Shares of Common Stock,
(b) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, or
(c) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock,
then (i) the number of shares of Common Stock for which this
Warrant is exercisable immediately after the occurrence of any
such event shall
be adjusted to equal the number of shares of Common Stock which
a record holder
of the same number of shares of Common Stock for which this
Warrant is
exercisable immediately prior to the occurrence of such event
would own or be
entitled to receive after the happening of such event, and (ii)
the Current
Warrant Price shall be adjusted to equal (A) the Current Warrant
Price
multiplied by the number of shares of Common Stock for which
this Warrant is
exercisable immediately prior to the adjustment divided by (B)
the number of
shares for which this Warrant is exercisable immediately after
such adjustment.
4.2. Certain Other Distributions.
In case the Company shall issue any Common Stock or any
rights, options or warrants to all holders of record of its
Common Stock
entitling all holders to subscribe for or purchase shares of
Common Stock at a
price per share less than the Market Price per share of the
Common Stock on the
date fixed for such issue, the Current Warrant Price in effect
immediately prior
to the close of business on the date fixed for such
determination shall be
reduced to the amount determined by multiplying such Current
Warrant Price by a
fraction, the numerator of which shall be the number of shares
of Common Stock
outstanding immediately prior to the close of business on the
date fixed for
such determination plus the number of shares of Common Stock
which the aggregate
of the offering price of the total number of shares of Common
Stock so offered
for subscription or purchase would purchase at such Market Price
and the
denominator of which shall be the number of shares of Common
Stock outstanding
immediately prior to the close of business on the date fixed for
such
determination plus the number of shares of Common Stock so
offered for
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subscription or purchase, such reduced amount to become
effective immediately
after the close of business on the date fixed for such
determination. For the
purposes of this clause (b), (i) the number of shares of Common
Stock at any
time outstanding shall not include shares held in the treasury
of the Company
and (ii) in the case of any rights, options or warrants which
expire by their
terms not more than 60 days after the date of issue, sale, grant
or assumption
thereof, no adjustment of the Current Warrant Price shall be
made until the
expiration or exercise of all rights, options or warrants,
whereupon such
adjustment shall be made in the manner provided in this clause
(b), but only
with respect to the shares of Common Stock actually issued
pursuant thereto.
Such adjustment shall be made successively whenever any event
specified above
shall occur. In the event that any or all rights, options or
warrants covered by
this clause (b) are not so issued or expire or terminate before
being exercised,
the Cur
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