26
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
TEL COM WIRELESS CABLE TV CORPORATION
(Name of Issuer)
Common Stock, $.001 Par Value
(Title of class of securities)
879158 10 3
(CUSIP number)
Melvin Rosen
1506 N. E. 162nd Street
North Miami Beach, FL 33162
(305) 947-3010
(Name, address and telephone number of person
authorized to receive notices and communications)
May 19, 1997
(Date of event which requires filing of this statement)
If the filing person as previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box.
Check the following box if a fee is being paid with the
statement (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
(Continued on following pages)
(Page 1 )
(Index to Exhibits at page 6)
CUSIP No. 879158 10 3 SCHEDULE 13D Page 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Melvin Rosen, Social Security No. ###-##-####
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IS DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. SOLE VOTING POWER - 5,301,212
8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER - 5,301,212
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,301,212
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
61.9%
14. TYPE OF REPORTING PERSON*
IN
TEL-COM WIRELESS CABLE TV CORPORATION
Item 1. Securities of the Issuer.
This Statement is related to the shares of common stock
("Common Stock"), par value $.001 per share, of Tel-Com Wireless
Cable TV Corporation (the "Company"), a Florida corporation, and
amends and restates the Report on Schedule 13-D filed by the
Reporting Person for an acquisition of Common Stock of the
Company on February 23, 1996.
The principal executive offices of the Company are located
at 501 N. Grandview Avenue, Suite 201, Daytona Beach, Florida
32118.
Item 2. Identity and Background.
(a) This Statement is filed by Melvin Rosen (the "Reporting
Person").
(b) The business address of the Reporting Person is 1506
N.E. 162nd Street, North Miami Beach, Florida 33162.
(c) The Reporting Person is self-employed and is engaged in
various media-related businesses, including, among others, the
operation of broadcast television in Costa Rica. Effective May
19, 1997, the Reporting Person was appointed as interim President
and Chief Executive Officer of the Company, to serve as such
until the election of officers of the Company at the 1997 annual
meeting of the Board of Directors of the Company ("Board")
immediately following the 1997 annual meeting of the shareholders
of the Company (the "1997 Annual Meeting").
(d) The Reporting Person has not, during the past five (5)
years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) The Reporting Person was not, during the past five (5)
years, a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
(f) The Reporting Person is a citizen of the United States
of America.
Item 3. Source and Amount of Funds or Other
Consideration.
The Reporting Person acquired 121,212 shares of Common Stock
(the "Initial Shares") in exchange for all of the issued and
outstanding shares of capital stock of Grupo Masteri, S.A.
("Grupo"), a Costa Rican corporation, all of which shares of
Grupo were held by the Reporting Person. The acquisition of the
Initial Shares was consummated effective February 23, 1996,
pursuant to the terms of an Amended and Restated Agreement for
Purchase and Sale of Stock by and among the Company, Grupo and
the Reporting Person ("Grupo Purchase Agreement").
Effective May 19, 1997, the Company issued to the Reporting
Person (i) 180,000 shares of Common Stock (the "New Shares"),
(ii) a Secured Convertible Debenture in the principal amount of
$2,000,000 ("Debenture"), and (iii) warrants ("Warrants") to
purchase (a) 500,000 shares of Common Stock at an exercise price
of $5.00 per share, and (b) 500,000 shares of Common Stock at an
exercise price of $1.00 per share (all of the 1,000,000 shares of
Common Stock underlying such Warrants are collectively referred
to as the "Warrant Shares"). The New Shares, the Debenture and
the Warrants were issued pursuant to the terms of a Debt
Restructuring Agreement ("Restructuring Agreement") dated
effective May 19, 1997, in connection with the restructuring of
indebtedness evidenced by a promissory note dated February 23,
1996, in the principal amount of $2,000,000 issued by the
Company.
The Debenture matures and is payable in full on May 19,
1998, subject to optional extension by either the Company or the
Reporting Person on certain terms and conditions. The Debenture
is convertible into shares of Common Stock ("Debenture Shares")
at any time prior to payment at a conversion rate which is equal
to the lesser or (i) $0.50 per share, or (ii) the average of the
closing "bid" prices for the Company's Common Stock as quoted on
NASDAQ for the five days immediately preceding the date of
conversion.
The Warrants are exercisable in part or in total at any time
prior to expiration on May 19, 2002. The Initial Shares, the New
Shares, the Debenture Shares, and the Warrant Shares are
sometimes collectively referred to herein as the "Shares."
Item 4. Purpose of the Transaction.
The Reporting Person acquired his interest in the Initial
Shares for investment purposes. Pursuant to the terms of the
Grupo Purchase Agreement, the Reporting Person has the right to
serve as a director on the Board until February 23, 1998, which
is two (2) years from the closing date of the Grupo Purchase
Agreement.
The Reporting Person also acquired his interest in the New
Shares, the Debenture Shares and the Warrant Shares primarily for
investment purposes. Effective May 19, 1997, the Reporting
Person was appointed as interim President and Chief Executive
Officer to hold office until the 1997 annual meeting of the Board
of Directors immediately following the 1997 Annual Meeting. The
Restructuring Agreement provides that (i) the Company will amend
its bylaws to increase the number of directors to five (5), (ii)
the Company will elect two (2) individuals designated by the
Reporting Person as members of the Board immediately following
the execution of the Restructuring Agreement, and (iii) the
Reporting Person will retain the right to designate two directors
to serve on the Board until such time as the indebtedness
evidenced by the Debenture has been paid in full or has been
converted to Common Stock. The Reporting Person has designated,
and the Company has elected Samuel H. Simkin and the Reporting
Person to serve as members of the Board until the 1997 Annual
Meeting. Additionally, the Board has elected the Reporting
Person to serve as interim President and Chief Executive Officer
until the election of officers at the 1997 annual meeting of
directors immediately following the 1997 Annual Meeting. Except
for the foregoing, the Reporting Person has no present plans or
proposals which relate to or would result in:
(a) the acquisition or disposition by the Reporting Person
of additional securities of the Company, except as may be
acquired upon conversion of the Debenture or exercise of the
Warrants;
(b) an extraordinary corporate transaction, such as a
merger, reorganization, or liquidation involving the Company or
any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries;
(d) any change in the present Board or management of the
Company, including any plans or proposals to change the number or
terms of directors;
(e) any material change in the present capitalization or
dividend policy of the Company;
(f) any material change in the Company's present business
or corporate structure;
(g) changes in the Company's present articles of
incorporation, bylaws, or similar instruments;
(h) causing a class of securities of the Company to be
delisted from a national securities exchange or inter-dealer
quotation system;
(i) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended; or
(j) any action similar to those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person beneficially owns 5,301,212 shares
of Common Stock or 61.93% of the outstanding Common Stock of the
Company, based upon (i) 2,196,212 shares of common stock
outstanding as of May 18, 1997, as reported in the Company's
Annual Report on Form 10-KSB for the year ended December 31,
1996, and as otherwise known to the Reporting Person, (ii) the
subsequent issuance of the 180,000 New Shares to the Reporting
Person, (iii) the issuance of 1,183,431 shares upon conversion of
outstanding shares of Series A Preferred Stock and Series B
Preferred Stock of the Company, and (iv) assuming the issuance of
4,000,000 Debenture Shares upon conversion of the Debenture and
1,000,000 Warrant Shares upon exercise of the Warrants.
(b) The Reporting Person has the sole power to vote and
dispose of the Shares.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings, or
Relationships with Respect to Securities of the Issuer.
(a) The Initial Shares were acquired by the Reporting
Person pursuant to the Grupo Purchase Agreement. The provisions
of the Grupo Purchase Agreement, a copy of which was filed as
Exhibit 1 to the Initial Statement, are incorporated herein by
reference. The New Shares, the Debenture and the Warrants were
acquired by the Reporting Person pursuant to the Restructuring
Agreement. The provisions of the Restructuring Agreement, the
Debenture and the Warrants, copies of which are filed as Exhibits
1, 2, 3, and 4 respectively, to this Statement, are incorporated
herein by reference.
Item 7. Material to be Filed as Exhibits.
The following documents are filed as exhibits to this
Statement:
1. The Amended and Restated Stock Purchase Agreement dated
February 23, 1996, by and among the Company, Grupo and the
Reporting Person was filed as Exhibit 1 to the Initial Statement
dated March 1, 1997 and is incorporated herein by reference.
2. The Debt Restructuring Agreement dated effective May
19, 1997, by and between the Company and the Reporting Person is
filed as Exhibit 1.
3. The Debenture dated May 19, 1997, issued by the Company
to the Reporting Person in the principal amount of $2,000,000 is
filed as Exhibit 2.
4. Warrant dated May 19, 1997, for the purchase of 500,000
shares of the Company's Common Stock at an exercise price of
$5.00 per share, issued by the Company to the Reporting Person is
filed as Exhibit 3.
5. Warrant dated May 19, 1997, for the purchase of 500,000
shares of the Company's Common Stock at an exercise price of
$1.00 per share, issued by the Company to the Reporting Person is
filed as Exhibit 4.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Statement is true, complete, and correct.
June 4, 1997
/s/ Melvin Rosen
Melvin Rosen
EXHIBIT 1
DEBT RESTRUCTURING AGREEMENT
This Agreement is entered into this 19th day of May, 1997,
by and between TEL-COM WIRELESS CABLE TV CORPORATION ("Company"),
a Florida corporation, and MELVIN ROSEN ("Rosen"), an individual.
Background of Agreement
Rosen is the holder of a Promissory Note dated February 23,
1996, in the principal amount of Two Million Dollars ($2,000,000)
made by the Company (the "Note") which became due on February 23,
1997.
The Company has failed to pay the Note when it became due.
The parties desire to restructure the indebtedness evidenced
by the Note upon the terms and conditions set forth herein.
Terms of Agreement
In consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. Acknowledgment of Indebtedness. The Company
acknowledges that, as of the date of this Agreement, the
principal balance outstanding on the Note is Two Million Dollars
($2,000,000), (the "Initial Indebtedness").
2. Restructuring of Debt. An amount representing accrued
but unpaid interest on the Note, attorneys' fees of Rosen as set
forth in Section 11 below, and the trustee's fees due under the
Tel-Com-Rosen Trust, which, in the aggregate, may not exceed
$100,000, shall be added to the Initial Indebtedness within
thirty (30) days of the date hereof (the Initial Indebtedness and
accrued Trustee's fees are collectively referred to hereinafter
as the "Indebtedness"). The Initial Indebtedness shall be
evidenced by a new secured convertible debenture (the
"Debenture") in the principal amount of Two Million Dollars
($2,000,000), containing the terms and conditions set forth in
the form of Debenture attached hereto as Exhibit A .
3. Consideration for Restructuring. As consideration for
Rosen's restructuring of the Initial Indebtedness, the Company
will issue to Rosen:
(a) 180,000 fully paid and non-assessable shares of
its Common Stock ("New Rosen Shares"). The Company shall bear
all cost and expenses incurred or associated with the issuance to
Rosen of the New Rosen Shares.
(b) A Warrant to purchase 500,000 Shares of Common
Stock at an exercise price of $1.00 per share (the "$1.00
Warrants").
(c) A Warrant to purchase 500,000 Shares of Common
Stock at an exercise price of $5.00 per share (the "$5.00
Warrants").
4. Representations of Rosen. Rosen hereby represents and
warrants to the Company as follows:
4.1 Receipt of Certain Information. Rosen has
received a copy of each of the following: the Company's Form 10-
KSB for the years ended December 31, 1995 and 1996; the Post-
Effective Amendment No. 2 to the Company's Registration Statement
on Form SB-2 filed with the United States Securities and Exchange
Commission ("SEC") on January 21, 1997; The Company's quarterly
report on Form 10-QSB for the quarter ended March 31, 1997; the
Company's 1995 Annual Report to Shareholders; the Company's Proxy
Statement for the annual meeting of shareholders held on May 30,
1996; the press releases issued by the Company during the 1996
calendar year; and the Company's Articles of Incorporation and
Bylaws, each as amended to date .
4.2. Availability of Information. The Company has made
available to Rosen the opportunity to ask questions of, and
receive answers from, the Company and any other person or entity
acting on its behalf concerning the terms and conditions of this
Agreement, the restructuring of the Note, the Conversion Rights
under the Debenture, and the information contained in the
Company's filings with the SEC and to obtain any additional
information, to the extent the Company possesses such information
or can acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information provided by
the Company and any other person or entity acting on its behalf.
4.3 Investment Representations. As an inducement to
the Company's agreement to issue the new Rosen Shares, the $1.00
Warrants and the $5.00 Warrants and to provide for the right to
convert the Debenture into common stock of the Company
("Conversion Shares"), Rosen makes the following representations
and warranties:
(a) Rosen (i) has adequate means of providing for
his current needs and possible contingencies, and has no need for
liquidity of his investment in the Company, (ii) can bear the
economic risk of losing this entire investment in the Company,
and (iii) has such knowledge and experience in financial and
business matters that he is capable of evaluating the relative
risks and merits of this investment.
(b) Rosen is an accredited investor as defined in
Rule 501(a) of Regulation D promulgated under the Act;
(c) The New Rosen Shares, $1.00 Warrants, and
$5.00 Warrants, are being, and any Conversion Shares will be,
acquired solely for Rosen's own account, for investment purposes
only, and are not being or will not be purchased with a view or
intent to or resell, fractionalize, divide, or redistribute all
or any part of such shares to any other person or entity.
(d) Rosen is aware of the following:
(i) The New Rosen Shares, $1.00 Warrants,
$5.00 Warrants and the Conversion Shares are or will be a
speculative investment which involve a high degree of risk; and
(ii) Unless and until a registration
statement has been filed and become effective for the New Rosen
Shares, the Conversion Shares and the Shares of Common Stock
underlying the $1.00 Warrants and the $5.00 Warrants, the New
Rosen Shares have not been, and the Conversion Shares and Shares
of Common Stock underlying the $1.00 Warrants and $5.00 Warrants
will not have been, registered under the Act or the securities or
investor protection laws of applicable jurisdictions, but have
been offered in reliance on exemptions for private offerings
contained in Section 4(2) and Rules 504, 505 or 506 of the Act
and in the laws of such jurisdictions. There are substantial
restrictions on the transferability of the New Rosen Shares and
the $1.00 Warrants and $5.00 Warrants; unless and until the New
Rosen Shares, the $1.00 Warrants, and the $5.00 Warrants, and the
Conversion Shares are registered under the Act, there will be no
public market for such Shares; and it may not be possible for
Rosen to liquidate the New Rosen Shares, the $1.00 Warrants, and
the $5.00 Warrants or Conversion Shares so that Rosen may have to
bear the economic risk of such investment in the Company for an
indefinite period of time.
(iii) The New Rosen Shares, the $1,00
Warrants, the $5.00 Warrants, and the Conversion Shares cannot be
offered or sold unless they are subsequently registered under the
Act and applicable state securities laws or an exemption from
such registration is available. Until such registration, the New
Rosen Shares, the $1.00 Warrants, the $5.00 Warrants, and the
Conversion Shares will bear a legend to the following effect:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAWS, HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY, AND SHALL NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE
TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, BY THE
HOLDER EXCEPT UPON THE ISSUANCE TO THE COMPANY OF A
FAVORABLE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE
AS MAY BE SATISFACTORY TO COUNSEL FOR THE COMPANY, IN
EITHER CASE, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL
NOT BE IN VIOLATION OF THE ACT AND APPLICABLE STATE
SECURITIES LAWS.
5. Representations and Warranties of the Company. The
Company hereby makes the following representations and warranties
to Rosen, each of which the Company represents to be true and
correct on the date hereof (any Schedules to be attached to be
delivered as promptly as practicable after the date of this
Agreement):
5.1 Corporate Organization. The Company is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Florida and has full
corporate power, authority and legal right to own its properties
and to conduct the business in which it is now engaged as and
where such business is conducted. The Company is duly licensed
or qualified to transact business as a foreign corporation and is
in good standing in each jurisdiction where the ownership or
lease of its assets or the operation of its business requires
such qualification, except where the failure to be so qualified
would not have a material adverse effect on the business,
operations, property or financial or other condition of the
Company. Accurate, current and complete copies of the Articles
of Incorporation and Bylaws of the Company, the contents of the
Company's minute book, stock certificate books and stock transfer
ledgers, and, if any, all fictitious name registrations of the
Company have been made available to Rosen or his representative
at or prior to the execution of this Agreement. The Company's
minute book contains true and complete minutes and records of all
meetings, proceedings, and other actions of its shareholders and
directors from the date of its organization to the date hereof.
To the knowledge of the Company, the stock certificate books and
stock transfer ledgers of the Company (which are maintained by
Continental Stock Transfer and Trust Company, the Company's
transfer agent) are true and complete and accurately reflect the
stock ownership of the Company as of the date hereof.
5.2 Capitalization. The authorized capital stock of
the Company consists of (i) 5,000,000 shares of Preferred Stock,
$.001 par value, of which 200 shares designated as Series A
Convertible Preferred Stock are issued and outstanding and 100
shares designated as Series B Convertible Preferred Stock are
issued and outstanding; and (ii) 10,000,000 shares of Common
Stock, $.001 par value, of which approximately 2,196,212 shares
are issued and outstanding. The holders of outstanding capital
stock of the Company have no preemptive rights. All of the
issued and outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and nonassessable and
are owned of record and beneficially by the holders thereof as
set forth on Schedule 5.2 hereto. Except as set forth on
Schedule 5.2, there are no subscriptions, options, warrants,
rights or calls or other commitments or agreements to which the
Company is a party or by which it is bound, calling for the
issuance, transfer, sale or other disposition of any class of
securities of the Company, and there are no outstanding
securities of the Company convertible or exchangeable, actually
or contingently, into shares of the Company's common stock or any
other securities of the Company. All transfer taxes, if any,
with respect to transfers of capital stock of the Company made
prior to the date hereof have been paid.
5.3 Subsidiaries. Schedule 5.3 hereto sets forth a
complete list of the names, jurisdictions of incorporation and
capital stock of all corporations, partnerships and other
business entities controlled by the Company (collectively, the
"Subsidiaries"). (As used herein, "controlled by" means (i) the
ownership of not less than 50% of the voting securities or other
interests of a corporation, partnership or other business entity,
or (ii) the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
corporation, partnership or other business entity, whether
through ownership of voting shares, by contract or otherwise).
Each of the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation and has the corporate power to carry on its
business as and where now conducted and to own its assets. Each
of the Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in the jurisdictions set
forth on Schedule 5.3, such jurisdictions being the only foreign
jurisdictions in which the failure to qualify would have a
material adverse effect on such Subsidiary and its respective
assets, properties or businesses, and there has not been any
claim by any jurisdiction to the effect that it is required to
qualify or otherwise be authorized to do business as a foreign
corporation therein. All of the outstanding capital stock of
each of the Subsidiaries is validly issued, fully paid and non-
assessable and all of such shares that are owned by the Company
or by a Subsidiary are free and clear of all liens, claims,
charges or encumbrances of any nature whatsoever, except as
stated on Schedule 5.3. There are no outstanding securities
convertible into shares of capital stock or any subscriptions,
options, warrants, rights or calls, or other commitments or
agreements to which Company or any of the Subsidiaries is a party
or by which it or any of them are bound, calling for the
issuance, transfer, sale or disposition of any of the capital
stock or other securities of any of such Subsidiaries except as
set forth on Schedule 5.3. Copies of the Articles or Certificate
of Incorporation and Bylaws, as amended to date, of each of the
Subsidiaries, which have heretofore been delivered to Rosen prior
to the date of this Agreement, are true and complete copies of
those documents, as in effect on the date hereof. Except as set
forth in Schedule 5.3 and except for investments in the
Subsidiaries, neither the Company nor any of the Subsidiaries
have made any investments in, or own, any of the capital stock
of, or any other proprietary interest in, any other corporation,
partnership or other business entity.
5.4 Authority. The Company has full corporate power
and authority to execute and deliver this Agreement and to
perform all of its covenants and agreements hereunder. The
execution and delivery of this Agreement by the Company, the
performance by the Company of its covenants and agreements
hereunder and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action pursuant to applicable law, and said
authorization and approval has not been altered, amended or
revoked.
5.5 Enforceability. This Agreement has been duly
executed and delivered and constitutes the valid and legally
binding obligation of the Company, enforceable against the
Company in accordance with its terms except as such
enforceability may be limited by (i) bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of
creditors' rights generally or by the principles governing the
availability of specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is
considered in equity or at law), including requirements of
reasonableness and good faith in the exercise of rights and
remedies thereunder; and (ii) applicable laws and court decisions
which may limit or render unenforceable certain terms and
provisions contained therein, but which do not substantially
interfere with the practical realization of the benefits thereof,
except for the economic consequences of any procedural delay
which may be imposed by, relate to or result from such laws and
court decisions.
5.6 Noncontravention. Neither the execution and
delivery of this Agreement, nor compliance by the Company with
any of the provisions hereof, nor the consummation of the
transactions contemplated hereby, will:
(a) violate or conflict with any provision of the
Articles of Incorporation or Bylaws of the Company or any of the
Subsidiaries;
(b) violate or, alone or with notice or the
passage of time, result in the material breach or termination of,
or otherwise give any contracting party the right to terminate,
or declare a default under, the terms of any agreement or other
document or undertaking, oral or written, to which the Company or
any of the Subsidiaries are a party or by which any of them or
any of their respective properties or assets may be bound (except
for such violations, conflicts, breaches or defaults as to which
required waivers or consents by other parties have been
obtained);
(c) result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or
assets of the Company or any of the Subsidiaries except as
contemplated by this Agreement;
(d) violate any judgment, order, injunction,
decree or award against, or binding upon, the Company or any of
the Subsidiaries or their respective properties or assets; or
(e) to the knowledge of the Company, violate any
law or regulation of any jurisdiction relating to the Company or
any of the Subsidiaries, or their respective securities, assets
or properties, the violation of which would have a material
adverse effect on the Company or any of the Subsidiaries
("Material Adverse Effect").
5.7 Conversion Shares; New Rosen Shares. The Common
Stock has been duly authorized and reserved for issuance and, if
and when issued upon conversion of the Debenture in accordance
with the terms thereof and the $1.00 Warrants and $5.00 Warrants
if and when issued in accordance with the terms thereof, as well
as the New Rosen Shares when issued, will be duly and validly
authorized and issued, fully paid and nonassessable.
5.8 Consents. The Company has all consents of
governmental and other regulatory agencies, foreign or domestic,
and of other third parties required to be received by or on the
part of the Company or the Subsidiaries to enable the Company to
enter into, and perform its obligations under, this Agreement.
All such requisite consents have been, or prior to the
consummation of the transactions contemplated herein will have
been, obtained.
5.9. Financial Statements, etc. The audited
consolidated financial statements of the Company and the
Subsidiaries as of December 31, 1996 and 1995 and for the years
then ended (the "Company Financial Statements"), (a) are true,
correct and complete, (b) are in accordance with the books and
records of Company and the Subsidiaries, (c) fairly, completely
and accurately present the financial position of the Company and
the Subsidiaries as of such dates and the results of its
operations for such periods, and (d) were prepared in conformity
with generally accepted accounting principles consistently
applied throughout the periods covered thereby and with
Regulation S-B, promulgated by the Securities and Exchange
Commission (the "SEC"). Such audited consolidated financial
statements have been audited by independent certified public
accountants, whose report thereon is included therein.
5.10. Liabilities; Judgments. As of December 31,
1996, (the "Company Balance Sheet Date"), the Company and the
Subsidiaries have no material debts, liabilities or obligations,
contingent or absolute, other than those debts, liabilities and
obligations reflected or reserved against in the Company's
consolidated balance sheet at the Company Balance Sheet Date (the
"Company Balance Sheet") . There is no outstanding judgment
against the Company or any of the Subsidiaries or against or
affecting any of their respective assets or businesses.
5.11 Actions Since the Company Balance Sheet Date.
Except as otherwise expressly provided or set forth in, or
required by, this Agreement, or as set forth in Schedule 5.11
hereto, since the Company Balance Sheet Date, neither the Company
nor any of the Subsidiaries have: (a) issued or sold, or agreed
to issue or sell, any of their capital stock, options, warrants,
rights or calls to purchase such stock, any securities
convertible or exchangeable into such capital stock or other
corporate securities, or effected any subdivision or other
recapitalization affecting its capital stock other than in
connection with the transactions contemplated by this Agreement;
(b) incurred any material obligation or liability, absolute or
contingent, except those arising in the ordinary and usual course
of business or in connection with the transactions contemplated
hereby; (c) discharged or satisfied any lien or encumbrance,
except in the ordinary and usual course of business, or paid or
satisfied any liability, absolute or contingent, other than
liabilities as of the Company Balance Sheet Date and current
liabilities incurred since the Company Balance Sheet Date in the
ordinary and usual course of business; (d) made any wage or
salary increases or granted any bonuses other than wage and
salary increases and bonuses granted in accordance with its
normal salary increase and bonus policies; (e) mortgaged, pledged
or subjected to any lien, pledge, charge or other encumbrance of
any of their properties or assets, or permitted any of their
property or assets to be subjected to any lien, pledge, charge or
other encumbrance, except in the ordinary and usual course of
business or as contemplated by this Agreement; (f) sold, assigned
or transferred any of their properties or assets, except in the
ordinary and usual course of business; (g) other than this
Agreement or the transactions contemplated hereby, entered into
any transaction or course of conduct not in the ordinary and
usual course of business; (h) waived any rights of substantial
value, or canceled, modified or waived any indebtedness for
borrowed money held by them, except in the ordinary and usual
course of business; (i) declared, paid or set aside any dividends
or other distributions or payments on their capital stock, or
redeemed or repurchased, or agreed to redeem or repurchase, any
shares of their capital stock; (j) made any loans or advances to
any person, or assumed, guaranteed, endorsed or otherwise become
responsible for the obligations of any person; (k) incurred any
indebtedness for borrowed money (except endorsement, for
collection or deposit, of negotiable instruments received in the
ordinary and usual course of business); or (l) made any change in
the accounting methods or practices followed by the Company or
the Subsidiaries.
5.12 Adverse Developments. Since the Company Balance
Sheet Date, there have been no material adverse changes in the
assets, properties, operations or financial condition of the
Company or the Subsidiaries, and no event has occurred that could
be reasonably expected to have a material adverse effect upon the
business of the Company or the Subsidiaries and the Company is
not aware, after reasonable inquiry, of any development or
threatened development of a nature that has, or that could be
reasonably expected to have, a material adverse effect upon the
business of the Company or the Subsidiaries or upon any of their
respective assets, properties, operations or financial condition
except for default of the Note.
5.13. Taxes; Tax Returns. Except as set forth in
Schedule 5.13 hereto, all taxes, including, without limitation,
income, property, sales, use, franchise, capital stock, excise,
value added, employees' income withholding, social security and
unemployment taxes imposed by the United States, by any state,
locality or foreign country, or by any other taxing authority,
which have or may become due or payable by the Company or the
Subsidiaries and all interest and penalties thereon, whether
disputed or not, have been paid in full or adequately provided
for by reserves shown in the Company Financial Statements; all
deposits required by law to be made by the Company or the
Subsidiaries with respect to estimated income, franchise and
employees' withholding taxes have been duly made; and all tax
returns, including estimated tax returns, required to be filed by
the Company or any of the Subsidiaries have been duly filed. No
extension of time for the assessment of deficiencies for any year
is in effect. Except as set forth in Schedule 5.13, no
deficiency notice or imposition of any tax lien is proposed, or
to the knowledge of the Company, after reasonable inquiry, is
threatened against the Company or the Subsidiaries. The federal
and state income tax returns of the Company and the Subsidiaries
have never been audited.
5.14 Ownership of Assets; Trademarks, Patents, etc.
Except as set forth in Schedule 5.14, each of the Company and the
Subsidiaries owns outright, and has good and marketable title to,
all of its respective assets, properties and businesses
(including all assets reflected in the Company Balance Sheet,
except as the same may have been disposed of in the ordinary and
usual course of business since the Company Balance Sheet Date),
free and clear of all liens, mortgages, pledges, claims,
conditional sales agreements, restrictions on transfer or other
encumbrances or charges whatsoever. Except as set forth in
Schedule 5.14, no other person, firm or corporation has any
proprietary or other interest in any such intangible assets.
Such assets so owned are sufficient to permit the Company and the
Subsidiaries to conduct their respective businesses as and where
now conducted. Except as set forth in Schedule 5.14, neither the
Company nor any of the Subsidiaries is a party to or bound by any
license or agreement requiring the payment to any person, firm or
corporation of any royalty. To the knowledge of the Company
neither the Company nor any of the Subsidiaries are infringing
upon any patent, copyright, tradename, trademark, trade secret or
other similar intangible right or otherwise are violating the
rights of any third party with respect thereto, and no
proceedings have been instituted and no claim has been received
by the Company or any of the Subsidiaries alleging any such
violation.
5.15 Insurance. Schedule 5.15 hereto sets forth a
true and complete list and brief description of all policies of
fire, liability and other forms of insurance held by the Company
and the Subsidiaries. Except as set forth in Schedule 5.15, all
policies of fire, liability and other forms of insurance held by
the Company and the Subsidiaries are valid, outstanding and
enforceable policies, as to which premiums have been paid
currently, are with reputable insurers believed by the Company,
after reasonable inquiry, to be financially sound and are
consistent with the practices of similar concerns engaged in
substantially similar operations as those currently conducted by
the Company and the Subsidiaries. Except as set forth in
Schedule 5.15, the Company is not aware of any state of facts or
of the occurrence of any event that might reasonably (a) form the
basis for any material claim against the Company or any of the
Subsidiaries not fully covered by insurance for liability on
account of any express or implied warranty or tortious omission
or commission, or (b) result in a material increase in insurance
premiums.
5.16 Compliance with Law. Except as set forth in
Schedule 5.16 hereto, there are no actions, suits, proceedings or
governmental investigations relating to the Company or the
Subsidiaries or any of their respective properties, assets or
businesses pending or, to the knowledge of the Company, after
reasonable inquiry, threatened, or any order, injunction, award
or decree outstanding against the Company or any of the
Subsidiaries or against or relating to any of their respective
properties, assets or businesses; and the Company is not aware of
any basis for any such action, suit, proceeding, governmental
investigation, order, injunction or decree. Neither the Company
nor any of the Subsidiaries is in violation of any law,
regulation, ordinance, order, injunction, decree, award, or other
requirement of any governmental body, court or arbitrator
relating to their respective properties, assets or business, the
violation of which would have a material adverse effect on the
Company or the Subsidiaries.
5.17 Real Property. Schedule 5.17 hereto sets forth a
brief description of all real properties that are leased to the
Company or any of its Subsidiaries. Neither the Company nor any
of the Subsidiaries own outright the fee simple title in and to
any real property. The real property leases described in
Schedule 5.17 that relate to the leased properties described
therein are in full force and effect. Except as set forth in
Schedule 5.17, all uses of such real property by the Company or
the Subsidiaries conform in all material respects to the terms of
the leases relating thereto and, to the best knowledge of the
Company conform in all material respects to all applicable
building and zoning ordinances, laws and regulations. None of
such leases may be expected to result in the expenditure of
material sums for the restoration of the premises upon the
expiration of their respective terms.
5.18 Agreements and Obligations; Performance. Except
as listed and briefly described in Schedule 5.18 hereto (the
"Company Listed Agreements"), neither the Company nor any of the
Subsidiaries are party to, or bound by, any: (a) written or oral
agreement or other contractual commitment, understanding or
obligation that involves aggregate payments or receipts in excess
of $20,000 (b) contract, arrangement, commitment or understanding
that involves aggregate payments or receipts in excess of $20,000
that cannot be canceled on 30 days' or less notice without
penalty or premium or any continuing obligation or liability; (c)
contractual obligation or contractual liability of any kind to
any shareholders of the Company or the Subsidiaries; (d)
contract, arrangement, commitment or understanding with their
customers or any officer, employee, shareholder, director,
representative or agent thereof for the repurchase of products,
sharing of fees, the rebating of charges to such customers or
other similar arrangements; (e) contract for the purchase or sale
of any materials, products or supplies that contains, or that
commits or will commit them for, a fixed term; (f) management
agreement not terminable at will without penalty or premium or
any continuing obligation or liability; (g) lease for real or
personal property (including borrowings thereon), license or
royalty agreement; (h) agreement, commitment or understanding
relating to indebtedness for borrowed money; (i) union or other
collective bargaining agreement; (j) contract that, by its terms,
requires the consent of any party thereto to the consummation of
the transactions contemplated hereby; (k) contract containing
covenants limiting the freedom of the Company or any of the
Subsidiaries to engage or compete in any line or business or with
any person or entity in any geographical area; (l) contract or
option relating to the acquisition or sale of any business; (m)
voting trust agreement or similar shareholders' agreement; (n)
option for the purchase of any asset, tangible or intangible; or
(o) other contract, agreement, commitment or understanding that
materially affects any of the Company's or any of the
Subsidiaries' respective properties, assets or businesses,
whether directly or indirectly, or that was entered into other
than in the ordinary course of business. A true and correct copy
of each of the written Company Listed Agreements has been made
available to Rosen. Except as set forth on Schedule 5.18, each
of the Company and the Subsidiaries has in all material respects
performed all obligations required to be performed by each of
them to date under all of the Company Listed Agreements, is not
in default in any material respect under any of the Company
Listed Agreements, and has received no notice of any default or
alleged default thereunder which has not heretofore been cured or
which notice has not heretofore been withdrawn. Except as set
forth on Schedule 5.18, the Company is not aware, after
reasonable inquiry, of any material default under any of the
Company Listed Agreements by any other party thereto or by any
other person, firm or corporation bound thereunder except as set
forth in the Company Financial Statements.
5.19 Condition of Assets. Except for routine servicing
requirements, all machinery and equipment used by the Company or
the Subsidiaries in the conduct of their respective businesses
are in good operating condition and repair, ordinary wear and
tear excepted.
5.20 Accounts. Set forth on Schedule 5.20 hereto is an
accurate and complete list showing the name and address of each
bank or brokerage firm in which the Company or any of its
subsidiaries has an account or safe deposit box, the number of
any such account or any such box and the names of all persons
authorized to draw thereon or to have access thereto.
5.21 Accounts Receivable. All of the accounts
receivable of the Company as of March 31, 1997, except those owed
to it since such date constitute bona fide accounts receivable
resulting from bona fide sales of services or goods in the
ordinary course of its business, and the Company does not know,
nor does it have reason to know of any valid defense or right of
set-off to the rights of the Company to collect such accounts
receivable in full, less such reserves.
5.22 Accounts Payable. Schedule 5.22 hereto contains a
true and accurate aging schedule of all accounts payable of the
Company and the Subsidiaries as of March 31, 1997. Except as
disclosed on Schedule 5.22, (i) each account payable of the
Company represents an obligation incurred in the ordinary course
of business for goods sold to, or for bona fide services
performed for, the Company or the Subsidiaries; and (ii) no claim
for reduction, counterclaim, setoff, recoupment or other claim
for credit, allowances or adjustments has been made by the
Company or any of the Subsidiaries with respect to any such
accounts payable.
5.23 Permits and Licenses. The Company and the
Subsidiaries have all permits, licenses, orders and approvals of
all federal, state, local and foreign governmental or regulatory
bodies required to carry on their businesses as and where
currently conducted and to sell their services and products; all
such permits, licenses, orders, franchises and approvals are in
full force and effect, and to the knowledge of the Company, no
suspension or cancellation of any of such permits, licenses,
orders, franchises and approvals is threatened; and each of the
Company and the Subsidiaries are in compliance in all material
respects with all requirements, standards and procedures of the
federal, state, local and foreign governmental bodies that have
issued such permits, licenses, orders, franchises and approvals.
5.24 Interest in Assets. Except as set forth in
Schedule 5.24 hereto, no shareholder, officer or director of
capital stock of the Company or any of the Subsidiaries nor any
affiliate thereof owns any property or rights, tangible or
intangible, used in or related, directly or indirectly, to the
business of the Company and the Subsidiaries.
5.25 Salary Information. Schedule 5.25 hereto contains
a true and complete list of the names and current salary rates of
and bonus commitments to all present officers and directors of
the Company and each of the Subsidiaries and all other employees
whose base annual compensation exceeds $50,000 and a list of all
employees (and home addresses) whose base annual compensation
exceeds $20,000.
5.26 Labor Matters. Except as set forth in Schedule
5.26 attached hereto, neither the Company nor any of the
Subsidiaries has been a party to or has any Obligation with
respect to: (1) any profit sharing, pension, retirement, deferred
compensation, bonus, stock option, stock purchase, retainer,
consulting, health, welfare or incentive plan or agreement or
other employee benefit plan, whether legally binding or not; or
(ii) any plan providing for "fringe benefits" to its employees,
including, but not limited to, vacation, disability, sick leave,
medical, hospitalization and life insurance and other insurance
plans, or related benefits; or (iii) any employment agreement.
To the best of the Company's knowledge and belief, no former or
present employee of the Company or any of the Subsidiaries has
any claim against the Company or the respective Subsidiary
(whether under federal or state law, any employment agreement or
otherwise) on account of or for: (i) overtime pay; (ii) wages or
salary for any period; (iii) vacation, time off or pay in lieu of
time off; or (iv) any violation of any statute, ordinance or
regulation relating to minimum wages or maximum hours of work.
To the best of the Company's knowledge or belief, no person or
party (including, but not limited to, governmental agencies of
any kind) has any claim or basis for any claim or proceeding
against the Company or any of the Subsidiaries arising out of any
statute, ordinance or regulation relating to discrimination in
employment or to employment practices, sexual harassment, or
occupational safety or health standards.
5.27 Improper Payments. Neither the Company or the
Subsidiaries, nor any of their respective current or former
shareholders, partners, directors, officers, or employees or
agents, nor any Person acting on their behalf, has directly or
indirectly, made any bribe, kickback or other payment of a
similar or comparable nature, whether lawful or not, to any
person, public or private, regardless of form, whether in money,
property or services, to obtain favorable treatment for business
secured or special concessions already obtained. No funds or
assets of the Company or any Subsidiary were donated, loaned or
made available directly or indirectly for the benefit of, or for
the purpose of supporting or opposing, any government or
subdivision thereof, political party, candidate or committee,
either domestic or foreign. Neither the Company nor any
Subsidiary has maintained and does not maintain a bank account,
or any other account of any kind, whether domestic or foreign,
which account was not or is not reflected in the Company or the
respective Subsidiary's corporate books and records, or which
account was not listed, titled or identified in the name of the
Company or the respective Subsidiary.
5.28 SEC Filings, Etc. The Company has heretofore
delivered to Rosen or his representatives or advisors correct and
complete copies of all publicly-available documents, records and
books pertaining to the Company, including but not limited to,
the Company's Annual Report on Form 10-KSB for the year ended
December 31,1996 (the "Form 10-KSB") and all amendments to said
document (the "SEC Documents"). The SEC Documents were true and
correct in all material respects at the time filed with respect
to the periods covered thereby; and such reports, as amended,
supplemented, or updated by subsequent filings, are true and
correct as of the date so amended, supplemented or updated in all
material respects, do not contain any misstatement of a material
fact and do not omit to state a material fact or any fact
required to be stated therein or necessary to make the statements
contained therein not materially misleading with respect to the
periods covered thereby; and all amendments or supplements
thereto required to be filed under the federal securities laws
have been so filed. The consolidated financial statements of the
Company included in the SEC Documents complied, when filed, with
the then-applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods
involved (except as may have been indicated in the notes thereto
or, in the case of the unaudited statements, as permitted by Form
10-QSB promulgated by the SEC) and fairly presented (subject in
the case of the unaudited statements, to normal audit
adjustments) the financial position of the Company at the dates
thereof and the consolidated results of the operations and
statement of changes in financial position for the periods then
ended. The Company has filed all documents and agreements that
were required to be filed as exhibits to the SEC Documents and
all such documents and agreements when filed were correct and
complete in all material respects.
5.29 Related Party Transactions. Except to the extent
described in the SEC Documents, no current principal shareholder
or current or former director, officer or employee of the Company
nor any "affiliate" (as defined in the rules and regulations
promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of any such person, is currently, directly
or indirectly through his affiliation with any other person or
entity, a party to any transaction (other than as an employee,
consultant or shareholder) with the Company providing for the
furnishing of services by, or rental of real or personal property
from, or otherwise requiring cash payments from or to any such
person.
5.30 Disclosure. The representations or warranties
made by the Company in this Agreement or in any Schedule hereto
do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they are
made, not misleading in any material respect. There is no fact
known to the Company that materially adversely affects or, other
than general economic conditions in the industry in which the
Company or the Subsidiaries operates, that the Company reasonably
believes will in the future materially adversely affect the
business, operations, affairs or condition, financial or
otherwise, of the Company or any of the Subsidiaries which has
not been set forth in this Agreement or in the SEC Documents.
5.31 Survival of Representations and Warranties. All
representations and warranties made by the Company in this
Agreement or pursuant hereto shall survive the date hereof and
the consummation of the transactions contemplated hereby.
6. Indemnification
6.1 In addition to, and not in lieu of, any right or
remedy available to Rosen at law or in equity, the Company hereby
indemnifies and holds harmless Rosen against any losses, claims,
damages, expenses, liabilities (joint or several), assessments,
and any other charges (including without limitation reasonable
attorneys' fees, paralegal's fees, investigation expenses, court
costs, interest and penalties) arising out of or in connection
with, or caused by, directly or indirectly, any or all of the
following: (i) any misrepresentation, breach or failure of any
warranty or representation made by the Company in this Agreement
or schedules attached hereto; or (ii) any failure or refusal by
the Company to satisfy or perform any covenant or agreement in
this Agreement. The Company will reimburse Rosen, promptly as
such expenses are incurred, for any legal or other expenses
reasonably incurred by him in connection with investigating or
defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that the indemnity agreement
contained in this section shall not apply to amounts paid in
settlement of any such loss, claim, damage, expense, liability,
action or proceeding if such settlement is effected without the
consent of the Company, which consent shall not be unreasonably
withheld.
6.2 Promptly after receipt by Rosen of notice of the
commencement of any action (including any governmental action),
Rosen shall, if a claim in respect thereof is to be made against
the Company under this section, deliver to the Company a written
notice of the commencement thereof and the Company shall have the
right to participate in and, to the extent the Company so
desires, to assume control of the defense thereof with counsel
mutually satisfactory to the Company and Rosen; provided,
however, that Rosen shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Company,
if, in the reasonable opinion of counsel for Rosen,
representation of Rosen by the counsel retained by the Company
would be inappropriate due to actual or potential differing
interests between Rosen and any other party represented by such
counsel in such proceeding. The failure to deliver written
notice to the Company within a reasonable time of the
commencement of any such action shall relieve the Company of any
liability to Rosen under this section only to the extent
prejudicial to its ability to defend such action, but the
omission so to deliver written notice to the Company shall not
relieve it of any liability that it may have to Rosen otherwise
than under this section. The indemnification required by this
section shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, promptly as
such expense, loss, damage or liability is incurred.
6.3 To the extent any indemnification by the Company
is prohibited or limited by law, or is otherwise unavailable to
or insufficient to hold harmless Rosen, the Company agrees to
make the maximum contribution with respect to any amounts for
which it would otherwise be liable under this section. The
Company's obligation to indemnify Rosen pursuant to this section
shall survive the termination of this Agreement.
7. Registration Rights.
7.1 Investment Representation. Rosen hereby
represents and warrants that he shall acquire the Debenture for
purpose of investment and with no present intent to sell or
distribute the same. Should he exercise the conversion privilege
contained therein, any securities of Borrower so acquired will be
with the same investment intent.
7.2 Definitions. The following constitute definitions
of certain of the terms used in this Article Seven:
A. "Act" means the Securities Act of 1933, as
amended.
B. "Commission" means the Securities and
Exchange Commission.
C. "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
D. "Securities" shall mean the Debenture, any of
the shares of Common Stock issuable upon the conversion thereof,
the New Rosen Shares, Original Rosen Shares, the $1.00 Warrants,
the $5.00 Warrants and any shares of Common Stock issuable upon
exercise thereof.
7.3 Restriction on Transfer. Rosen shall not transfer
any Securities until he has first given written notice to Company
describing briefly the manner of any such proposed transfer and
until (i) the Company has received from Rosen's counsel an
opinion satisfactory to Company that such transfer can be made
without compliance with the registration provisions of the Act
and applicable state securities laws, and can be made pursuant to
an exemption therefrom, or (ii) Company and Rosen shall have
complied with Rule 144 promulgated under the Act (and in this
connection Company shall use its best efforts to so comply, upon
reasonable request of Rosen), or (iii) the Registration Statement
referenced in Section 7.4 below is filed by Company and declared
effective by the Commission.
7.4 Registration Rights.
7.4.1 Filing of Registration Statement. The
Company shall file with the SEC and use its best efforts to cause
to be declared effective on or before September 30, 1997, a
registration statement on Form SB-2 (the "Registration
Statement") covering the Securities.
7.4.2 Obligations of the Company. In
connection with the filing of the Registration Statement, the
Company shall;
(i) prepare and file with the SEC
such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used
in connection with the Registration Statement and take such other
reasonable action as may be necessary to keep the Registration
Statement effective until the earlier of the (A) public sale of
the Securities or (B) the Securities becoming capable of public
sale without registration pursuant to Rule 144 under the Act and
to comply with the provisions of the Act and the Exchange Act,
and the rules and regulations thereunder, with respect to the
disposition of the Securities;
(ii) notify Rosen, after
becoming aware thereof, (A) when the Registration Statement or
the prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed and, with
respect to the Registration Statement or any post-effective
amendment, when the same has become effective or (B) of any
request by the SEC for amendment of or supplement to the
Registration Statement or related prospectus or for additional
information;
(iii) furnish promptly to Rosen
such reasonable number of copies of a prospectus, and all
amendments and supplements thereto, in conformity with the
requirements of the Act, and such other documents as Rosen may
reasonable request in order to facilitate the disposition of any
Securities;
(iv) use its best efforts to
register and qualify the Securities under the securities or Blue
Sky laws of such states as shall be reasonably requested by
Rosen, and prepare and file in those states such amendments
(including post-effective amendments) and supplements and to take
such other actions as may be necessary to maintain such
registration and qualification in effect at all times during the
period the Company is required to maintain the Registration
Statement effective, and to take all other actions necessary or
advisable to enable the disposition of such securities in such
states.
(v) notify Rosen, at any time when a
prospectus relating to the Securities is required to be delivered
under the Securities Act, of the happening of any event as a
result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The Company shall promptly amend or supplement the
Registration Statement to correct any such untrue statement or
omission, and provide Rosen with an amended or supplemented
prospectus with respect to the Securities that corrects such
untrue statement or omission.
7.4.3 Rosen's Obligations. It shall be a
condition precedent to the obligation of the Company to Rosen to
take any action pursuant to this Section 7.4 that Rosen shall
furnish to the Company such information regarding Rosen, the
Securities and other shares of the Company's Common Stock held by
Rosen and the intended method of disposition of such securities
as shall be reasonably required to effect the registration of the
Securities and shall execute such documents in connection with
such registration as the Company may reasonably request.
7.4.4 Expenses of Registration. All expenses
incurred by the Company in complying with this Section 7.4,
including, without limitation, registration and filing fees, fees
and expenses of complying with state securities and Blue Sky
laws, printing expenses, and fees and disbursements of the
Company's and Rosen's counsel and accountants, shall be paid by
the Company.
7.5 Rule 144 Covenants. With a view to making
available to Rosen the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the Commission which may
at any time permit Rosen to sell the Securities to the public
without registration, Company agrees (i) to file with the
Commission in a timely manner all reports and other documents
required to be filed by an issuer of securities registered under
the Exchange Act; (ii) at its expense, forthwith upon Rosen's
request, to deliver to Company a certificate, signed by Company's
principal financial officer, stating (A) Company's name, address
and telephone number (including area code), (B) Company's
Internal Revenue Service identification number, (C) Company's
Securities and Exchange Commission file number, (D) the number of
shares of Common Stock outstanding as shown by the most recent
report or statement published by Company, and (E) whether Company
has filed the reports required to be filed under the Exchange
Act, for a period of at least 90 days prior to the date of such
certificate and in addition has filed the most recent annual
report required to be filed thereunder; and (iii) upon reasonable
satisfaction that Rule 144 is being complied with, to deliver
Securities not bearing the legend prescribed by Section 7.7, or
any other legend restricting transfer, for such Securities as may
be requested from time to time by Rosen to be held for delivery
to a purchaser or purchasers in a sale or sales pursuant to Rule
144.
7.6 Registration Indemnification.
7.6.1 Indemnification by Company. In the
event of any registration or Regulation A offering of any
Securities pursuant to this Article 7, the Company will indemnify
and hold harmless Rosen and his agents and personal
representatives ("Rosen Indemnified Persons") against any losses,
claims, damages, expenses (including reasonable attorneys' fees),
or liabilities (or actions in respect thereof) under the Act or
otherwise, which arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in any such registration statement, any preliminary
prospectus or final prospectus contained therein, or in any
notification statement or offering circular, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse any such Rosen
Indemnified Person for any legal or other expenses reasonably
incurred by such Rosen Indemnified Person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in said registration statement, said
preliminary prospectus, or said prospectus, or in any offering
circular, or any said amendment or supplement, in reliance upon
and in conformity with written information furnished by Rosen or
his agents for use in the preparation thereof.
7.6.2 Indemnification by Rosen. Rosen will
indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed any such registration
statement, such person(s), if any, who controls the Company
within the meaning of the Act, and their respective agents and
employees ("Company Indemnified Persons"), against any losses,
claims, damages or liabilities to which Company or any such
Company Indemnified Person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue or alleged untrue statement of any material fact
contained in said registration statement, said preliminary
prospectus, said prospectus, said offering circular, or said
amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made
in said registration statement, said preliminary prospectus, said
prospectus, said offering circular, or said amendment or
supplement, in reliance upon and in conformity with written
information furnished by Rosen or his agents for use in the
preparation thereof; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such Company
Indemnified Person in connection with investigating or defending
any such loss, claim, damage, liability or action.
7.6.3 Notice of Action. Promptly after
receipt by an indemnified party under this Section 7.6 of notice
of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.6 notify the indemnifying
party of the commencement thereof; but the omission so to notify
the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
this Section 7.6.
7.6.4 Control of Proceedings. In case any
such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to
the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party. In the event the
indemnifying party gives notice to the indemnified party of its
election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section
7.6.4 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof
subsequent to the date of such notice other than reasonable costs
of investigation.
7.7 Legend. Any certificate representing Securities
shall be stamped with a suitable endorsement to the effect that
said Securities are subject to the terms and conditions of this
Article 7 and stating that said terms and conditions are fully
set forth in Article 7, a copy of which is on file and available
for the inspection at the main office of the Company.
8. Release of Shares from Escrow. Upon execution of this
Agreement, the 121,212 shares of Common Stock ("Original Rosen
Shares") previously issued to Rosen and held in escrow pursuant
to the terms of that certain Claims Escrow Agreement dated
February 23, 1996, by and among the Company, Rosen and J. Bennett
Grocock, P.A., will be released from such escrow and delivered to
Rosen. The Company shall bear all costs and expenses incurred or
associated with release and delivery to Rosen of the Original
Rosen Shares.
9. Restructuring of Management of the Company. The
management of the Company shall be restructured as set forth in
this Article 9.
9.1 Composition of Board of Directors of Company.
Promptly following the execution of this Agreement, the Board of
Directors of the Company ("Board") shall amend the bylaws of the
Company to provide that the Board shall consist of no more than
five (5) members. The Company shall cause the Board to be
restructured as follows:
(a) Fernand L. Duquette shall resign from the
Board immediately.
(b) the Company shall nominate Alan Flood for
election as a Board member in the Proxy Statement; and
(c) the Company shall elect two (2) individuals
designated by Rosen as members of the Board as soon as such
persons have been designated. Rosen shall retain the right to
designate two directors until such time as the Indebtedness has
been paid in full or has been converted to Common Stock.
9.2 Executive Officers. Fernand L. Duquette shall
resign as Chief Executive Officer of the Company immediately.
The Board shall appoint Melvin Rosen as interim President/CEO.
10. Modification of Trust. The Tel-Com-Rosen Trust dated
February 22, 1996, by and between the Company and Rosen will be
modified appropriately to reflect the terms set forth in this
Agreement as more fully set forth in Exhibit B attached hereto.
The Company shall pay any accrued and unpaid Trustee's fees under
the Tel-Com Rosen Trust, and will pay future Trustee's fees as
they accrue until the Debenture is paid in full or converted into
Common Stock in accordance with its terms.
11. Rosen's Attorneys' Fees. The Company will reimburse
Rosen for the reasonable, documented attorneys' fees incurred by
Rosen ("Rosen's Attorney's Fees") in connection with negotiating
or preparing this Agreement and any ancillary documents entered
into by the parties in connection with the restructuring of the
Indebtedness as soon as the Company has sufficient funds
available for such purpose. If Rosen pays Rosen's Attorney's
Fees directly, then the amount of such payment shall constitute
an account payable of the Company to Rosen or Rosen may include
the amount of Rosen's Attorneys' Fees as part of the principal
amount of the Debenture, in which event the Debenture shall be
modified appropriately.
12. [Intentionally Omitted]
13. Release of Claims. The Company shall execute and
deliver the release benefiting Rosen attached hereto as Exhibit
E.
14. Continuing Security. The obligation of the Company
under the Debenture shall continue to be secured pursuant to the
Tel-Com Rosen Trust, as amended pursuant to Article 10.
15. Consulting Agreement. Upon execution of this
Agreement, the Company and Rosen Media and Marketing, Inc., shall
enter into the Consulting Agreement in substantially the form
attached hereto as Exhibit F.
16. Review and Control of Expenses. Until such time as the
management of the Company is restructured as provided for in
Article 9, the Company shall review its ongoing overhead
expenses, particularly those expenses relating to the operation
of its Daytona Beach, Florida office, and shall use its best
efforts to minimize such expenses. Regular reports shall be
provided to Rosen.
17. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors or
assigns.
18. Notices. Any and all notices, designations, consents,
offers, acceptances, or any other communication provided for
herein shall be in writing, shall be deemed given upon receipt,
and shall be made by express delivery service, registered or
certified mail, or fax transmission (followed up by original by
certified mail), which shall be addressed to the parties at the
following addresses:
If to the Company: Tel-Com Wireless Cable TV
Corporation
501 N. Grandview Avenue, Suite
Daytona Beach, FL 32118
Facsimile: (904) 226-1250
Attention: President
If to Rosen Mr. Melvin Rosen
930 N. E. 176th Street
Miami, FL 33162
Facsimile: (305) 944-1433
Any party may change its address for purposes of this
paragraph by giving notice as provided herein.
19. Waiver or Modification. No waiver or modification of
this Agreement or of any covenant, condition or limitation herein
contained shall be valid unless in writing and duly executed by
the party to be charged therewith. Furthermore, no evidence of
any waiver or modification shall be offered or received in
evidence in any proceedings, arbitration, or litigation between
the parties arising out of or affecting this Agreement, or the
rights or obligations of any party hereunder, unless such waiver
or modification is in writing and duly executed as aforesaid.
The provisions of this paragraph may not be waived except as
herein set forth.
20. Multiple Copies or Counterparts of Agreement. The
original and one or more copies of this Agreement may be executed
by one or more of the parties hereto. In such event, all of such
executed copies shall have the same force and effect as the
executed original, and all of such counterparts, taken together,
shall have the effect of a fully executed original.
21. Applicable Law and Venue. This Agreement shall be
construed and regulated under and by the laws of the State of
Florida, without reference to Florida's choice of law decisions,
and any action brought to enforce or interpret this Agreement
shall be brought only in the federal or state court having
competent jurisdiction and sitting in Dade County, Florida.
22. Legal Fees. In the event any litigation or arbitration
arises out of or in connection with this Agreement, and such
litigation or arbitration results in a final judgment in favor of
such party ("Prevailing Party"), the Prevailing Party in such
litigation or arbitration shall receive from the other party all
of its court costs and legal expenses, including reasonable
attorneys' fees, incurred in any such litigation or arbitration,
including those associated with appellate, and post-judgment
collection proceedings.
23. Further Assurances. The parties hereto will execute
and deliver such further instruments and do such further acts and
things as may be reasonably required to carry out the intent and
purposes of this Agreement.
24. Provisions Severable. This Agreement is intended to be
performed in accordance with, and only to the extent permitted
by, all applicable laws, ordinances, rules and regulations of the
jurisdiction(s) in which the parties to business. If any
provision of this Agreement, or the application thereof to any
person or circumstances shall, for any reason or to any extent,
be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to either persons or
circumstances shall not be affected thereby, but rather shall be
enforced to the greatest extent permitted by law.
25. Incorporation by Reference. All Schedules together
with the Debenture, Amendment to Tel-Com Rosen Trust, and Release
are incorporated hereby by reference.
26. Exculpatory Clause. Nothing contained in this
Agreement or any Exhibits hereto shall be deemed to obligate
personally, or to constitute the agreement or covenant of, any
officer of the Company signing such documents on the Company's
behalf, and Rosen hereby expressly waives any claims or causes of
action based on this Agreement or any of the Exhibits hereto
against any such individuals who act in such capacity.
[Signatures contained on following page]
The parties have executed this Agreement as of the day and
year first above written.
"COMPANY"
Tel-Com Wireless Cable TV Corporation
By: /s/Fernand L. Duquette
Name: Fernand L. Duquette
Title: President
"ROSEN"
/s/Melvin Rosen
Melvin Rosen
EXHIBIT 2
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), THE FLORIDA
SECURITIES AND INVESTOR PROTECTION ACT, OR ANY OTHER STATE
SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY HAVE BEEN
ACQUIRED PURSUANT TO AN INVESTMENT REPRESENTATION ON THE PART OF
THE HOLDER HEREOF AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED,
DONATED, OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR
CONSIDERATION, BY THE HOLDER IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND ALL APPLICABLE STATE
SECURITIES AND/OR INVESTOR PROTECTION LAWS OR THE ISSUANCE TO THE
COMPANY OF A FAVORABLE OPINION OF COUNSEL OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO SUCH
COUNSEL, IN EITHER CASE TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND THAT ANY SUCH TRANSFER SHALL NOT BE IN
VIOLATION OF THE ACT AND APPLICABLE STATE SECURITIES LAWS.
SECURED CONVERTIBLE DEBENTURE
FOR VALUE RECEIVED, TEL-COM WIRELESS CABLE TV CORPORATION, a
Florida corporation (hereinafter called "Borrower"), hereby
promises to pay to MELVIN ROSEN (herein called the "Holder"),
or order, the principal sum of Two Million Dollars ($2,000,000)
("Principal") and to pay interest thereon at the rate of twelve
percent (12%) per annum from the date hereof until the Maturity
Date (as defined herein), said rate of interest subject to
adjustment pursuant to Article One below. Interest at the rate
of (i) seven percent (7%) per annum shall be paid monthly in
arrears commencing on June 1, 1997, and continuing on the first
day of each consecutive month thereafter until the entire
Principal balance has been paid in full, and (ii) interest at the
rate of five percent (5%) shall accrue and be payable in full on
the Maturity Date. All unpaid Principal and interest together
with all other amounts due hereunder shall become due and payable
on May 19, 1998 ("Maturity Date"), subject to extension by the
Borrower or the Holder as provided in Article One below.
The Principal amount is subject to adjustment within thirty
(30) days of the date hereof to add thereto an amount equal to
certain accrued interest, attorneys' fees, and trustees' fees as
set forth in that certain Debt Restructuring Agreement of even
date herewith between Borrower and Holder (the "Debt
Restructuring Agreement").
All amounts due hereunder are payable in lawful money of the
United States of America at 930 N. E. 176th Street, Miami,
Florida 33162.
ARTICLE ONE
EXTENSION
1.1 Optional Extension by the Borrower. Borrower shall
have the right and option to extend the Maturity Date with
respect to One Million Dollars of the Principal ("Extended
Amount") for an additional period not to exceed twelve (12)
months (such extended Maturity Date being hereinafter referred to
as the "Extended Maturity Date") by providing Holder written
notice of exercise of such extension right not less than thirty
(30) days prior to the Maturity Date. As an express condition
precedent to the extension of the Maturity Date as to such
Principal amount, all accrued interest up to the Maturity Date,
together with all Principal other than the Extended Amount, must
be paid in full on or before the Maturity Date. Commencing on
the first day immediately following the Maturity Date and
continuing to the Extended Maturity Date, interest shall accrue
on the Extended Amount at the rate of fifteen percent (15%) per
annum, of which interest (i) at the rate of eight percent (8%)
per annum shall be due and payable monthly in arrears commencing
on the first day of the second full month following the Maturity
Date and continuing on the first day of each consecutive month
thereafter until the entire Principal balance has been paid in
full, and (ii) at the rate of seven percent (7%) shall accrue and
be due and payable in full on the Extended Maturity Date.
1.2 Optional Extension by the Holder. Holder shall have
the right and option, but not the obligation, to extend the
Maturity Date of the entire balance of Principal then outstanding
to the Extended Maturity Date by providing Holder written notice
of exercise of such extension right on or before the last day of
the sixth (6th) month after the date of this Debenture. If
Holder exercises its option to extend the Maturity Date as set
forth in Section 1.2, then, commencing on the first day
immediately following the Maturity Date and continuing to the
Extended Maturity Date, interest shall accrue (a) one-half (1/2)
of the then outstanding Principal amount of this Debenture at the
rate of fifteen percent (15%) per annum, of which interest (i) at
the rate of eight percent (8%) per annum shall be due and payable
monthly in arrears commencing on the first day of the second full
month following the Maturity Date and continuing on the first day
of each consecutive month thereafter until the entire Principal
balance has been paid in full, and (ii) at the rate of seven
percent (7%) shall accrue and be due and payable in full on the
Extended Maturity Date, and (b) on the remaining one-half (1/2)
of the then outstanding Principal amount of this Debenture at the
rate of twelve percent (12%) per annum, of which interest (i) at
the rate of seven percent (7%) per annum shall be due and payable
monthly in arrears commencing on the first day of the second full
month following the Maturity Date and continuing on the first day
of each consecutive month thereafter until the entire Principal
balance has been paid in full, and (ii) at the rate of five
percent (5%) shall accrue and be due and payable in full on the
Extended Maturity Date.
ARTICLE TWO
PREPAYMENT
2.1 Prepayment. The Principal amount shall not be subject
to prepayment, in whole or in part, at any time during the first
180 days after the date of this Debenture without the prior
written approval of Holder. Commencing on the 181st day after
the date of this Debenture, on at least sixty (60) days' prior
written notice to Holder, Borrower, at its option, without
penalty or premium, may prepay all, and not less than all, of the
Principal amount then outstanding plus interest due and payable
as of the prepayment date. The notice of prepayment shall
include a description of the source of funding for the prepayment
amount. In the event of the exercise of the optional extension
of the Extended Amount by Borrower pursuant to Section 1.1,
Borrower shall have no right to prepay the Extended Amount for
the first 180 days after the Maturity Date.
ARTICLE THREE
CONVERSION AND PURCHASE RIGHTS
3.1 Conversion Right.
3.1.1 Conversion Right and Procedure. The Holder
of this Debenture shall have the right from and after the date
hereof and at any time on or prior to payment in full by the
Borrower, by giving Borrower proper notice of intent to convert
as provided herein, to convert all or any portion of the sum of
all amounts then outstanding and owed to the Holder pursuant to
this Debenture (including the Principal balance then outstanding,
all accrued but unpaid interest, and any other amounts due
hereunder) up to the maximum allowed using the conversion rate
set forth in this Section 3.1 into fully paid and nonassessable
shares of common stock of Borrower, per value $.001 par share
("Common Stock"). Notice of intention to convert must be
delivered to the Company at least thirty (30) days prior to the
applicable conversion date. Upon the surrender hereof,
accompanied by such Holder's written request for conversion,
Borrower, within thirty (30) days of receipt of Holder's notice
of conversion pursuant to this Article Three, shall pay all
interest accrued hereon to the date of conversion (if Holder is
not including such amounts of accrued interest in the total
amount for which conversion is being exercised) and issue and
deliver to Holder certificates evidencing such shares of Common
Stock as hereinafter set forth. If a portion of this Debenture
is converted, Borrower shall deliver to the Holder a certificate
for the proper number of shares of Common Stock for the portion
converted and a new Debenture in the form hereof for the balance
of the Principal amount hereof. Upon transfer of this Debenture,
the then-unexercised conversion or purchase right set forth in
this Article Three shall inure to the transferee(s) in proportion
to their respective interests, or as Holder shall allocate said
conversion or purchase right.
3.1.2 Conversion Rate. Subject to readjustment as
provided in Section 3.2 hereof, the conversion rate or price
("Conversion Price") at which Holder shall be entitled to convert
the entire sum of the indebtedness represented by this Debenture
into shares of Capital Stock shall be an amount equal to the
lesser of (i) $0.50 per share, or (ii) a per share price equal to
the average of the closing "bid" prices of the Borrower's Common
Stock quoted on NASDAQ for the five (5) consecutive trading days
immediately prior to the date of conversion.
3.2 Adjustment of Conversion Terms. The Conversion Price
and number of shares to be issued upon conversion determined
pursuant to Section 3.1 shall be subject to adjustment from time
to time upon the happening of certain events while this
conversion or purchase right remains outstanding, as set forth in
this Section 3.2.
3.2.1 Merger, Sale of Assets, etc. If the Borrower
at any time shall consolidate with or merge into or sell or
convey all or substantially all its assets to any person,
corporation, or other entity, then this Debenture shall
thereafter evidence the right to purchase such number and kind of
securities and property as would have been issuable or
distributable on account of such consolidation, merger, sale or
conveyance. Upon or with respect to the securities subject to
the conversion or purchase right immediately prior to such
consolidation, merger, sale or conveyance, the foregoing
provision shall similarly apply to successive transactions of a
similar nature by any such successor or purchaser. Without
limiting the generality of the foregoing, the antidilution
provisions of this Debenture shall apply to such securities of
such successor or purchaser after any such consolidation, merger,
sale or conveyance.
3.2.2 Reclassification, etc. If the Borrower at
any time shall, by subdivision, combination or reclassification
of securities or otherwise, change any of the securities then
purchasable upon the exercise of the conversion or purchase right
contained in this Debenture into the same or a different number
of securities of any class or classes, then this Debenture shall
thereafter evidence the right to purchase such number and kind of
securities as would have been issuable as the result of such
change with respect to the securities which were subject to the
conversion or purchase right immediately prior to such
subdivision, combination, reclassification or other change. If
shares of Common Stock are subdivided or combined into a greater
or smaller number of shares of Common Stock, then the Conversion
Price shall be proportionately reduced in case of subdivision of
shares or proportionately increased in the case of combination of
shares, both cases by the ratio which the total number of shares
of Common Stock to be outstanding immediately after such event
bears to the total number of shares of Common Stock outstanding
immediately prior to such event.
3.2.3 Share Issuance. If the Borrower at any time
shall issue and sell or otherwise distribute any shares of Common
stock (otherwise than as provided in Section 3.2.2 above or
pursuant to the grant of an option under the Company's 1995 Stock
Option Plan, or pursuant to options or warrants outstanding on
the date of this Debenture) at a price per share less than the
Conversion Price in effect at the time of such issue, or without
consideration, then, and thereafter successively upon each such
issue, the Conversion Price shall be adjusted as follows: the
number of shares of Common Stock outstanding immediately prior to
such issue shall be multiplied by the Conversion Price in effect
at the time of such issue and there shall be added to the product
so obtained the aggregate consideration, if any, received by the
Borrower upon such issue of additional shares of Common Stock.
The sum so obtained shall be divided by the number of shares of
Common Stock outstanding immediately after such issue, and the
resulting quotient shall be the adjusted Conversion Price.
Adjusted Conversion Prices shall in all cases be computed to the
nearest even cent. The number of shares of Common Stock
purchasable upon exercise of this Debenture shall be adjusted as
follows: the number of shares originally specified herein shall
be multiplied by the Conversion Price originally specified
herein, and the resulting product shall be divided by the
adjusted Conversion Price determined as provided above in this
Section 3.2.3. The resulting quotient shall be the adjusted
number of shares purchasable hereunder and shall be computed to
the nearest 1/100th of one share. For the purposes of this
Section 3.2.3, the following provisions shall be applicable:
(a) In the case of the issuance of additional
shares of Common Stock for cash, the consideration received by
the Borrower therefor shall be deemed to be the cash proceeds
received by the Borrower for such shares before deducting any
commissions or other expenses paid or incurred by the Borrower
for any underwriting of, or otherwise in connection with, the
issuance of such shares.
(b) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the
Borrower) of additional shares of Common Stock for a
consideration other than cash or a consideration a part of which
shall be other than cash received by the Borrower for such
shares, the amount received by the Borrower shall be deemed to be
the value of such consideration as determined reasonably and in
good faith by the Board of Directors of the Borrower.
(c) In case of the issuance by the Borrower after
the date hereof of (i) any Security that is convertible into
shares of Common Stock of the Borrower, (ii) any rights or
options to purchase Common Stock of the Borrower, the Borrower
shall be deemed to have issued the maximum number of shares of
Common Stock into which such convertible security may be
converted, and the maximum number of shares of Common Stock
deliverable on the exercise of such rights options, for the
consideration received by the Borrower for such convertible
security or for such rights or options (plus the amount of any
underwriting discount), as the case may be, and before deducting
therefrom any expenses or commissions incurred or paid by the
Borrower for any underwriting of, or otherwise in connection
with, the issuance of such convertible security or rights or
options, plus (i) any consideration or adjustment payment to be
received by the Borrower in connection with such conversion and
(ii) the minimum consideration to be received by the Borrower for
the Common Stock issuable upon the exercise of such rights
options. No further adjustment of the Conversion Price shall be
made as a result of the actual issuance of the shares of Common
Stock of the Borrower upon conversion of any convertible security
exercise of any rights or options referred in this clause (c)
except that on the exercise of the right to convert such
convertible security or exercise of said right or option, or on
termination or expiration of such rights, options or conversion
rights, the Conversion Price hereunder will be readjusted to such
as would have been obtained had the adjustment made upon the
issuance of such convertible security or upon the issuance of
such rights or options been made on the basis of (i) the number
of shares of Common Stock actually issued on the conversion of
such convertible security or on the exercise of such rights
options, and (ii) the consideration actually received by the
Borrower upon such conversion or exercise; provided that no such
readjustment shall affect conversions or purchases previously
made pursuant to this Article Three.
(d) For the purposes hereof, any additional
shares of Common Stock issued as a stock dividend shall be deemed
to have been issued for no consideration.
(e) The number of shares of Common Stock at any
time outstanding shall exclude all shares then owned or held by
or for the account of the Borrower.
(f) Shares reserved as of the date hereof for
issue upon the exercise of outstanding stock options, warrants
and rights to the extent disclosed in Section 4.9 shall be deemed
to be issued at a price per share equal to the Conversion Price
or adjusted Conversion Price in effect at the date of issue.
3.3 Cash Distributions. No adjustment on account of cash
dividends or interest on Common Stock or other securities
purchasable hereunder will be made to the Conversion Price.
3.4 Fractional Shares. No fractional shares of Common
Stock will be issued in connection with any conversion or
purchase hereunder. In lieu of such fractional shares, Borrower
shall make a cash payment therefor upon the basis of the
Conversion Price then in effect.
3.5 Authorized Shares. Borrower covenants that, during the
period the conversion or purchase right exists, Borrower will
reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common
Stock upon the conversion of this Debenture. Borrower agrees
that its issuance of this Debenture shall constitute full
authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the conversion of
this Debenture or purchase of shares pursuant hereto.
3.6 Purchase Right. Notwithstanding any partial payment of
the Principal of this Debenture, the conversion right or right to
purchase securities as set forth in this Article Three shall
continue with respect to such unpaid Principal, adjusted as
provided in this Article Three, until payment in full of this
Debenture.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Holder the
Representations and Warranties set forth in the Debt
Restructuring Agreement.
ARTICLE FIVE
BORROWER'S AFFIRMATIVE
COVENANTS
Borrower agrees that, until this Debenture is paid in full,
Borrower (and each Subsidiary of Borrower unless the context
otherwise requires) will:
5.1 Maintain Corporate Rights and Facilities. Maintain and
preserve its corporate existence and all rights, franchises and
other authority adequate for the conduct of its business;
maintain its properties, equipment and facilities in good order
and repair and conduct its business in an orderly manner without
voluntary interruption.
5.2 Maintain Insurance. Maintain public liability,
property damage and workmen's compensation insurance and
insurance on all its insurable property against fire and other
hazards with responsible insurance carriers to the extent usually
maintained by companies in the same business.
5.3 Pay Taxes and Other Liabilities. Pay and discharge,
before the same become delinquent and before penalties accrue
thereon, all taxes, assessments and governmental charges upon or
against it or any of its properties, and all its other material
liabilities at any time existing, except to the extent and so
long as: (i) the same are being contested in good faith and by
appropriate proceedings in such manner as not to cause any
materially adverse effect upon its financial condition or the
loss of any right of redemption from any sale thereunder; and
(ii) it shall have set aside on its books reserves (segregated to
the extent required by sound accounting practice) deemed by it
adequate with respect thereto; and pay all governmental charges
or taxes at any time payable or ruled to be payable in respect of
any existing or hereafter enacted federal or state statute.
5.4 Records and Reports. Maintain a standard system of
accounting in accordance with generally accepted accounting
principles and on a consistent basis; and permit representatives
of Holder, as long as it holds this Debenture, or any securities
acquired upon conversion of this Debenture, to have access to and
to examine its properties, books and records at all reasonable
times; furnish Holder, as long as it holds this Debenture or any
securities acquired upon conversion of this Debenture:
(a) as soon as available, and in any event within
forty-five (45) days after the close of each quarter, a
consolidated balance sheet of Borrower and subsidiaries as of the
end of such quarter and a consolidated profit and loss statement
for the portion of Borrower's fiscal year ending with the last
day of such quarter, all in reasonable detail, prepared and
certified by an authorized financial officer of Borrower as
fairly presenting the financial condition as of the balance sheet
date and results of operations for the period then ended in
accordance with generally accepted accounting principles on a
basis consistently applied;
(b) as soon as available, and in any event within
ninety (90) days after the close of each fiscal year of Borrower,
a certificate in a form satisfactory to Holder of the chief
executive officer of Borrower, stating that Borrower has
performed and observed each and every covenant contained in this
Debenture to be performed by it and that no event has occurred
and no condition then exists which constitutes an Event of
Default hereunder or would constitute such an Event of Default
upon the lapse of time or upon the giving of notice and the lapse
of time specified herein; or, if any such event has occurred or
any such condition exists, specifying the nature thereof;
(c) promptly after the receipt thereof by Borrower,
copies of any detailed audit reports submitted to Borrower by
independent accountants in connection with each annual or interim
audit of the accounts of Borrower made by such accountants;
(d) promptly after the same are available, copies of
proxy statements, financial statements and reports as Borrower
shall send to its stockholders, and copies of all reports which
Borrower may file with the Securities and Exchange Commission or
any governmental authority at any time substituted thereof;
(e) such information concerning Borrower as may be
reasonably requested by Holder for the purpose of enabling Holder
to file such forms and reports as Holder may be required to file
with regulatory agencies or governmental authorities; and
(f) such other information relating to the affairs of
Borrower as Holder reasonably may request from time to time.
5.5 Notice of Litigation and Disputes. Promptly notify the
Holder of any suits or litigation instituted against the
Borrower, or disputes that have a high probability of resulting
in a suit of material significance against the Borrower.
5.6 Notice of Default. Promptly notify the Holder in
writing of the occurrence of any Event of Default hereunder or of
any event which would become an Event of Default hereunder upon
the lapse of time specified in this Debenture.
5.7 Conduct of Business. Conduct the business of Borrower
in accordance with all applicable provisions of Federal, State
and Local Law, including but not limited to ERISA.
5.8 Election of Directors. Holder shall be entitled to
designate two (2) members to Borrower's Board of Directors, which
members Holder may remove or replace at its discretion.
Borrower's Board of Directors shall act promptly to appoint,
remove, or replace Holder's designees and, with respect to
Borrower's annual meeting of shareholders, shall include Holder's
designees as nominees for director in any proxy statement.
5.9 Directors' Meetings. Hold meetings of the Board of
Directors of the Borrower no less frequently than once each
quarter; give Holder not less than three (3) days prior notice of
the time and place of each such meeting and permit one
representative of the Holder of the Debenture to attend the same.
5.10 Registration Rights; Required Filings. Perform all of
its obligations under Article 7 of the Debt Restructuring
Agreement.
ARTICLE SIX
BORROWER'S NEGATIVE COVENANTS
Borrower agrees that, until this Debenture is repaid,
Borrower (and each subsidiary of Borrower unless the contest
otherwise requires) will not, without the prior consent of
Holder, which consent shall not be unreasonably withheld:
6.1 Changes in Type of Business. Make any substantial
change in the character of its business.
6.2 Outside Indebtedness. Create, incur, assume or permit
to exist any material indebtedness for borrowed moneys other than
indebtedness evidenced by the Debenture, indebtedness to Banks,
and indebtedness secured by security interests in Borrower's
equipment for the purchase of such equipment in an amount not in
excess of $20,000 for each individual item and $50,000 in the
aggregate incurred within any twelve month period.
6.3 Liens and Encumbrances. Create, incur or assume any
material mortgage, pledge, encumbrance, lien or charge of any
kind (including the charge upon the property at any time
purchased or acquired under conditional sale or other title
retention agreement) upon any property or other asset now owned
or hereafter acquired by it, other than liens for current taxes
not delinquent and security interests and liens securing
indebtedness permitted under Section 6.2.
6.4 Loans, Investments, Secondary Liabilities. Make any
loans or advances to any person or other entity other than in the
ordinary and normal course of its business as now conducted, or
make any investment in the securities of any person or other
entity other than the United States Government; or guarantee or
otherwise become liable upon the obligation of any person or
other entity, except by endorsement of negotiable instruments for
deposit or collection in the ordinary and normal course of its
business, and except for guarantees and similar liabilities by
Borrower on behalf of any subsidiary of Borrower or by any
subsidiary on behalf of Borrower or any other subsidiary of
Borrower, provided such guarantees are brought to Holder's
attention when granted, and such guarantees are for indebtedness
which is consolidated and included in determination of compliance
with Sections 5.4 and 6.2.
6.5 Acquisition or Sale of Business; Merger or
Consolidation. Purchase or otherwise acquire the assets or
business of any person or other entity; or liquidate, dissolve,
merge or consolidate, or commence any proceedings therefor; or
sell any assets except in the ordinary and normal course of its
business as now conducted; or sell, lease, assign or transfer any
substantial part of its business or fixed assets, or any property
or other assets necessary for the continuance of its business as
now conducted, including without limitation the selling of any
property or other asset accompanied by the leasing back of the
same.
6.6 Issuance of Shares, Dividends, Stock Payments. Declare
or pay any dividend or make or authorize any other distribution
on its capital stock now outstanding or hereafter issued; or
purchase or otherwise acquire or redeem or retire any of such
stock; or issue or authorize the issuance of any such stock of
any kind or class except as required to meet Borrower's
obligations under the Debenture and under the plans and
agreements for which shares are reserved as set forth in Section
4.9; or reclassify or subdivide, or authorize the
reclassification or subdividing of, any such stock.
6.7 By-Laws. Amend its corporate Bylaws.
ARTICLE SEVEN
EVENTS OF DEFAULT
The occurrence of any of the following events of default
shall, at the option of the Holder hereof, make all sums of
Principal and interest then remaining unpaid hereon and all other
amounts payable hereunder immediately due and payable, all
without demand, presentment, or notice, all of which hereby are
expressly waived:
7.1 Failure to Pay Principal or Interest. Failure of
Borrower to pay any installment of Principal or interest hereon
when due and continuance thereof for a period of ten (10)
business days after written notice to Borrower from Holder.
7.2 Breach of Covenant. The breach of any other covenant
or other term or condition of this Debenture or the Debt
Restructuring Agreement and continuance thereof for a period of
thirty (30) days after written notice to Borrower from Holder.
7.3 Breach of Representations and Warranties. Any of
Borrower's representations or warranties made herein or in the
Debt Restructuring Agreement shall be false, inaccurate, or
misleading in any material respect.
7.4 Insolvency; Receiver or Trustee. Borrower shall become
insolvent or admit in writing its inability to pay its debts as
they mature; or make an assignment for the benefit of creditors;
or apply for or consent to the appointment of a receiver or
trustee for it or for a substantial part of its property or
business; or such a receiver or trustee otherwise shall be
appointed.
7.5 Judgments. Any material money judgment, writ, or
similar process shall be entered or filed against Borrower, any
of the Subsidiaries, or any of its property or other assets and
shall remain unvacated, unbonded or unstayed for a period of
thirty (30) days after it is entered or filed or in any event
later than three days prior to the date of any proposed sale
thereunder.
7.6 Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against Borrower or any of the Subsidiaries and
which shall not have been dismissed within ninety (90) days after
instituted.
7.7 Attachments. If any material writ of attachment shall
be levied against any property or other assets of Borrower or any
of the Subsidiaries and Borrower or the respective Subsidiary
shall not post a bond for the release of such attachment within
thirty (30) days after levy.
7.8 Default on Other Agreements. Failure of Borrower or
any Subsidiary to pay when due any other material obligation for
money borrowed or dividend or redemption payments on any of its
Preferred Stock or to allow any default under any other material
agreement or obligation, which failure or default is not cured
within the applicable cure period, if any, to cure such failure
or default.
ARTICLE EIGHT
SECURITY FOR DEBENTURE
This Debenture is secured by that certain Stock Trust
Agreement by and between Borrower and Holder dated February 23,
1996, as amended.
ARTICLE NINE
REGISTRATION OF TRANSFER
9 .1 Register. The Borrower shall maintain a register
for the recordation of transfers of this Debenture, which shall
be transferable in whole or in part. Upon presentation by the
Holder and surrender of this Debenture, the Borrower shall
register such transfer and issue a new Debenture or Debentures of
like aggregate Principal amount and bearing the same date.
9.2 Lost of Destroyed Debentures. Upon receipt by the
Borrower at its principal office of evidence satisfactory to the
Borrower of the loss, theft, destruction, or mutilation of this
Debenture, and in the case of any such loss, theft, or
destruction, upon delivery of indemnity satisfactory to the
Borrower or, in case of any such mutilation, upon surrender and
cancellation of this Debenture, the Borrower will issue a new
Debenture of like tenor in lieu of this Debenture with a
notification thereon of the date from which interest has accrued.
The Holder will pay Borrower's cost to replace such Debenture.
ARTICLE TEN
MISCELLANEOUS
10.1 Survival of Warranties. All agreements, representations
and warranties made herein shall survive the execution and
delivery hereof.
10.2 Failure or Indulgence Not Waiver. No failure or delay
on the part of Holder hereof in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any
other right, power or privilege. All rights and remedies
existing hereunder are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
10.3 Notices. All notices, requests, demands, and other
communications under this Debenture shall be in writing and shall
be deemed to have been duly given on the date of service.
Notices may be served (i) personally on the party to whom notice
is to be given, (ii) by first class mail, registered or
certified, postage prepaid, or (iii) by overnight express courier
(such as Federal Express), and properly addressed as follows:
If to Holder: Melvin Rosen
930 N. E. 176th Street
North Miami, Florida 33162
With a copy to
Holder's Attorney: Broad & Cassel
Suite 3000 Miami Center
201 South Biscayne Blvd.
Miami, Florida 33131
Attention: Dale Bergman, Esquire
If to Borrower: Tel-Com Wireless Cable TV Corporation
501 N. Grandview Avenue, Suite 201
Daytona Beach, Florida 32118
Attention: President
With a copy to
Borrower's attorney: Grocock, Loftis & Abramson
126 East Jefferson Street
Orlando, Florida 32801
Attention: J. Bennett Grocock
10.4 Definition. The term "Debenture" or "this Debenture"
and all reference thereto, as used throughout this instrument,
shall mean this instrument as originally executed or if later
amended or supplemented, then, as so amended or supplemented.
10.5 Assignability. This Debenture shall be binding upon
Borrower, its successors and assigns, and shall inure to the
benefit of Holder, its successors and assigns.
10.6 Litigation Expenses. In the event any litigation or
arbitration arises out of or in connection with this Agreement,
the prevailing party in such litigation or arbitration shall
receive from the other party all of its court costs and legal
expenses, including reasonable attorneys' fees, incurred in any
such litigation or arbitration, including those associated with
appellate, and post-judgment collection proceedings.
10.7 Governing Law. This Debenture has been executed
in and shall be governed by the laws of the State of Florida,
without regard to Florida's choice of law provisions. Venue for
any proceeding shall be in Dade County, Florida.
10.8 Time of the Essence. Time is of the essence of this
Debenture and each term and covenant set forth herein.
[Signatures contained on following page]
IN WITNESS WHEREOF, Borrower has caused this Debenture to be
signed in its name by its duly authorized officer and its
corporate seal to be affixed hereto.
Dated: May 19, 1997
TEL-COM WIRELESS CABLE TV CORPORATION
By: /s/Fernand L. Duquette
Name: Fernand L. Duquette
Title: President
EXHIBIT 3
THE SHARES ISSUABLE UPON EXERCISE OF THE
WARRANT REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW. SUCH SHARES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR
PLEDGED WITHOUT (1) REGISTRATION UNDER THE
ACT AND ANY APPLICABLE STATE LAW, OR (2) AN
OPINION (REASONABLY SATISFACTORY TO THE
COMPANY) OF COUNSEL THAT REGISTRATION IS NOT
REQUIRED.
THE TRANSFER OF THIS WARRANT IS
RESTRICTED AS DESCRIBED HEREIN.
TEL-COM WIRELESS CABLE TV CORPORATION,
a Florida corporation
Warrant for the Purchase of Common Stock
No. _____ 500,000 Shares
THIS CERTIFIES that, for receipt in hand of $10.00 and other
value Melvin Rosen (the "Holder"), is entitled to subscribe for
and purchase from Tel-Com Wireless Cable TV Corporation, a Florida
corporation (the "Company"), upon the terms and conditions set
forth herein, at any time or from time to time after the date
hereof, and before 5:00 p.m. on May 19, 2002, Miami time (the
"Exercise Period"), up to 500,000 shares (the "Warrant Shares")
of the Company's common stock, par value $.001 per share ("Common
Stock"), at a price of $5.00 per Warrant Share (the "Per Share
Exercise Price" and the Per Share Exercise Price multiplied by
the number of Warrant Shares for which this Warrant is being
executed is hereinafter referred to as the "Exercise Price").
This Warrant is the warrant or one of the warrants (collectively,
including any warrants issued upon the exercise or transfer of
any such warrants in whole or in part, the "Warrants") issued
pursuant to the Debt Restructuring Agreement dated as of May 19,
1997 between the Company and Melvin Rosen (the "Agreement"). As
used herein, the term "this Warrant" shall mean and include this
Warrant and any Warrant or Warrants hereafter issued as a
consequence of the exercise or transfer of this Warrant in whole
or in part, and the term "the Holder" shall mean and include any
transferee to whom this Warrant has been transferred in
accordance with the provisions hereof.
1. Exercise of Warrant.
(a) Exercise by Payment of Exercise Price. This
Warrant may be exercised during the Exercise Period, as to the
whole or any lesser number of whole Warrant Shares, by the
surrender of this Warrant (with the election at the end hereof
duly executed) to the Company at its principal office, or at such
other place as is designated in writing by the Company, together
with a certified or bank cashier's check payable to the order of
the Company in an amount equal to the Exercise Price (subject to
adjustment as provided herein).
(b) Cashless Exercise; Appreciation Right.
Notwithstanding anything to the contrary contained herein, at the
option of the Holder, the Exercise Price may be paid by the
cancellation of any indebtedness owed by the Company and/or any
subsidiaries of the Company to the Holder, or the Holder may, in
lieu of exercising this Warrant as provided hereinabove, convert
this Warrant, in whole or in part, into a number of shares of
Common Stock of the Company determined by dividing (A) the
aggregate Current Market Price, at such time, of the shares of
Common Stock otherwise issuable upon the exercise of this Warrant
minus the Exercise Price of such shares by (B) the then Current
Market Price of one such share. Additionally, in lieu of
exercising this Warrant as provided hereinabove, the Holder may
from time to time at the Holder's option require the Company to
purchase this Warrant or any portion hereof, for cash, at a price
equal to the then aggregate Current Market Price of the Common
Stock issuable upon exercise of this Warrant less the Exercise
Price. Upon the Holder's election of this alternative, the
Company shall promptly pay to the Holder such amount in the form
of cash or cashier's check.
2. Certificates for Warrant Shares. Upon each exercise of
the Holder's rights to purchase Warrant Shares, the Holder shall
be deemed to be the holder of record of the Warrant Shares
issuable upon such exercise, notwithstanding that the transfer
books of the Company shall then be closed or certificates
representing such Warrant Shares shall not then have been
actually delivered to the Holder. As soon as practicable after
each such exercise of this Warrant, the Company shall issue and
deliver to the Holder a certificate or certificates for the
Warrant Shares issuable upon such exercise, registered in the
name of the Holder or its designee. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant
evidencing the right of the Holder to purchase the balance of the
Warrant Shares (or portions thereof) subject to purchase
hereunder.
3. Record of Warrants. Any Warrants issued upon the
transfer or exercise in part of this Warrant shall be numbered
and shall be registered in a Warrant Register as they are issued.
The Company shall be entitled to treat the registered holder of
any Warrant on the Warrant Register as the owner in fact thereof
for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to
be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary
or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts
that its participation therein amounts to bad faith. This
Warrant shall be transferable only on the books of the Company
upon delivery thereof duly endorsed by the Holder or by his duly
authorized attorney or representative, or accompanied by proper
evidence of succession, assignment, or authority to transfer. In
all cases of transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Warrant
or Warrants to the person entitled thereto. This Warrant may be
exchanged, at the option of the Holder thereof, for another
Warrant, or other Warrants of different denominations, of like
tenor and representing in the aggregate the right to purchase a
like number of Warrant Shares (or portions thereof), upon
surrender to the Company or its duly authorized agent.
Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to
any person if, in the opinion of counsel to the Company, such
transfer does not comply with the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and
regulations thereunder.
4. Reservation of Common Stock. The Company shall at all
times reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of providing for
the exercise of the Warrants, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The
Company covenants that all shares of Common Stock issuable upon
exercise of this Warrant, upon receipt by the Company of the full
payment therefor, shall be validly issued, fully paid,
nonassessable, and free of preemptive rights.
5. Adjustment of Per Share Exercise Price.
(a) Subject to the provisions of this Section 5, the
Per Share Exercise Price in effect from time to time shall be
subject to adjustment, as follows:
(i) In case the Company shall at any time after
the date hereof (A) declare a dividend on the outstanding Common
Stock payable in shares of its capital stock, (B) subdivide the
outstanding Common Stock, (C) combine the outstanding Common
Stock into a smaller number of shares, or (D) issue any shares of
its capital stock by reclassification of the Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation), then, in each case, the Per Share Exercise Price,
and the number of shares of Common Stock issuable upon exercise
of the Warrants in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination, or reclassification, shall be proportionately
adjusted so that the holders of the Warrants after such time
shall be entitled to receive the aggregate number and kind of
shares which, if such Warrants had been exercised immediately
prior to such time, such holders would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification, at such aggregate
price as the holders of such Warrants would have paid for such
exercise immediately prior to such time. Such adjustment shall
be made successively whenever any event listed above shall occur.
(ii) In case the Company shall issue or fix a
record date for the issuance to all holders of Common Stock of
rights, options, or warrants to subscribe for or purchase Common
Stock (or securities convertible into or exchangeable for Common
Stock) at a price per share (or having a conversion or exchange
price per share, if a security convertible into or exchangeable
for Common Stock) less than the Current Market Price per share of
Common Stock (as determined pursuant to Section 5(b) hereof) on
such record date, then, in each case, the Per Share Exercise
Price shall be adjusted by multiplying the Per Share Exercise
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of
shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so to be offered (or the
aggregate initial conversion or exchange price of the convertible
or exchangeable securities so to be offered) would purchase at
such Current Market Price and the denominator of which shall be
the number of shares of Common Stock outstanding on such record
date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the
convertible or exchangeable securities so to be offered are
initially convertible or exchangeable). Such adjustment shall
become effective at the close of business on such record date;
provided, however, that, to the extent the shares of Common Stock
(or securities convertible into or exchangeable for shares of
Common Stock) are not delivered, the Per Share Exercise Price
shall be readjusted after the expiration of such rights, options,
or warrants (but only with respect to Warrants exercised after
such expiration), to the Per Share Exercise Price which would
then be in effect had the adjustments made upon the issuance of
such rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or
securities convertible into or exchangeable for shares of Common
Stock) actually issued. In case any subscription price may be
paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive absent manifest
error. Shares of Common Stock owned by or held for the account
of the Company or any majority-owned subsidiary shall not be
deemed outstanding for the purpose of any such computation.
(iii) In case the Company shall distribute to all
holders of Common Stock (including any such distribution made to
the shareholders of the Company in connection with a
consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness, cash (other than any
cash dividend which, together with any cash dividends paid within
the 12 months prior to the record date for such distribution,
does not exceed 5% of the Current Market Price at the record date
for such distribution) or assets (other than distributions and
dividends payable in shares of Common Stock), or rights, options
or warrants to subscribe for or purchase Common Stock, or
securities convertible into or exchangeable for shares of Common
Stock (excluding those with respect to the issuance of which an
adjustment of the Per Share Exercise Price is provided pursuant
to Section 5(a)(ii) hereof), then, in each case, the Per Share
Exercise Price shall be adjusted by multiplying the Per Share
Exercise Price in effect immediately prior to the record date for
the determination of shareholders entitled to receive such
distribution by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall
be conclusive absent manifest error) of the portion of the
evidences of indebtedness or assets so to be distributed, or of
such rights, options, or warrants or convertible or exchangeable
securities, or the amount of such cash, applicable to one share,
and the denominator of which shall be such Current Market Price
per share of Common Stock. Such adjustment shall become
effective at the close of business on such record date.
(iv) In case the Company shall issue shares of
Common Stock or rights, options, or warrants to subscribe for or
purchase Common Stock, or securities convertible into or
exchangeable for Common Stock (excluding shares, rights, options,
warrants, or convertible or exchangeable securities issued or
issuable (A) in any of the transactions with respect to which an
adjustment of the Per Share Exercise Price is provided pursuant
to Sections 5(a)(i), 5(a)(ii) or 5(a)(iii) above, (B) upon
exercise of the Warrants, at a price per share (determined, in
the case of such rights, options, warrants, or convertible or
exchangeable securities, by dividing (x) the total amount
received or receivable by the Company in consideration of the
sale and issuance of such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum
aggregate consideration payable to the Company upon exercise,
conversion, or exchange thereof, by (y) the maximum number of
shares covered by such rights, options, warrants, or convertible
or exchangeable securities) lower than the Current Market Price
per share of Common Stock in effect immediately prior to such
issuance or, in the case of the issuance of additional shares of
Common Stock in a private placement at less than 90% of the
Current Market Price of the Common Stock in effect immediately
prior to such issuance, then the Per Share Exercise Price shall
be reduced on the date of such issuance to a price (calculated to
the nearest cent) determined by multiplying the Per Share
Exercise Price in effect immediately prior to such issuance by a
fraction, (a) the numerator of which shall be an amount equal to
the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issuance plus (B) the quotient obtained
by dividing the aggregate consideration received by the Company
upon such issuance by such Current Market Price, and (b) the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such issuance. For
the purposes of such adjustments, the maximum number of shares
which the holders of any such rights, options, warrants, or
convertible or exchangeable securities shall be entitled to
initially subscribe for or purchase or convert or exchange such
securities into shall be deemed to be issued and outstanding as
of the date of such issuance, and the consideration received by
the Company for such rights, options, warrants, or convertible or
exchangeable securities, plus the minimum aggregate consideration
or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares
covered thereby. No further adjustment of the Per Share Exercise
Price shall be made as a result of the actual issuance of shares
of Common Stock on exercise of such rights, options, or warrants
or on conversion or exchange of such convertible or exchangeable
securities. On the expiration or the termination of such rights,
options, or warrants, or the termination of such rights to
convert or exchange, the Per Share Exercise Price shall be
readjusted (but only with respect to Warrants exercised after
such expiration or termination) to such Per Share Exercise Price
as would have been obtained had the adjustments made upon the
issuance of such rights, options, warrants, or convertible or
exchangeable securities been made upon the basis of the delivery
of only the number of shares of Common Stock actually delivered
upon the exercise of such rights, options, or warrants or upon
the conversion or exchange of any such securities; and on any
change of the number of shares of Common Stock deliverable upon
the exercise of any such rights, options or warrants or
conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by
the Company upon such exercise, conversion, or exchange,
including, but not limited to, a change resulting from the
antidilution provisions thereof, the Per Share Exercise Price, as
then in effect, shall forthwith be readjusted (but only with
respect to warrants exercised after such change) to such Per
Share Exercise Price as would have been obtained had an
adjustment been made upon the issuance of such rights, options,
or warrants not exercised prior to such change, on the basis of
such change. In case the Company shall issue shares of Common
Stock or any such rights, options, warrants, or convertible or
exchangeable securities for a consideration consisting, in whole
or in part, of property other than cash or its equivalent, then
the "price per share" and the "consideration received by the
Company" for purposes of the first sentence of this Sec
tion 3(a)(iv) shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be
conclusive absent manifest error. Shares of Common Stock owned
by or held for the account of the Company or any majority-owned
subsidiary shall not be deemed outstanding for the purpose of any
such computation.
(b) For the purpose of any computation under this Sec
tion 5, the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices for the 30 consecutive trading days immediately preceding
the date in question. The closing price for each day shall be
the last reported sales price regular way or, in case no such
reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities
exchange (including, for purposes hereof, the Nasdaq National
Market System) on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the highest reported
bid price for the Common Stock as furnished by the National
Association of Securities Dealers, Inc. through Nasdaq or a
similar organization if Nasdaq is no longer reporting such
information. If on any such date the Common Stock is not listed
or admitted to trading on any national securities exchange and is
not quoted by Nasdaq or any similar organization, the fair value
of a share of Common Stock on such date as determined in good
faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error, shall be
used.
(c) No adjustment in the Per Share Exercise Price shall
be required if such adjustment is less than $.05; provided,
however, that any adjustments which by reason of this Section 5
are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the
nearest one thousandth of a share, as the case may be.
(d) In any case in which this Section 5 shall require
that an adjustment in the Per Share Exercise Price be made
effective as of a record date for a specified event, the Company
may elect to defer, until the occurrence of such event, issuing
to the Holder of the Warrant, if any Holder has exercised a
Warrant after such record date, the shares of Common Stock, if
any, issuable upon such exercise over and above the shares of
Common Stock, if any, issuable upon such exercise on the basis of
the Per Share Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
exercising Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(e) Upon each adjustment of the Per Share Exercise
Price as a result of the calculations made in Sections 5(a)(ii),
5(a)(iii) or 5(a)(iv) hereof, the Warrant shall thereafter
evidence the right to purchase, at the adjusted Per Share
Exercise Price, that number of shares (calculated to the nearest
thousandth) obtained by dividing (A) the product obtained by
multiplying the number of shares purchasable upon exercise of the
Warrant prior to adjustment of the number of shares by the Per
Share Exercise Price in effect prior to adjustment of the Per
Share Exercise Price by (B) the Per Share Exercise Price in
effect after such adjustment of the Per Share Exercise Price.
(f) In case of any capital reorganization, other than
in the cases referred to in Section 5(a) hereof, or the consoli
dation or merger of the Company with or into another corporation
(other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock or the
conversion of such outstanding shares of Common Stock into shares
of other stock or other securities or property), or the sale of
the property of the Company as an entirety or substantially as an
entirety (collectively such actions being hereinafter referred to
as "Reorganizations"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the number of shares of
Common Stock theretofore deliverable) the number of shares of
stock or other securities or property to which a holder of the
number of shares of Common Stock which would otherwise have been
deliverable upon the exercise of such Warrant would have been
entitled upon such Reorganization if such Warrant had been
exercised in full immediately prior to such Reorganization. In
case of any Reorganization, appropriate adjustment, as determined
in good faith by the Board of Directors of the Company, shall be
made in the application of the provisions herein set forth with
respect to the rights and interests of Warrant holders so that
the provisions set forth herein shall thereafter be applicable,
as nearly as possible, in relation to any shares or other
property thereafter deliverable upon exercise of Warrants. Any
such adjustment shall be made by and set forth in a supplemental
agreement between the Company, or any successor thereto, and
American Stock Transfer & Trust Company, and shall for all
purposes hereof conclusively be deemed to be an appropriate
adjustment. The Company shall not effect any such
Reorganization, unless upon or prior to the consummation thereof
the successor corporation, or if the Company shall be the
surviving corporation in any such Reorganization and is not the
issuer of the shares of stock or other securities or property to
be delivered to holders of shares of the Common Stock outstanding
at the effective time thereof, then such issuer, shall assume by
written instrument the obligation to deliver to the registered
holder of the Warrants such shares of stock, securities, cash or
other property as such holder shall be entitled to purchase in
accordance with the foregoing provisions. In the event of sale
or conveyance or other transfer of all or substantially all of
the assets of the Company as a part of a plan for liquidation of
the Company, all rights to exercise any Warrant shall terminate
30 days after the Company gives written notice to each registered
holder of an Warrant Certificate that such sale or conveyance of
other transfer has been consummated.
(g) In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of the Warrants
(other than a change in par value or from no par value to a
specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or
more classes or series of shares), the holders of the Warrants
shall have the right thereafter to receive upon exercise of the
Warrants solely the kind and amount of shares of stock and other
securities, property, cash, or any combination thereof receivable
upon such reclassification or change by a holder of the number of
shares of Common Stock for which the Warrants might have been
exercised immediately prior to such reclassification or change.
Thereafter, appropriate provision shall be as nearly equivalent
as practicable to the adjustments in Section 5. The above
provisions of this Section 5(g) shall similarly apply to
successive reclassifications and changes of shares of Common
Stock.
(h) Whenever the Per Share Exercise Price is adjusted
as provided in this Section 5, the Company will promptly make
available to the Holders of the Warrant Certificates, at their
addresses listed on the register maintained for the purpose by
the Company, a certificate of the Company's Chief Financial
Officer setting forth such calculation.
(i) Whenever any adjustment is made pursuant to this
Section 5, the Company shall cause notice of such adjustment to
be mailed to each registered holder of a Warrant Certificate
within 15 Business Days (as hereinafter defined) thereafter, such
notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any
adjustments, and (iii) the Per Share Exercise Price, the number
of shares or the securities or other property purchasable upon
exercise of each Warrant after giving effect to such adjustment.
For purposes hereof, "Business Day" shall mean any day other than
a Saturday, a Sunday, or a day on which banking institutions in
the State of New York are authorized or obligated by law or
executive order to close.
(j) Irrespective of any adjustments pursuant to this
Section 5, Warrant Certificates theretofore or thereafter issued
need not be amended or replaced, but certificates thereafter
issued shall bear an appropriate legend or other notice of any
adjustments.
(k) The Company shall not be required upon the exercise
of any Warrant to issue fractional shares of Common Stock which
may result from adjustments in accordance with this Section 5 to
the Per Share Exercise Price or number of shares of Common Stock
purchasable under each Warrant. If more than one Warrant is
exercised at one time by the same registered holder, the number
of full shares of Common Stock which shall be deliverable shall
be computed based on the number of shares deliverable in exchange
for the aggregate number of Warrants exercised. With respect to
any final fraction of a share called for upon the exercise of any
Warrant or Warrants, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same
fraction of the Current Market Price of a share of Common Stock
calculated in accordance with Section 5(b).
6. Consolidation, Merger and Sale.
(a) In case of any consolidation with or merger of the
Company with or into another corporation (other than a merger or
consolidation in which the Company is the surviving or continuing
corporation), or in case of any sale, lease, or conveyance to
another corporation of the property and assets of any nature of
the Company as an entirety or substantially as an entirety, such
successor, leasing, or purchasing corporation, as the case may
be, shall (i) execute with the Holder an agreement providing that
the Holder shall have the right thereafter to receive upon
exercise of this Warrant solely the kind and amount of shares of
stock and other securities, property, cash, or any combination
thereof receivable upon such consolidation, merger, sale, lease,
or conveyance by a holder of the number of shares of Common Stock
for which this Warrant might have been exercised immediately
prior to such consolidation, merger, sale, lease, or conveyance,
and (ii) make effective provision in its certificate of
incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which
shall be as nearly equivalent as practicable to the adjustments
provided for in Section 5.
(b) The above provision of this Section 6 shall
similarly apply to successive consolidations, mergers, sales,
leases, or conveyances.
7. Notice of Events. In case at any time the Company shall
propose:
(a) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or make any
other distribution (other than regularly scheduled cash dividends
which are not in a greater amount per share than the most recent
such cash dividend) to all holders of Common Stock; or
(b) to issue any rights, warrants or other securities
to all holders of Common Stock entitling them to purchase any
additional shares of Common Stock or any other rights, warrants,
or other securities; or
(c) to effect any reclassification or change of
outstanding shares of Common Stock, or any consolidation, merger,
sale, lease, or conveyance of property, described in Section 6;
or
(d) to effect any liquidation, dissolution, or winding-
up of the Company; or
(e) to take any other action which would cause an
adjustment to the Per Share Exercise Price;
then, and in any one or more of such cases, the Company shall
give written notice thereof, by registered mail, postage prepaid,
to the Holder at the Holder's address as it shall appear in the
Warrant Register, mailed at least 15 days prior to (i) the date
as of which the holders of record of shares of Common Stock to be
entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date
on which any such reclassification, change of outstanding shares
of Common Stock, consolidation, merger, sale, lease, conveyance
of property, liquidation, dissolution, or winding-up is expected
to become effective, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to
exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding
shares, consolidation, merger, sale, lease, conveyance of
property, liquidation, dissolution, or winding-up, or (iii) the
date of such action which would require an adjustment to the Per
Share Exercise Price pursuant to Section 5 hereof.
8. Expenses of Issuance. The issuance of any shares or
other securities upon the exercise of this Warrant, and the
delivery of certificates or other instruments representing such
shares or other securities, shall be made without charge to the
Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue
and delivery of any certificate in a name other than that of the
Holder and the Company shall not be required to issue or deliver
any such certificate unless and until the person or persons
requesting the issue 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.
9. Registration. The Company shall register the Warrant
Shares pursuant to Article 7 of the Debt Restructuring Agreement
dated May 19, 1997 by and between the Company and Melvin Rosen,
which is incorporated herein by this reference.
10. Legend. Unless registered pursuant to the provisions
incorporated by reference in Section 9 hereof, the Warrant Shares
issued upon exercise of the Warrants shall be subject to a stop
transfer order and the certificate or certificates evidencing
such securities shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY APPLICABLE STATE LAW. THEY
MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED WITHOUT
(1) REGISTRATION UNDER THE ACT AND ANY
APPLICABLE STATE LAW, OR (2) AN OPINION
(REASONABLY SATISFACTORY TO THE COMPANY) OF
COUNSEL THAT REGISTRATION IS NOT REQUIRED.
11. Lost or Stolen Warrants. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction, or
mutilation of any Warrant (and upon surrender of any Warrant if
mutilated), and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the
Holder thereof a new Warrant of like date, tenor, and
denomination.
12. Status of Holder. The Holder of any Warrant shall not
have, solely on account of such status, any rights of a
shareholder of the Company, either at law or in equity, or to any
notice of meetings of shareholders or of any other proceedings of
the Company, except as provided in this Warrant.
13. Governing Law; Jurisdiction. This Warrant shall be
construed in accordance with the laws of the State of Florida
applicable to contracts made and performed within such State,
without regard to principles of conflicts of law. The Company
irrevocably consents to the jurisdiction of the courts of Dade
County, Florida and of the federal courts located in the Southern
District of Florida in connection with any action or proceeding
arising out of or relating to this Warrant, any document or
instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or
any such document or instrument.
Dated: May 19, 1997
TEL-COM WIRELESS CABLE TV CORPORATION, a Florida corporation
/s/ Melvin Rosen
Melvin Rosen
President
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the attached Warrant.)
FOR VALUE RECEIVED, hereby sells,
assigns, and transfers unto a Warrant to
purchase shares of Common Stock of the
Company, par value $.001 per share, together with all right,
title, and interest therein, and does hereby irrevocably
constitute and appoint attorney to transfer
such Warrant on the books of the Company, with full power of
substitution.
Dated:
Signature:
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
To: Tel-Com Wireless Cable TV Corporation
[insert mailing address]
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to
purchase Warrant Shares covered by the within
Warrant in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and
delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the
Warrant Shares covered by the within Warrant, that a new Warrant
for the balance of the Warrant Shares covered by the within
Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below.
Dated: Name:
(Print)
Address:
(Signature)
EXHIBIT 4
THE SHARES ISSUABLE UPON EXERCISE OF THE
WARRANT REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE LAW. SUCH SHARES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR
PLEDGED WITHOUT (1) REGISTRATION UNDER THE
ACT AND ANY APPLICABLE STATE LAW, OR (2) AN
OPINION (REASONABLY SATISFACTORY TO THE
COMPANY) OF COUNSEL THAT REGISTRATION IS NOT
REQUIRED.
THE TRANSFER OF THIS WARRANT IS
RESTRICTED AS DESCRIBED HEREIN.
TEL-COM WIRELESS CABLE TV CORPORATION,
a Florida corporation
Warrant for the Purchase of Common Stock
No. _____ 500,000 Shares
THIS CERTIFIES that, for receipt in hand of $10.00 and other
value Melvin Rosen (the "Holder"), is entitled to subscribe for and
purchase from Tel-Com Wireless Cable TV Corporation, a Florida
corporation (the "Company"), upon the terms and conditions set forth
herein, at any time or from time to time after the date hereof,
and before 5:00 p.m. on May 19, 2002, Miami time (the "Exercise Period"),
up to 500,000 shares (the "Warrant Shares") of the Company's common stock,
par value $.001 per share ("Common Stock"), at a price of $1.00
per Warrant Share (the "Per Share Exercise Price" and the Per Share
Exercise Price multiplied by the number of Warrant Shares for
which this Warrant is being executed is hereinafter referred
to as the "Exercise Price"). This Warrant is the warrant or
one of the warrants (collectively, including any warrants issued upon
the exercise or transfer of any such warrants in whole or
in part, the "Warrants") issued pursuant to the Debt Restructuring
Agreement dated as of May 19, 1997 between the Company and Melvin
Rosen (the "Agreement"). As used herein, the term "this Warrant"
shall mean and include this Warrant and any Warrant or Warrants
hereafter issued as a consequence of the exercise or transfer
of this Warrant in whole or in part, and the term "the Holder"
shall mean and include any transferee to whom this Warrant
has been transferred in accordance with the provisions hereof.
1. Exercise of Warrant.
(a) Exercise by Payment of Exercise Price. This
Warrant may be exercised during the Exercise Period, as to the
whole or any lesser number of whole Warrant Shares, by the
surrender of this Warrant (with the election at the end hereof
duly executed) to the Company at its principal office, or at such
other place as is designated in writing by the Company, together
with a certified or bank cashier's check payable to the order of
the Company in an amount equal to the Exercise Price (subject to
adjustment as provided herein).
(b) Cashless Exercise; Appreciation Right.
Notwithstanding anything to the contrary contained herein, at the
option of the Holder, the Exercise Price may be paid by the
cancellation of any indebtedness owed by the Company and/or any
subsidiaries of the Company to the Holder, or the Holder may, in
lieu of exercising this Warrant as provided hereinabove, convert
this Warrant, in whole or in part, into a number of shares of
Common Stock of the Company determined by dividing (A) the
aggregate Current Market Price, at such time, of the shares of
Common Stock otherwise issuable upon the exercise of this Warrant
minus the Exercise Price of such shares by (B) the then Current
Market Price of one such share. Additionally, in lieu of
exercising this Warrant as provided hereinabove, the Holder may
from time to time at the Holder's option require the Company to
purchase this Warrant or any portion hereof, for cash, at a price
equal to the then aggregate Current Market Price of the Common
Stock issuable upon exercise of this Warrant less the Exercise
Price. Upon the Holder's election of this alternative, the
Company shall promptly pay to the Holder such amount in the form
of cash or cashier's check.
2. Certificates for Warrant Shares. Upon each exercise of
the Holder's rights to purchase Warrant Shares, the Holder shall
be deemed to be the holder of record of the Warrant Shares
issuable upon such exercise, notwithstanding that the transfer
books of the Company shall then be closed or certificates
representing such Warrant Shares shall not then have been
actually delivered to the Holder. As soon as practicable after
each such exercise of this Warrant, the Company shall issue and
deliver to the Holder a certificate or certificates for the
Warrant Shares issuable upon such exercise, registered in the
name of the Holder or its designee. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant
evidencing the right of the Holder to purchase the balance of the
Warrant Shares (or portions thereof) subject to purchase
hereunder.
3. Record of Warrants. Any Warrants issued upon the
transfer or exercise in part of this Warrant shall be numbered
and shall be registered in a Warrant Register as they are issued.
The Company shall be entitled to treat the registered holder of
any Warrant on the Warrant Register as the owner in fact thereof
for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any
registration or transfer of Warrants which are registered or to
be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary
or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts
that its participation therein amounts to bad faith. This
Warrant shall be transferable only on the books of the Company
upon delivery thereof duly endorsed by the Holder or by his duly
authorized attorney or representative, or accompanied by proper
evidence of succession, assignment, or authority to transfer. In
all cases of transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Warrant
or Warrants to the person entitled thereto. This Warrant may be
exchanged, at the option of the Holder thereof, for another
Warrant, or other Warrants of different denominations, of like
tenor and representing in the aggregate the right to purchase a
like number of Warrant Shares (or portions thereof), upon
surrender to the Company or its duly authorized agent.
Notwithstanding the foregoing, the Company shall have no
obligation to cause Warrants to be transferred on its books to
any person if, in the opinion of counsel to the Company, such
transfer does not comply with the provisions of the Securities
Act of 1933, as amended (the "Act"), and the rules and
regulations thereunder.
4. Reservation of Common Stock. The Company shall at all
times reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of providing for
the exercise of the Warrants, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The
Company covenants that all shares of Common Stock issuable upon
exercise of this Warrant, upon receipt by the Company of the full
payment therefor, shall be validly issued, fully paid,
nonassessable, and free of preemptive rights.
5. Adjustment of Per Share Exercise Price.
(a) Subject to the provisions of this Section 5, the
Per Share Exercise Price in effect from time to time shall be
subject to adjustment, as follows:
(i) In case the Company shall at any time after
the date hereof (A) declare a dividend on the outstanding Common
Stock payable in shares of its capital stock, (B) subdivide the
outstanding Common Stock, (C) combine the outstanding Common
Stock into a smaller number of shares, or (D) issue any shares of
its capital stock by reclassification of the Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
corporation), then, in each case, the Per Share Exercise Price,
and the number of shares of Common Stock issuable upon exercise
of the Warrants in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination, or reclassification, shall be proportionately
adjusted so that the holders of the Warrants after such time
shall be entitled to receive the aggregate number and kind of
shares which, if such Warrants had been exercised immediately
prior to such time, such holders would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification, at such aggregate
price as the holders of such Warrants would have paid for such
exercise immediately prior to such time. Such adjustment shall
be made successively whenever any event listed above shall occur.
(ii) In case the Company shall issue or fix a
record date for the issuance to all holders of Common Stock of
rights, options, or warrants to subscribe for or purchase Common
Stock (or securities convertible into or exchangeable for Common
Stock) at a price per share (or having a conversion or exchange
price per share, if a security convertible into or exchangeable
for Common Stock) less than the Current Market Price per share of
Common Stock (as determined pursuant to Section 5(b) hereof) on
such record date, then, in each case, the Per Share Exercise
Price shall be adjusted by multiplying the Per Share Exercise
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of
shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so to be offered (or the
aggregate initial conversion or exchange price of the convertible
or exchangeable securities so to be offered) would purchase at
such Current Market Price and the denominator of which shall be
the number of shares of Common Stock outstanding on such record
date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the
convertible or exchangeable securities so to be offered are
initially convertible or exchangeable). Such adjustment shall
become effective at the close of business on such record date;
provided, however, that, to the extent the shares of Common Stock
(or securities convertible into or exchangeable for shares of
Common Stock) are not delivered, the Per Share Exercise Price
shall be readjusted after the expiration of such rights, options,
or warrants (but only with respect to Warrants exercised after
such expiration), to the Per Share Exercise Price which would
then be in effect had the adjustments made upon the issuance of
such rights, options, or warrants been made upon the basis of
delivery of only the number of shares of Common Stock (or
securities convertible into or exchangeable for shares of Common
Stock) actually issued. In case any subscription price may be
paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be conclusive absent manifest
error. Shares of Common Stock owned by or held for the account
of the Company or any majority-owned subsidiary shall not be
deemed outstanding for the purpose of any such computation.
(iii) In case the Company shall distribute to all
holders of Common Stock (including any such distribution made to
the shareholders of the Company in connection with a
consolidation or merger in which the Company is the continuing
corporation) evidences of its indebtedness, cash (other than any
cash dividend which, together with any cash dividends paid within
the 12 months prior to the record date for such distribution,
does not exceed 5% of the Current Market Price at the record date
for such distribution) or assets (other than distributions and
dividends payable in shares of Common Stock), or rights, options
or warrants to subscribe for or purchase Common Stock, or
securities convertible into or exchangeable for shares of Common
Stock (excluding those with respect to the issuance of which an
adjustment of the Per Share Exercise Price is provided pursuant
to Section 5(a)(ii) hereof), then, in each case, the Per Share
Exercise Price shall be adjusted by multiplying the Per Share
Exercise Price in effect immediately prior to the record date for
the determination of shareholders entitled to receive such
distribution by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall
be conclusive absent manifest error) of the portion of the
evidences of indebtedness or assets so to be distributed, or of
such rights, options, or warrants or convertible or exchangeable
securities, or the amount of such cash, applicable to one share,
and the denominator of which shall be such Current Market Price
per share of Common Stock. Such adjustment shall become
effective at the close of business on such record date.
(iv) In case the Company shall issue shares of
Common Stock or rights, options, or warrants to subscribe for or
purchase Common Stock, or securities convertible into or
exchangeable for Common Stock (excluding shares, rights, options,
warrants, or convertible or exchangeable securities issued or
issuable (A) in any of the transactions with respect to which an
adjustment of the Per Share Exercise Price is provided pursuant
to Sections 5(a)(i), 5(a)(ii) or 5(a)(iii) above, (B) upon
exercise of the Warrants, at a price per share (determined, in
the case of such rights, options, warrants, or convertible or
exchangeable securities, by dividing (x) the total amount
received or receivable by the Company in consideration of the
sale and issuance of such rights, options, warrants, or
convertible or exchangeable securities, plus the minimum
aggregate consideration payable to the Company upon exercise,
conversion, or exchange thereof, by (y) the maximum number of
shares covered by such rights, options, warrants, or convertible
or exchangeable securities) lower than the Current Market Price
per share of Common Stock in effect immediately prior to such
issuance or, in the case of the issuance of additional shares of
Common Stock in a private placement at less than 90% of the
Current Market Price of the Common Stock in effect immediately
prior to such issuance, then the Per Share Exercise Price shall
be reduced on the date of such issuance to a price (calculated to
the nearest cent) determined by multiplying the Per Share
Exercise Price in effect immediately prior to such issuance by a
fraction, (a) the numerator of which shall be an amount equal to
the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issuance plus (B) the quotient obtained
by dividing the aggregate consideration received by the Company
upon such issuance by such Current Market Price, and (b) the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such issuance. For
the purposes of such adjustments, the maximum number of shares
which the holders of any such rights, options, warrants, or
convertible or exchangeable securities shall be entitled to
initially subscribe for or purchase or convert or exchange such
securities into shall be deemed to be issued and outstanding as
of the date of such issuance, and the consideration received by
the Company for such rights, options, warrants, or convertible or
exchangeable securities, plus the minimum aggregate consideration
or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares
covered thereby. No further adjustment of the Per Share Exercise
Price shall be made as a result of the actual issuance of shares
of Common Stock on exercise of such rights, options, or warrants
or on conversion or exchange of such convertible or exchangeable
securities. On the expiration or the termination of such rights,
options, or warrants, or the termination of such rights to
convert or exchange, the Per Share Exercise Price shall be
readjusted (but only with respect to Warrants exercised after
such expiration or termination) to such Per Share Exercise Price
as would have been obtained had the adjustments made upon the
issuance of such rights, options, warrants, or convertible or
exchangeable securities been made upon the basis of the delivery
of only the number of shares of Common Stock actually delivered
upon the exercise of such rights, options, or warrants or upon
the conversion or exchange of any such securities; and on any
change of the number of shares of Common Stock deliverable upon
the exercise of any such rights, options or warrants or
conversion or exchange of such convertible or exchangeable
securities or any change in the consideration to be received by
the Company upon such exercise, conversion, or exchange,
including, but not limited to, a change resulting from the
antidilution provisions thereof, the Per Share Exercise Price, as
then in effect, shall forthwith be readjusted (but only with
respect to warrants exercised after such change) to such Per
Share Exercise Price as would have been obtained had an
adjustment been made upon the issuance of such rights, options,
or warrants not exercised prior to such change, on the basis of
such change. In case the Company shall issue shares of Common
Stock or any such rights, options, warrants, or convertible or
exchangeable securities for a consideration consisting, in whole
or in part, of property other than cash or its equivalent, then
the "price per share" and the "consideration received by the
Company" for purposes of the first sentence of this Sec
tion 3(a)(iv) shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be
conclusive absent manifest error. Shares of Common Stock owned
by or held for the account of the Company or any majority-owned
subsidiary shall not be deemed outstanding for the purpose of any
such computation.
(b) For the purpose of any computation under this Sec
tion 5, the Current Market Price per share of Common Stock on any
date shall be deemed to be the average of the daily closing
prices for the 30 consecutive trading days immediately preceding
the date in question. The closing price for each day shall be
the last reported sales price regular way or, in case no such
reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities
exchange (including, for purposes hereof, the Nasdaq National
Market System) on which the Common Stock is listed or admitted to
trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the highest reported
bid price for the Common Stock as furnished by the National
Association of Securities Dealers, Inc. through Nasdaq or a
similar organization if Nasdaq is no longer reporting such
information. If on any such date the Common Stock is not listed
or admitted to trading on any national securities exchange and is
not quoted by Nasdaq or any similar organization, the fair value
of a share of Common Stock on such date as determined in good
faith by the Board of Directors of the Company, whose
determination shall be conclusive absent manifest error, shall be
used.
(c) No adjustment in the Per Share Exercise Price shall
be required if such adjustment is less than $.05; provided,
however, that any adjustments which by reason of this Section 5
are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations
under this Section 5 shall be made to the nearest cent or to the
nearest one thousandth of a share, as the case may be.
(d) In any case in which this Section 5 shall require
that an adjustment in the Per Share Exercise Price be made
effective as of a record date for a specified event, the Company
may elect to defer, until the occurrence of such event, issuing
to the Holder of the Warrant, if any Holder has exercised a
Warrant after such record date, the shares of Common Stock, if
any, issuable upon such exercise over and above the shares of
Common Stock, if any, issuable upon such exercise on the basis of
the Per Share Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
exercising Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(e) Upon each adjustment of the Per Share Exercise
Price as a result of the calculations made in Sections 5(a)(ii),
5(a)(iii) or 5(a)(iv) hereof, the Warrant shall thereafter
evidence the right to purchase, at the adjusted Per Share
Exercise Price, that number of shares (calculated to the nearest
thousandth) obtained by dividing (A) the product obtained by
multiplying the number of shares purchasable upon exercise of the
Warrant prior to adjustment of the number of shares by the Per
Share Exercise Price in effect prior to adjustment of the Per
Share Exercise Price by (B) the Per Share Exercise Price in
effect after such adjustment of the Per Share Exercise Price.
(f) In case of any capital reorganization, other than
in the cases referred to in Section 5(a) hereof, or the consoli
dation or merger of the Company with or into another corporation
(other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock or the
conversion of such outstanding shares of Common Stock into shares
of other stock or other securities or property), or the sale of
the property of the Company as an entirety or substantially as an
entirety (collectively such actions being hereinafter referred to
as "Reorganizations"), there shall thereafter be deliverable upon
exercise of any Warrant (in lieu of the number of shares of
Common Stock theretofore deliverable) the number of shares of
stock or other securities or property to which a holder of the
number of shares of Common Stock which would otherwise have been
deliverable upon the exercise of such Warrant would have been
entitled upon such Reorganization if such Warrant had been
exercised in full immediately prior to such Reorganization. In
case of any Reorganization, appropriate adjustment, as determined
in good faith by the Board of Directors of the Company, shall be
made in the application of the provisions herein set forth with
respect to the rights and interests of Warrant holders so that
the provisions set forth herein shall thereafter be applicable,
as nearly as possible, in relation to any shares or other
property thereafter deliverable upon exercise of Warrants. Any
such adjustment shall be made by and set forth in a supplemental
agreement between the Company, or any successor thereto, and
American Stock Transfer & Trust Company, and shall for all
purposes hereof conclusively be deemed to be an appropriate
adjustment. The Company shall not effect any such
Reorganization, unless upon or prior to the consummation thereof
the successor corporation, or if the Company shall be the
surviving corporation in any such Reorganization and is not the
issuer of the shares of stock or other securities or property to
be delivered to holders of shares of the Common Stock outstanding
at the effective time thereof, then such issuer, shall assume by
written instrument the obligation to deliver to the registered
holder of the Warrants such shares of stock, securities, cash or
other property as such holder shall be entitled to purchase in
accordance with the foregoing provisions. In the event of sale
or conveyance or other transfer of all or substantially all of
the assets of the Company as a part of a plan for liquidation of
the Company, all rights to exercise any Warrant shall terminate
30 days after the Company gives written notice to each registered
holder of an Warrant Certificate that such sale or conveyance of
other transfer has been consummated.
(g) In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of the Warrants
(other than a change in par value or from no par value to a
specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or
more classes or series of shares), the holders of the Warrants
shall have the right thereafter to receive upon exercise of the
Warrants solely the kind and amount of shares of stock and other
securities, property, cash, or any combination thereof receivable
upon such reclassification or change by a holder of the number of
shares of Common Stock for which the Warrants might have been
exercised immediately prior to such reclassification or change.
Thereafter, appropriate provision shall be as nearly equivalent
as practicable to the adjustments in Section 5. The above
provisions of this Section 5(g) shall similarly apply to
successive reclassifications and changes of shares of Common
Stock.
(h) Whenever the Per Share Exercise Price is adjusted
as provided in this Section 5, the Company will promptly make
available to the Holders of the Warrant Certificates, at their
addresses listed on the register maintained for the purpose by
the Company, a certificate of the Company's Chief Financial
Officer setting forth such calculation.
(i) Whenever any adjustment is made pursuant to this
Section 5, the Company shall cause notice of such adjustment to
be mailed to each registered holder of a Warrant Certificate
within 15 Business Days (as hereinafter defined) thereafter, such
notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any
adjustments, and (iii) the Per Share Exercise Price, the number
of shares or the securities or other property purchasable upon
exercise of each Warrant after giving effect to such adjustment.
For purposes hereof, "Business Day" shall mean any day other than
a Saturday, a Sunday, or a day on which banking institutions in
the State of New York are authorized or obligated by law or
executive order to close.
(j) Irrespective of any adjustments pursuant to this
Section 5, Warrant Certificates theretofore or thereafter issued
need not be amended or replaced, but certificates thereafter
issued shall bear an appropriate legend or other notice of any
adjustments.
(k) The Company shall not be required upon the exercise
of any Warrant to issue fractional shares of Common Stock which
may result from adjustments in accordance with this Section 5 to
the Per Share Exercise Price or number of shares of Common Stock
purchasable under each Warrant. If more than one Warrant is
exercised at one time by the same registered holder, the number
of full shares of Common Stock which shall be deliverable shall
be computed based on the number of shares deliverable in exchange
for the aggregate number of Warrants exercised. With respect to
any final fraction of a share called for upon the exercise of any
Warrant or Warrants, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same
fraction of the Current Market Price of a share of Common Stock
calculated in accordance with Section 5(b).
6. Consolidation, Merger and Sale.
(a) In case of any consolidation with or merger of the
Company with or into another corporation (other than a merger or
consolidation in which the Company is the surviving or continuing
corporation), or in case of any sale, lease, or conveyance to
another corporation of the property and assets of any nature of
the Company as an entirety or substantially as an entirety, such
successor, leasing, or purchasing corporation, as the case may
be, shall (i) execute with the Holder an agreement providing that
the Holder shall have the right thereafter to receive upon
exercise of this Warrant solely the kind and amount of shares of
stock and other securities, property, cash, or any combination
thereof receivable upon such consolidation, merger, sale, lease,
or conveyance by a holder of the number of shares of Common Stock
for which this Warrant might have been exercised immediately
prior to such consolidation, merger, sale, lease, or conveyance,
and (ii) make effective provision in its certificate of
incorporation or otherwise, if necessary, to effect such
agreement. Such agreement shall provide for adjustments which
shall be as nearly equivalent as practicable to the adjustments
provided for in Section 5.
(b) The above provision of this Section 6 shall
similarly apply to successive consolidations, mergers, sales,
leases, or conveyances.
7. Notice of Events. In case at any time the Company shall
propose:
(a) to pay any dividend or make any distribution on
shares of Common Stock in shares of Common Stock or make any
other distribution (other than regularly scheduled cash dividends
which are not in a greater amount per share than the most recent
such cash dividend) to all holders of Common Stock; or
(b) to issue any rights, warrants or other securities
to all holders of Common Stock entitling them to purchase any
additional shares of Common Stock or any other rights, warrants,
or other securities; or
(c) to effect any reclassification or change of
outstanding shares of Common Stock, or any consolidation, merger,
sale, lease, or conveyance of property, described in Section 6;
or
(d) to effect any liquidation, dissolution, or winding-
up of the Company; or
(e) to take any other action which would cause an
adjustment to the Per Share Exercise Price;
then, and in any one or more of such cases, the Company shall
give written notice thereof, by registered mail, postage prepaid,
to the Holder at the Holder's address as it shall appear in the
Warrant Register, mailed at least 15 days prior to (i) the date
as of which the holders of record of shares of Common Stock to be
entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date
on which any such reclassification, change of outstanding shares
of Common Stock, consolidation, merger, sale, lease, conveyance
of property, liquidation, dissolution, or winding-up is expected
to become effective, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to
exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding
shares, consolidation, merger, sale, lease, conveyance of
property, liquidation, dissolution, or winding-up, or (iii) the
date of such action which would require an adjustment to the Per
Share Exercise Price pursuant to Section 5 hereof.
8. Expenses of Issuance. The issuance of any shares or
other securities upon the exercise of this Warrant, and the
delivery of certificates or other instruments representing such
shares or other securities, shall be made without charge to the
Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue
and delivery of any certificate in a name other than that of the
Holder and the Company shall not be required to issue or deliver
any such certificate unless and until the person or persons
requesting the issue 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.
9. Registration. The Company shall register the Warrant
Shares pursuant to Article 7 of the Debt Restructuring Agreement
dated May 19, 1997 by and between the Company and Melvin Rosen,
which is incorporated herein by this reference.
10. Legend. Unless registered pursuant to the provisions
incorporated by reference in Section 9 hereof, the Warrant Shares
issued upon exercise of the Warrants shall be subject to a stop
transfer order and the certificate or certificates evidencing
such securities shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY APPLICABLE STATE LAW. THEY
MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR PLEDGED WITHOUT
(1) REGISTRATION UNDER THE ACT AND ANY
APPLICABLE STATE LAW, OR (2) AN OPINION
(REASONABLY SATISFACTORY TO THE COMPANY) OF
COUNSEL THAT REGISTRATION IS NOT REQUIRED.
11. Lost or Stolen Warrants. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction, or
mutilation of any Warrant (and upon surrender of any Warrant if
mutilated), and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the
Holder thereof a new Warrant of like date, tenor, and
denomination.
12. Status of Holder. The Holder of any Warrant shall not
have, solely on account of such status, any rights of a
shareholder of the Company, either at law or in equity, or to any
notice of meetings of shareholders or of any other proceedings of
the Company, except as provided in this Warrant.
13. Governing Law; Jurisdiction. This Warrant shall be
construed in accordance with the laws of the State of Florida
applicable to contracts made and performed within such State,
without regard to principles of conflicts of law. The Company
irrevocably consents to the jurisdiction of the courts of Dade
County, Florida and of the federal courts located in the Southern
District of Florida in connection with any action or proceeding
arising out of or relating to this Warrant, any document or
instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or
any such document or instrument.
Dated: May 19, 1997
TEL-COM WIRELESS CABLE TV CORPORATION, a Florida corporation
/s/ Melvin Rosen
Melvin Rosen
President
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the attached Warrant.)
FOR VALUE RECEIVED, hereby sells,
assigns, and transfers unto a Warrant to
purchase shares of Common Stock of the
Company, par value $.001 per share, together with all right,
title, and interest therein, and does hereby irrevocably
constitute and appoint attorney to transfer
such Warrant on the books of the Company, with full power of
substitution.
Dated:
Signature:
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
To: Tel-Com Wireless Cable TV Corporation
[insert mailing address]
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to
purchase Warrant Shares covered by the within
Warrant in accordance with the terms thereof, and requests that
certificates for such securities be issued in the name of, and
delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the
Warrant Shares covered by the within Warrant, that a new Warrant
for the balance of the Warrant Shares covered by the within
Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below.
Dated: Name:
(Print)
Address:
(Signature)
