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Exhibit 10.11
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ("WARRANTS") AND THE UNDERLYING
WARRANT SHARES ("WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE WARRANTS MAY NOT BE
EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, THE WARRANTS AND WARRANT SHARES
MAY NOT BE OFFERED OR SOLD TO ANY U.S. PERSON, THE WARRANTS MAY NOT BE EXERCISED
IN THE UNITED STATES (EXCEPT AS PERMITTED BY REGULATION S), AND THE WARRANT
SHARES MAY NOT BE DELIVERED IN THE UNITED STATES, UNLESS, IN EACH CASE, THE
WARRANTS AND WARRANT SHARES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AS EVIDENCED BY AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
PLEDGED, HYPOTHECATED OR ENCUMBERED EXCEPT UNDER THE LAWS OF DESCENT AND
DISTRIBUTION OR BY OPERATION OF LAW.
WARRANTS TO PURCHASE COMMON STOCK
MICROTEL INTERNATIONAL, INC., a Delaware corporation (the "Company")
hereby grants to Yorkton Securities, Inc. (the "Holder") _____________________
(____) non-transferable warrants (the "Warrants") for the purchase of common
stock of the Company (the "Common Stock"), with each whole Warrant entitling the
Holder to purchase one share of Common Stock (each a "Warrant Share" and
collectively the "Warrant Shares") on the terms and subject to the conditions
set forth herein. The Warrants have been issued pursuant to an Agency Agreement
dated for reference purposes as of March 21, 1997 entered into between the
Holder and the Company (the "Agency Agreement") and as part of a larger private
offering by the Company described in that certain Confidential Offering
Memorandum of the Company dated March 21, 1997.
1. TERM. The Warrants may be exercised, in whole or in part, at any time
and from time to time from the date hereof until 5:00 Pacific Time on
___________, 2000 (the "Exercise Period").
2. EXERCISE PRICE. The initial exercise price of each whole Warrant shall
be $2.66 (the "Exercise Price"). The Exercise Price shall be subject to
adjustment as provided in Section 10.
3. EXERCISE OF WARRANTS. The Warrants are exercisable on the terms
provided herein at any time during the Exercise Period by the surrender of this
certificate to the Company at its principal office together with the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder,
accompanied by payment in full, in immediately available funds, of the amount of
the aggregate Exercise Price of the Warrant Shares being purchased upon such
exercise. The Holder shall be deemed the record owner of such Warrant Shares as
of and from
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the close of business on the date on which this certificate is surrendered
together with the completed Notice of Exercise and payment in full as required
above (the "Exercise Date"). The Company agrees that the Warrant Shares so
purchased shall be issued as soon as practicable thereafter. It shall be a
condition to the exercise of the Warrants that the Holder or any transferee
hereof certify to the Company, at the time of exercise, either that the Holder
is not a U.S. person (as defined in Regulation S under the Securities Act) and
that the Warrants are not being exercised on behalf of a U.S. person, or to
provide an opinion of counsel reasonably satisfactory to the Company that the
Warrants and the Warrant Shares to be delivered upon exercise thereof have been
registered under the Securities Act or that an exemption from the registration
requirements of the Securities Act is available. It shall be a further condition
to the exercise of the Warrants that the Warrants may not be exercised in the
United States and the Warrant Shares may not be delivered in the United States
absent registration under the Securities Act or an available exemption from
registration, unless otherwise permitted by Regulation S.
4. FRACTIONAL INTEREST. In lieu of issuing fractional shares of Common
Stock upon exercise of the Warrants, the Company may pay the Holder a cash
amount determined by multiplying the fraction of a share otherwise issuable by
the Fair Market Value of one share of Common Stock. For this purpose, "Fair
Market Value" means the average closing sale price for the ten trading days
immediately preceding the Exercise Date or, if there is no last-sale reporting
for the Common Stock at such time, then the value as determined in good faith by
the Board of Directors of the Company.
5. WARRANTS CONFER NO RIGHTS OF STOCKHOLDER. The Holder shall not have any
rights as a stockholder of the Company with regard to the Warrant Shares prior
to the Exercise Date for any actual purchase of Warrant Shares.
6. INVESTMENT REPRESENTATION. Neither the Warrants nor the Warrants Shares
issuable upon the exercise of the Warrants have been registered under the
Securities Act or any state securities laws. The Holder acknowledges by
acceptance of this certificate that, as of the date of this Warrant and at the
time of exercise, (a) the Holder has acquired the Warrants or the Warrant
Shares, as the case may be, for investment and not with a view to distribution;
and either (b) the Holder has a pre-existing personal or business relationship
with the Company or its executive officers, or by reason of the Holder's
business or financial experience the Holder has the capacity to protect the
Holder's own interests in connection with the transaction; and (c) the Holder is
an accredited investor as that term is defined in Rule 501(a) of Regulation D
under the Securities Act. The Holder agrees, by acceptance of this certificate,
that any Warrant Shares purchased upon exercise of the Warrants may have to be
held indefinitely, until registered and qualified for resale pursuant to Section
7, or until an exemption from registration is available, as evidenced by an
opinion of counsel reasonably satisfactory to the Company. The Holder, by
acceptance of this certificate, consents to the placement of a restrictive
legend (the "Legend") on the certificates representing any Warrant Shares that
are purchased upon exercise of the Warrants during the applicable restricted
period under Regulation S or any other applicable restricted period under the
Securities Act. The Legend shall be in substantially the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES LAWS ("STATE LAWS") OR
ANY SECURITIES LAWS OF JURISDICTIONS OUTSIDE OF THE UNITED STATES, AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED
STATES OR TO A "U.S. PERSON," AS THAT TERM IS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER THE SECURITIES ACT COVERING THE SECURITIES, OR (2)
UPON DELIVERY TO THE COMPANY OF AN OPINION OF U.S. COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT
REGISTRATION PURSUANT TO (A) RULE 144, RULE 144A, OR RULE 904 OF
REGULATION S PROMULGATED UNDER THE SECURITIES ACT OR (B) ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE SECURITIES ACT.
7. REGISTRATION RIGHTS. The Warrant Shares which are purchasable upon
exercise of the Warrants are entitled to the registration rights which are set
forth in Section 9 of the Agency Agreement.
8. RESERVATION OF SHARES. The Company agrees that, at all times during the
Exercise Period, the Company will have authorized and reserved, for the
exclusive purpose of issuance and delivery upon exercise of the Warrants, a
sufficient number of shares of its Common Stock to provide for the issuance of
the Warrant Shares.
9. ADJUSTMENT FOR CHANGES IN CAPITAL STOCK. If the Company at any time
during the Exercise Period shall, by subdivision, combination or
reclassification of securities, change any of the securities into which the
Warrants are exercisable into the same or a different number of securities of
any class or classes, the Warrants shall thereafter entitle the Holder to
acquire such number and kind of securities as would have been issuable as a
result of such change with respect to the Warrant Shares if the Warrant Shares
had been outstanding immediately prior to such subdivision, combination, or
reclassification. If shares of the Company's Common Stock are subdivided into a
greater number of shares of Common Stock, the Exercise Price for the Warrant
Shares upon exercise of the Warrants shall be proportionately reduced and the
number of Warrant Shares shall be proportionately increased; and conversely, if
shares of the Company's Common Stock are combined into a smaller number of
shares of Common Stock, the Exercise Price shall be proportionately increased,
and the number of Warrant Shares shall be proportionately decreased.
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10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF CERTIFICATE. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any certificate representing the Warrants or the
Warrant Shares (referred to herein as the "original certificate"), and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to the Company, and upon reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the original
certificate if mutilated, the Company will make and deliver a new certificate of
like tenor in lieu of the original certificate.
11. ASSIGNMENT. The Warrants may not be transferred, sold, pledged,
hypothecated or encumbered except under the laws of descent and distribution or
by operation of law. The Warrants may not be exercised by or on behalf of any
U.S. person, the Warrants and Warrant Shares may not be offered or sold to any
U.S. person, the Warrants may not be exercised in the United States (except as
permitted by Regulation S), and the Warrant Shares may not be delivered in the
United States, unless, in each case, the Warrants and Warrant Shares have been
registered under the Securities Act or an exemption from such registration is
available, as evidenced by an opinion of counsel reasonably satisfactory to the
Company.
12. GENERAL. This certificate shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
between California residents entered into and to be performed entirely within
the State of California. The headings herein are for purposes of convenience and
reference only and shall not be used to construe or interpret the terms of this
certificate. The terms of this certificate may be amended, waived, discharged or
terminated only by a written instrument signed by both the Company and the
Holder. All notices and other communications from the Company to the Holder
shall be mailed by first-class registered or certified mail, postage pre-paid,
to the address furnished to the Company in writing by the last Holder who shall
have furnished an address to the Company in writing.
Dated: April , 1997
MICROTEL INTERNATIONAL, INC.
By: /s/ Carmine T. Oliva
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(Authorized Signature)
President and CEO
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(Name and Title)
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NOTICE OF EXERCISE
To: MicroTel International, Inc. (the "Company")
1. The undersigned hereby elects to exercise a total of ___________
Warrants for the purchase of a like number of Warrant Shares, and tenders
herewith payment of the Exercise Price for such shares in full.
2. In exercising the Warrants, the undersigned hereby confirms and
acknowledges that the Warrant Shares are being acquired solely for the account
of the undersigned for investment, and that the undersigned will not offer, sell
or otherwise dispose of any of the Warrant Shares unless the Warrant Shares have
been registered under the Securities Act or an exemption from such registration
is available, as evidenced by an opinion of counsel reasonably satisfactory to
the Company.
3. The undersigned hereby certifies that either (i) the undersigned is not
a U.S. person (as such term is defined in Regulation S under the Securities
Act), or (ii) the undersigned has delivered to the Company an opinion of counsel
to the effect that the Warrants and the Warrant Shares have been registered
under the Securities Act or an exemption from such registration is available.
4. The undersigned further certifies that the Warrants are not being
exercised in the United States and understands and agrees that the Warrant
Shares may not be delivered in the United States, except as permitted by
Regulation S, absent registration under the Securities Act or an available
exemption from such registration.
5. Please issue a certificate representing the Warrant Shares in the name
of the Holder and deliver the certificate to the address set forth below.
6. Please issue a new certificate representing the unexercised portion (if
any) of the Warrants in the name of the Holder and deliver the certificate to
the address set forth below.
Dated: _____________________ ____________________________________________
(Name of Holder)
____________________________________________
(Authorized Signature)
Address for Delivery:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
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