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 OFFERED OR SOLD 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 BE TRANSFERRED, SOLD, PLEDGED,
HYPOTHECATED AND ENCUMBERED NOT EXCEPT PURSUANT TO THE PROVISIONS CONTAINED
HEREIN.
WARRANTS TO PURCHASE COMMON STOCK
MICROTEL INTERNATIONAL, INC., a Delaware corporation (the "Company") hereby
grants to __________________________ (the "Holder") _________________________
(___________) 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.
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 May 22,
2001 (the "Exercise Period").
2. EXERCISE PRICE. The initial exercise price of each whole Warrant
shall be $1.25 per share (the "Exercise Price"). The Exercise Price shall be
subject to adjustment as provided in Section 9.
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 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 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.
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
signing this certificate that, as of the date of this Warrant and at the time
of exercise that: (a) the Holder has acquired the Warrant or the Warrant
Shares, as the case may be, for the Holder's own account; (b) 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 (c) either 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. 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 Rule 144 or any other applicable
restricted period under the Securities Act. The Legend shall be in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, UNLESS IN THE WRITTEN LEGAL OPINION (APPROVED BY THE COMPANY)
OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS NOT
REQUIRED.
7. REGISTRATION RIGHTS. The shares of Common Stock underlying the
Warrants shall be accorded the same registration rights as the Conversion
Shares issuable pursuant to the Subscription Agreement for Series A
Convertible Preferred Stock executed by the Company and the Holder dated of
even date herewith.
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.
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 be transferred subject to the
provisions of Section 6.
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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on May
__ , 1998.
MICROTEL INTERNATIONAL, INC.
Dated:_____________ By:__________________________________
(Authorized Signature)
___________________________________
(Name and Title)
HOLDER
Dated:_____________ By:__________________________________
(Authorized Signature)
_________________________________
(Name and Title)
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: (a) the Warrant Shares are being acquired solely for the
account of the undersigned for investment and not with a view to or for sale
in connection with any distribution; (b) the undersigned has a pre-existing
personal or business relationship with the Company or its executive officers,
or by reason of the undersigned's business or financial experience the
undersigned has the capacity to protect the undersigned's own interests in
connection with the exercise of the Warrants; and (c) 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 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. Please issue a certificate representing the Warrant Shares in the
name of the Holder and deliver the certificate to the address set forth below.
5. 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)
_________________________________
(Authorized Signature)
Address for Delivery:
_________________________________
_________________________________
_________________________________
_________________________________