Attached files
| file | filename |
|---|---|
| 10-Q - Geos Communications, Inc. | v194001_10q.htm |
| EX-31.1 - Geos Communications, Inc. | v194001_ex31-1.htm |
| EX-31.2 - Geos Communications, Inc. | v194001_ex31-2.htm |
| EX-32.2 - Geos Communications, Inc. | v194001_ex32-2.htm |
| EX-3.16 - Geos Communications, Inc. | v194001_ex3-16.htm |
| EX-32.1 - Geos Communications, Inc. | v194001_ex32-1.htm |
GEOS
COMMUNICATIONS, INC.
DRAWDOWN
PROMISSORY NOTE
| Up to $2,600,000 |
May 21,
2010
|
This
Amended and Restated Drawdown Promissory Note amends and restates in its
entirety that certain Drawdown Promissory Note dated February 23, 2010 made by
Maker to Payee.
1. Drawdowns. The
principal of this Note may be drawndown from time to time prior to the Maturity
Date (as defined below), upon written request from Maker to Payee (each, a
“Drawdown Request”),
which Drawdown Request must state the amount to be drawndown, which amount must
be in increments of $100,000 and must be at least $300,000. Payee
shall fund each Drawdown Request within five (5) Business Days (as defined
below) after receipt of a Drawdown Request; provided, however, that the maximum
amount of drawdowns under this Note is $2,600,000. Upon Payee funding
a Drawdown Request, Maker and Payee will amend Schedule I to this
Agreement to reflect such drawdown. For each $100,000 of Drawdowns
funded by Payee, Maker will issue to Payee, for no additional consideration, a
Warrant to purchase 10,000 shares of common stock of Maker, which Warrants will
be substantially in the form attached hereto as Exhibit
A.
2. Principal and Interest
Payments. The principal of this Note, together with all
accrued but unpaid interest hereon, shall be due and payable on the earlier of:
(i) the closing on at least $5,000,000 of subscriptions for shares of Series I
Preferred Stock of Maker (the “Series I Preferred Stock”) in
the Offering (as defined below); or (ii) August 23, 2010 (the “Maturity Date”).
3. Prepayments. Maker
may at its sole option prepay all or any part of the principal of this Note, or
interest thereon, before maturity without penalty or premium. All
such prepayments shall first be applied to accrued interest under this Note, and
the remaining balance of any such prepayments, if any, shall be applied to
principal of this Note.
4. Method of
Payment. All payments made under this Note, whether of
principal or interest, shall be made by Maker to Payee on the date specified or
provided herein and shall be delivered by means of certified or cashiers’ check
or wire transfer of immediately available funds to an account specified by the
holder hereof. Whenever payment hereunder shall be due on a day which
is not a Business Day, the date for payment thereof shall be extended to the
next succeeding Business Day. If the date for any payment is extended
by operation of law or otherwise, interest thereon shall be payable for such
extended time. “Business Day” means every day
which is not a Saturday, Sunday or legal holiday.
1
5. Conversion. The
Company is in the process of commencing a private placement of up to $12,000,000
of equity in the form of Series I Preferred Stock and warrants (the “Offering”). The
Company intends to close the Offering in one or more tranches. The
Company shall give Payee written notice of the final closing of the
Offering. Payee shall have sixty (60) days thereafter to give notice
to the Company of Payee’s conversion of all or any portion of the principal
balance of, and/or accrued but unpaid interest on, this Note into the securities
offered in the Offering, at a conversion price equal to the purchase price paid
for the Series I Preferred Stock and warrants in the Offering. To
exercise the conversion rights set forth in Section 5, Payee shall deliver a
written conversion request to the Company stating the dollar amount of principal
and interest to be converted. In the event that all of the principal
of, and accrued but unpaid interest on, this Note is being converted, Payee
shall also deliver this Note to the Company, which will be marked
“canceled”. In the event that less than all of the principal of, and
accrued but unpaid interest on, this Note is being converted, then Maker and
Payee will amend Schedule 1 hereto to
reflect the portion of this Note which was converted.
6. Events of
Default. The following shall constitute events of default
(“Events of Default”)
hereunder:
(a) failure
of Maker to make any payment on this Note as and when the same becomes due and
payable in accordance with the terms hereof, if the same has continued for five
(5) days after written notice specifying such default has been delivered to
Maker by Payee;
(b) failure
of Maker to perform any other covenant contained herein, if the same has
continued for thirty (30) days after written notice specifying such default has
been delivered to Maker by Payee;
(c) if
Maker makes an assignment for the benefit of creditors, or petitions or applies
for the appointment of a liquidator, receiver or custodian (or similar official)
of it or of any substantial part of its assets, or if Maker commences any
proceeding or case relating to it under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, or takes any action to authorize any of the
foregoing; or
(d) if
any petition or application of the type described in subparagraph (c)
immediately above is filed or if any such proceeding or case described in
subparagraph (c) is commenced against Maker and is not dismissed within sixty
(60) days, or if Maker indicates its approval thereof, consents thereto or
acquiesces therein, or if an order is entered appointing any such liquidator or
receiver or custodian (or similar official), or adjudicating Maker bankrupt or
insolvent, or approving a petition in any such proceeding, or if a decree or
order for relief is entered in respect of Maker in an involuntary case under the
Bankruptcy Code or any other bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction.
2
In the
event any one or more of the Events of Default specified above occurs and is
continuing, the holder of this Note may (i) accelerate the maturity of this Note
with notice to Maker at which time all such amounts shall be immediately due and
payable, (ii) proceed to protect and enforce its rights either by suit in equity
or by action at law, or by other appropriate proceedings, whether for the
specific performance of any covenant or agreement contained in this Note or in
aid of the exercise of any power or right granted by this Note, or (iii) enforce
any other legal or equitable right of the holder of this Note.
7. Delay or Omission Not
Waiver. No delay or omission on the part of the holder of this
Note in the exercise of any power, remedy or right under this Note, or under any
other instrument executed pursuant hereto, shall operate as a waiver thereof,
nor shall a single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other right or power
hereunder.
8. Waiver. Any
term, covenant, agreement or condition of this Note may, with the written
consent of Payee, be amended or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), altered, modified or amended.
9. Attorneys’ Fees and
Costs. In the event an Event of Default shall occur, and in
the event that thereafter this Note is placed in the hands of an attorney for
collection, or in the event this Note is collected in whole or in part through
legal proceedings of any nature, then and in any such case Maker promises to pay
all costs of collection, including, but not limited to, reasonable attorneys’
fees and court costs incurred by the holder hereof on account of such
collection, whether or not suit is filed.
10. Successors and
Assigns. All of the covenants, stipulations, promises and
agreements in this Note made by Maker and Payee (by virtue of its acceptance of
this Note) shall bind its successors and assigns, whether so expressed or
not.
11. Maximum Lawful
Rate. Any provision in this Note or in any other document
executed in connection herewith, or in any other agreement or commitment,
whether written or oral, express or implied, to the contrary notwithstanding,
Payee shall not in any event be entitled to receive or collect, nor shall or may
amounts received hereunder be credited, so that Payee shall be paid, as
interest, a sum greater than the maximum rate of interest permitted by
applicable law. If any construction of this Note, or any and all
other papers, agreements or commitments, indicates a different right given to
Payee to ask for, demand or receive any larger sum as interest, such is a
mistake in calculation or wording, which this clause shall override and control;
it being the intention of the parties that this Note and all other instruments
relating to this Note shall in all things comply with applicable law, and proper
adjustment shall automatically be made accordingly. In the event
Payee ever receives, collects or applies as interest, any sum in excess of the
maximum rate of interest permitted by applicable law, such excess amount shall
be applied to the reduction of the unpaid principal balance of this Note in the
inverse order of maturity, and if this Note is paid in full, any remaining
excess shall be paid to Maker. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the maximum
rate of interest permitted by applicable law, Maker and Payee shall, the maximum
extent permitted under applicable law (i) characterize any nonprincipal payment
as an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) “spread” the total amount of
interest throughout the entire term of this Note so that the interest rate is
uniform throughout the entire term hereof.
3
12. Governing
Law. This Note shall be governed by and construed in
accordance with the substantive laws (but not the rules governing conflicts of
laws) of the State of Texas.
13. Notice. Any
notice or demand given hereunder by the holder hereof shall be deemed to have
been given and received (i) when actually received by Maker, if delivered in
person or by facsimile transmission, or (ii) if mailed, on the earlier of the
date actually received or (whether ever received or not) three Business Days (as
hereinafter defined) after a letter containing such notice, certified or
registered, with postage prepaid, addressed to Maker, is deposited in the United
States mail. The address of Maker is 430 N. Carroll Ave, Suite 120,
Southlake, Texas 76092, Attn: Chief Executive Officer, or such other address as
Maker shall advise the holder hereof by certified or registered letter by this
same procedure.
14. Severability. In
case any one or more of the provisions contained in this Note shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.
EXECUTED as of the date set
forth above.
| GEOS COMMUNICATIONS, INC. | |||
|
|
By:
|
/s/ Christopher R. Miltenberger | |
|
Christopher
R. Miltenberger, President
|
|||
4
SCHEDULE
I
Schedule of
Drawdowns
|
Date of Drawdown
|
Amount of Drawdown
|
|
February
23, 2010
|
$600,000
|
|
March
17, 2010
|
$700,000
|
|
April
19, 2010
|
$700,000
|
|
May
21, 2010
|
$600,000
|
5
EXHIBIT
A
Form of Warrant
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION
OF COUNSEL TO THE TRANSFEROR REASONABLY ACCEPTABLE TO THE COMPANY TO SUCH
EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
WARRANT
To
Purchase __________ Shares of Common Stock of
GEOS
COMMUNICATIONS, INC.
THIS WARRANT (the “Warrant”) certifies that, for
value received, ______________ (the “Holder”), is entitled, upon
the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and on
or prior to the three-year anniversary of the Initial Exercise Date (the “Termination Date”), but not
thereafter, to subscribe for and purchase from Geos Communications, Inc., a
Washington corporation (the “Company”), up to _________
shares (the “Warrant
Shares”) of common stock, no par value per share, of the Company (the
“Common
Stock”). The purchase price of each Warrant Share (the “Exercise Price”) under this
Warrant shall be $0.20, subject to adjustment
hereunder.
15. Title to
Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form attached hereto
as Exhibit A
(the “Assignment Form”),
properly endorsed.
16. Authorization of
Shares. The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such
issue).
6
17. Exercise of
Warrant.
(a) Exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Initial Exercise Date and on or before the Termination
Date by delivery to the Company (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the address
of such Holder appearing on the books of the Company) of a duly executed
facsimile copy of the Notice of Exercise in the form attached hereto as Exhibit B (the “Notice of Exercise”); provided, however, within three
(3) Business Days of the date said Notice of Exercise is delivered to the
Company, the Holder shall have surrendered this Warrant to the Company, and, if
the Holder has not elected to make a cashless exercise as provided below, the
Company shall have received payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank. Certificates for Warrant Shares purchased hereunder
shall be delivered to the Holder no later than three (3) Business Days after the
delivery to the Company of the Notice of Exercise, surrender of this Warrant
and, if the Holder has not elected to make a cashless exercise as provided
below, payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery
Date”). Prior to the issuance of such Warrant Shares, if the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(a) by the Warrant
Share Delivery Date, then the Holder will have the right to rescind such
exercise. Nothing herein shall limit a Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates
representing Warrant Shares as required pursuant to the terms hereof. “Business Day” shall mean any
day other than: (i) Saturday or Sunday or (ii) a legal holiday on which banks in
the State of Texas are authorized to be closed for business.
(b) If
this Warrant shall have been exercised in part, then the Company shall, at the
time of delivery of the certificate or certificates representing the Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
(c) In
the event that the Holder elects to make a cashless exercise as provided above,
the Company shall issue to the Holder the number of Warrant Shares equal to the
result obtained by (i) subtracting B from A, (ii) multiplying the
difference by C, and (iii) dividing the product by A, as set forth in the
following equation:
|
X
|
= (A - B) x
C where:
|
|
| A | ||
|
X
|
= the number of Warrant Shares issuable upon a cashless exercise of the Warrant pursuant to the provisions of this Section 3. |
7
|
A
|
= the
Fair Market Value (as defined below) of one share of Common Stock on the
date of net issuance exercise.
|
|
|
B
|
= the Exercise Price for one Warrant Share under this Warrant. | |
|
C
|
= the number of Warrant Shares as to which this Warrant is exercisable. |
If the
foregoing calculation results in a negative number, then no Warrant Shares shall
be issued upon a cashless exercise.
For the
purpose of such calculations, the fair market value per share of the Common
Stock shall be (i) if there is a public market for the Common Stock, the dollar
volume-weighted average price for the Common Stock on the Over-The-Counter
Bulletin Board, AMEX, NYSE, the NASDAQ National Market or The NASDAQ SmallCap
Market Principal Market during the period beginning at 9:30:01 a.m., New York
City Time, and ending at 4:00:00 p.m., New York City Time, as reported by
Bloomberg through its “Volume at Price” function or, if the foregoing does not
apply, the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security
during the period beginning at 9:30:01 a.m., New York City Time, and ending at
4:00:00 p.m., New York City Time, as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.) for
the twenty (20) trading days prior to the date of determination of fair market
value; or (ii) if there is no public market for the Common Stock, as determined
by the Company’s Board of Directors in good faith.
18. No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall round such fraction of a share up to the
nearest whole share.
19. Charges, Taxes and
Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form duly executed by the Holder, and the Company
may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.
20. Closing of
Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
21. Transfer, Division and
Combination.
8
(a) Subject
to compliance with any applicable securities laws and with the provisions of
Sections 1, 4 and 7(e) hereof, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with an Assignment Form completed and
duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making of such transfer. Upon
such surrender and, if required, such payment, the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or assignees and
in the denomination or denominations specified in the Assignment Form, and shall
issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. A Warrant,
if properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b) This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance
with Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
(c) The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.
(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
(e) If,
at the time of the surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be registered pursuant to
an effective registration statement under the 1933 Act and under applicable
state securities or blue sky laws, the Company may require, as a condition of
allowing such transfer: (i) that the Holder or assignee of this
Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made
without registration under the 1933 Act and under applicable state securities or
blue sky laws; (ii) that the Holder or assignee execute and deliver to the
Company an investment representation letter in form and substance reasonably
satisfactory to the Company; and (iii) that the assignee be an “accredited
investor” as defined in Rule 501(a) promulgated under the 1933 Act or a
qualified institutional buyer as defined in Rule 144A(a) under the 1933
Act.
22. Representations of
Holder
(a) Acquisition of Warrant for
Personal Account. The Holder represents and warrants that it is acquiring
the Warrant and Warrant Shares solely for its account for investment and not
with a present view toward public sale or distribution of said Warrant or
Warrant Shares or any part thereof and has no intention of selling or
distributing said Warrant Shares or any arrangement or understanding with any
other person or entity regarding the sale or distribution of said
Warrant except as would not result in a violation of the 1933 Act.
9
(b) Securities Are Not
Registered.
(i) The
Holder understands that the offer and sale of the Warrant and the Warrant Shares
have not been exercised under the 1933 Act on the basis of specific exemptions
from the registration provisions of the 1933 Act, which exemptions depend upon,
among other things, the bona fide nature of the Holder’s investment intent as
expressed herein. The Holder realizes that the basis for such exemptions may not
be present if, notwithstanding its representations, the Holder has a present
intention of acquiring the securities for a fixed or determinable period in the
future, selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the securities. The Holder has no
such present intention.
(ii) The
Holder recognizes that the Warrant and the Warrant Shares must be held
indefinitely unless they are subsequently registered under the 1933 Act or an
exemption from such registration is available. The Holder recognizes that the
Company has no obligation to register the Warrant or the Warrant Shares, or to
comply with any exemption from such registration.
(c) The
Holder understands and agrees that all certificates evidencing the Warrant
Shares to be issued to the Holder may bear a legend in substantially the
following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OF
THE UNITED STATES IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR REGULATION S THEREUNDER,
AND ACCORDINGLY, MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXPEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAW AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
23. No Rights as Shareholder
until Exercise. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof. Upon the surrender of this Warrant, the delivery of
the Notice of Exercise by facsimile copy, and the payment of the aggregate
Exercise Price and the payment of all taxes required to be paid by the Holder
prior to the issuance of the Warrant Shares pursuant to Section 3, if any,
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender, delivery or payment.
10
24. Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.
25. Saturdays, Sundays,
Holidays, Etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.
26. Adjustments to Exercise
Price and Number of Warrant Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time if the Company
shall: (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock; (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares; (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock; or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock. Upon the
happening of any of the events set forth in subsections (i)-(iv) of this
Section 12, the number of Warrant Shares purchasable upon exercise of this
Warrant immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive the kind and number of Warrant Shares or other securities of
the Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment
of the kind and number of Warrant Shares or other securities of the Company
which are purchasable hereunder, the Holder shall thereafter be entitled to
purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company that are purchasable pursuant hereto immediately after such
adjustment. An adjustment made pursuant to this paragraph shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event.
27. Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock), or sell,
transfer or otherwise dispose of its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or other
securities or property of any nature whatsoever (excluding cash but including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation (“Other Property”), are to be
received by or distributed to the holders of Common Stock, then the Holder shall
have the right thereafter to receive the number of shares of stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
equal to the number of Warrant Shares for which this Warrant is exercisable
immediately prior to such event. For purposes of this
Section 13, “common stock of the successor or acquiring corporation” shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing
provisions of this Section 13 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
11
28. Voluntary Adjustment by the
Company. The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the Board of Directors of the
Company.
29. Notice of
Adjustment. Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
30. Notice of Corporate
Action. If at any time:
(a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or
(b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,
(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;
then, in
any one or more of such cases, the Company shall give to Holder: (i) at least 20
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 20 days’
prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify: (A) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (B) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed
to Holder at the last address of Holder appearing on the books of the Company
and delivered in accordance with Section 18(d).
12
31. Authorized
Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Shares a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this
Warrant 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 the Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation.
Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending the Company’s Articles of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will: (i) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.
32. Miscellaneous.
13
(a) This
Warrant shall be governed by and construed in accordance with the laws of the
State of Washington without regard to principles of conflict of
laws.
(b) The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.
(c) No
course of dealing or any delay or failure to exercise any right hereunder on the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due pursuant hereto or
in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed to have been made when delivered or mailed by first
class mail, postage prepaid, as follows: (a) if to the Holder,
at the address of the Holder as shown on the registry books maintained by the
Company or the Transfer Agent; and (b) if to the Company, at 430 N. Carroll
Avenue, Suite 120, Southlake, Texas 76092, Attention: Chief Executive
Officer.
(e) No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
or privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Shares or as a shareholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.
(f) Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate.
(g) Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
(i) Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.
14
(j) The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.
Dated: ________________,
2010
|
GEOS
COMMUNICATIONS, INC.
|
|||
|
|
By:
|
/s/ | |
| Andrew L. Berman | |||
|
Chief
Executive Officer
|
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15
EXHIBIT
A
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute this form
and
supply required information.
Do not
use this form to exercise the warrant.)
FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to ______________________________ whose address is
_______________________________________________________________.
Dated: ______________,
_______
|
Holder’s
Signature:
|
|||
|
Holder’s
Address:
|
|||
Signature
Guaranteed: ___________________________________________________
NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.
A-1
EXHIBIT
B
NOTICE OF
EXERCISE
To: Geos
Communications, Inc.
The
undersigned, the Holder of the attached Warrant, hereby irrevocably elects to
exercise the purchase right represented by the Warrant for, and to purchase
thereunder, _______ Warrant Shares (as such terms are defined in the Warrant,
dated ____________, 2010, issued by Geos Communications, Inc. to
_________________).
|
|
|
(Cash
Exercise) The undersigned has included with this Form of
Subscription the purchase price of such shares in
full.
|
|
|
|
(Cashless
Exercise) The undersigned elects to purchase such shares
pursuant to the net exercise provisions of such
Warrant.
|
The
undersigned hereby requests that the Certificate(s) for such securities be
issued in the name(s) and delivered to the address(es) as follows:
|
Name:
|
|||||
|
Address:
|
|||||
|
Social
Security Number:
|
|||||
|
Deliver
to:
|
|||||
|
Address:
|
If the
foregoing Subscription evidences an exercise of the Warrant to purchase fewer
than all of the Warrant Shares (or other securities or property) to which the
undersigned is entitled under such Warrant, please issue a new Warrant, of like
tenor, for the remaining portion of the Warrant (or other securities or
property) in the name(s), and deliver the same to the address(es) as
follows:
|
Name:
|
|||||
|
Address:
|
|||||
| Dated: | , 20 |
|
(Name
of Holder)
|
|||||
|
(Signature
of Holder or Authorized Signatory)
|
(SS or TIN of Holder) | ||||
| Signature Guaranteed: |
B-1