Exhibit 10.6

 

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE,
SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION
IS NOT REQUIRED.

 

WARRANT TO PURCHASE COMMON STOCK
OF
AMERICAN VIRTUAL CLOUD TECHNOLOGIES, INC.

 

No. A-__ ______ Shares of Common Stock

  

This is to Certify That, FOR VALUE RECEIVED, ______________________, or its
assigns (“Holder”), is entitled to purchase, subject to the provisions of this
Warrant, from American Virtual Cloud Technologies, Inc., a Delaware corporation
(the “Company”), _______ shares of fully paid, validly issued and nonassessable
shares of the common stock of the Company (“Common Stock”) at an exercise price
of $0.01 per share. The number of shares of Common Stock to be received upon the
exercise of this Warrant and the price to be paid for each share of Common Stock
may be adjusted from time to time as hereinafter set forth. The shares of Common
Stock deliverable upon such exercise, and as adjusted from time to time pursuant
to Section (g) hereof or as otherwise provided herein, are hereinafter sometimes
referred to as “Warrant Shares” and the exercise price per share of Common Stock
acquirable upon exercise hereof as in effect at any time and as adjusted from
time to time is hereinafter sometimes referred to as the “Exercise Price.”

 

This Warrant to Purchase Common Stock (this “Warrant”) is being issued pursuant
to that certain Securities Purchase Agreement dated April 3, 2020 to which the
Company and the Holder are parties (the “Purchase Agreement”). Capitalized terms
used but not defined herein shall have the meanings given to them in the
Purchase Agreement.

 

 

 

 

(a) EXERCISE OF WARRANT.

 

(1) This Warrant may be exercised in whole or in part at any time or from time
to time from the date hereof up to and including April 7, 2025 (the “Exercise
Period”); provided, however, that (A) if either such day is a day on which
banking institutions in the State of Georgia are authorized by law to close,
then on the next succeeding day which shall not be such a day, and (B) in the
event of any merger, consolidation or sale of all or substantially all the
assets of the Company as an entirety, resulting in any distribution to the
Company’s stockholders, prior to termination of the Exercise Period, or any
reclassification or recapitalization or similar transaction (each of the
foregoing, a “Major Transaction”), the Holder shall have the right to exercise
this Warrant commencing at such time through the termination of the Exercise
Period into the kind and amount of shares of stock and other securities and
property (including cash) receivable had the Holder exercised this Warrant
immediately prior to such Major Transaction or any record date established to
determine the receipt of any payment or distribution in respect thereof. This
Warrant may be exercised by presentation and surrender hereof to the Company at
its principal office with the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price for the number of Warrant Shares
specified in such form. As soon as practicable after each such exercise of this
Warrant, but not later than three (3) business days following the receipt of
good and available funds, 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 rights of the
Holder thereof to purchase the balance of the Warrant Shares purchasable
hereunder. As of the end of business on the date of receipt by the Company of
this Warrant at its office in proper form for exercise, the Holder shall be
deemed to be the holder of record of the shares of Common Stock or other
property issuable upon such exercise, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such
shares or other property shall not then be physically delivered to the Holder.

 

(2) At any time during the Exercise Period, the Holder may, at its option,
exercise this Warrant on a cashless basis by exchanging this Warrant, in whole
or in part (a “Warrant Exchange”), into the number of Warrant Shares determined
in accordance with this Section (a)(2), by surrendering this Warrant at the
principal office of the Company or at the office of its stock transfer agent,
accompanied by a notice stating such Holder’s intent to effect such exchange,
the number of Warrant Shares to be exchanged and the date on which the Holder
requests that such Warrant Exchange occur (the “Notice of Exchange”). The
Warrant Exchange shall take place on the date specified in the Notice of
Exchange or, if later, the date the Notice of Exchange is received by the
Company (the “Exchange Date”). Certificates for the shares issuable upon such
Warrant Exchange and, if this Warrant should be exercised in part only, a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable hereunder, shall be issued as of the Exchange
Date and delivered to the Holder within seven (7) days following the Exchange
Date. In connection with any Warrant Exchange, this Warrant shall represent the
right to subscribe for and acquire the number of Warrant Shares equal to (i) the
number of Warrant Shares specified by the Holder in its Notice of Exchange (the
“Total Number”) less (ii) the number of Warrant Shares equal to the quotient
obtained by dividing (A) the product of the Total Number and the existing
Exercise Price by (B) Fair Market Value of a share of Common Stock. “Fair Market
Value” shall equal the average closing trading price of the Common Stock as
reported on the relevant market or exchange (or, if not then traded on a market
or exchange but listed for quotation on the over-the-counter bulletin board, on
the over-the-counter bulletin board) for the five (5) trading days immediately
preceding the date of the Notice of Exchange or, if the Common Stock is not
listed or admitted to trading on any market or exchange or listed for quotation
on the over-the-counter bulletin board, and the average price cannot be
determined as contemplated above, the Fair Market Value of the Common Stock
shall be as reasonably determined in good faith by the Company’s Board of
Directors with the concurrence of the Holder.

 

-2- 

 

 

(b) REPRESENTATIONS OF HOLDER. The Holder (i) is an “accredited investor,” as
defined in Rule 501 promulgated under the Securities Act of 1933, as amended
(the “1933 Act”), (ii) understands the risks of, and other considerations
relating to, a purchase of this Warrant, (iii) understands that the Warrants
and/or the Warrant Shares may not be sold, transferred, hypothecated or pledged,
except pursuant to an effective registration statement under the 1933 Act and
under any applicable state securities law, or pursuant to an available exemption
from the registration requirements of the 1933 Act and any applicable state
securities laws, in all cases established to the satisfaction of the Company,
and (v) the Holder has been given the opportunity to obtain such additional
information that it believes is necessary.

 

(c) RESERVATION OF SHARES. The Company shall at all times reserve for issuance
and/or delivery upon exercise of the this Warrant such number of shares of
Common Stock as shall be required for issuance and delivery upon exercise of
this Warrant.

 

(d) LIMITATIONS ON NUMBER OF SHARES ISSUABLE. Notwithstanding anything herein to
the contrary herein, the aggregate number of shares of Common Stock issued upon
conversion of the Warrants, together with the aggregate number of shares of
Common Stock issued upon exercise of the Indentures, shall not exceed 19.9% of
either (i) the total number of shares of Common Stock outstanding on the date
hereof or (ii) the total voting power of the Company’s securities outstanding on
the date hereof that are entitled to vote on a matter being voted on by holders
of the Common Stock, unless and until the Company has obtained the Stockholder
Approval.

 

(e) FRACTIONAL SHARES. No fractional shares or strips representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon any exercise hereof, the Company shall pay
to the Holder an amount in cash equal to such fraction multiplied by the Fair
Market Value of a share of Common Stock.

 

(f) LOSS OR DESTRUCTION OF WARRANT. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.

 

-3- 

 

 

(g) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to
any rights of a shareholder in the Company, either at law or equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.

 

(h) ANTI-DILUTION PROVISIONS. In case the Company shall hereafter (i) declare a
dividend or make a distribution on its outstanding Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding Common Stock into a
greater number of shares, or (iii) combine or reclassify its outstanding Common
Stock into a smaller number of shares, the Exercise Price in effect at the time
of the record date for such dividend or distribution or of the effective date of
such subdivision, combination or reclassification shall be adjusted so that it
shall equal the price determined by multiplying the Exercise Price by a
fraction, the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such action, and the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
action. The number of shares of Common Stock that the Holder shall thereafter,
on the exercise hereof, be entitled to receive shall be adjusted to a number
determined by multiplying the number of shares of Common Stock that would
otherwise (but for the provisions of this Section (h)) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise Price that
would otherwise (but for the provisions of this Section (h)) be in effect, and
(ii) the denominator is the Exercise Price in effect on the date of such
exercise (taking into account the provisions of this Section (h)).
Notwithstanding the foregoing, in no event shall the Exercise Price be less than
the par value of the Common Stock. Adjustment pursuant to this Section shall be
made successively whenever any event listed above shall occur.

 

(i) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be outstanding,
(i) if the Company shall pay any dividend or make any distribution upon the
Common Stock or (ii) if the Company shall offer to the holders of Common Stock
for subscription or purchase by them any share of any class or any other rights
or (iii) if any capital reorganization of the Company, reclassification of the
capital stock of the Company, consolidation or merger of the Company with or
into another corporation, sale, lease or transfer of all or substantially all of
the property and assets of the Company to another corporation, or voluntary or
involuntary dissolution, liquidation or winding up of the Company shall be
effected, then in any such case, the Company shall cause to be mailed to the
Holder, at least twenty days prior the earlier of the dates specified in (x) and
(y) below, as the case may be, a notice containing a brief description of the
proposed action and stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.

 

-4- 

 

 

(j) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any reclassification,
capital reorganization or other change of outstanding Common Stock of the
Company, or in case of any consolidation or merger of the Company with or into
another corporation (other than a merger with a subsidiary in which merger the
Company is the continuing corporation or a merger in which the Common Stock of
the Company outstanding immediately prior thereto represents immediately
thereafter (either by remaining outstanding or by being converted into voting
securities of the surviving or acquiring entity) 50% or more of the combined
voting power and economic interests in the Company or such surviving or
acquiring entity outstanding immediately after such transaction and economic
interests in the Company or such surviving or acquiring entity outstanding
immediately after such transaction and which does not result in any
reclassification, capital reorganization or other change of outstanding Common
Stock of the class issuable upon exercise of this Warrant) or in case of any
sale, lease or conveyance to another corporation of the property of the Company
in the entirety (a “Reorganization”), the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
that might have been purchased upon exercise of this Warrant immediately prior
to such Reorganization. Any such provision shall include provision for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Warrant. The foregoing provisions of this
Section (i) shall similarly apply to successive reclassifications, capital
reorganizations and changes of Common Stock and to successive consolidations,
mergers, sales or conveyances. In the event that in connection with any such
capital reorganization or reclassification, consolidation, merger, sale or
conveyance, additional shares of Common Stock shall be issued in exchange,
conversion, substitution or payment, in whole or in part, for a security of the
Company other than Common Stock, any such issue shall be treated as an issue of
Common Stock covered by the provisions of Section (h) hereof.

 

(k) NO NET-CASH SETTLEMENT. Except as expressly provided herein, in no event
will the Holder be entitled to receive a net-cash settlement or other
consideration in lieu of physical settlement in securities.

 

(l) MODIFICATION OF AGREEMENT. The provisions of this Warrant may from time to
time be amended, modified or waived, by the Company and the holder of this
Warrant.

 

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(m) TRANSFER OF WARRANT. This Warrant shall inure to the benefit of the
successors to and assigns of the Holder; provided, however, this Warrant may not
be pledged, sold, assigned or otherwise transferred, directly or indirectly, by
operation of law, change of control, or otherwise, except in compliance with
applicable registration requirements of securities laws or an available
exemption therefrom.. This Warrant and all rights hereunder are registrable at
the office or agency of the Company referred to below by the Holder in person or
by its duly authorized attorney, upon surrender of this Warrant properly
endorsed accompanied by an assignment form in a form approved by the Company,
duly executed by the transferring Holder and the transferee.

 

(n) REGISTER OF WARRANTS. The Company shall maintain, at the principal office of
the Company (or such other office as it may designate by notice to the Holder),
a register in which the Company shall record the name and address of the person
in whose name this Warrant has been issued, as well as the name and address of
each successor and prior owner of such Warrant. The Company shall be entitled to
treat the Person in whose name this Warrant is so registered as the sole and
absolute owner of this Warrant for all purposes.

 

(o) WARRANT AGENT. The Company may, by written notice to the Holder, appoint the
transfer agent and registrar for the Common Stock as the Company’s agent for the
purpose of issuing Common Stock (or other securities) on the exercise of this
Warrant pursuant to paragraph(a), and the Company may, by written notice to the
Holder, appoint an agent having an office in the United States of America for
the purpose of replacing this Warrant pursuant to paragraph (e), or any of the
foregoing, and thereafter any such replacement shall be made at such office by
such agent.

 

(p) NOTICES, ETC. All notices and other communications from the Company to the
Holder shall be mailed by first class certified mail, postage prepaid, at such
address as may have been furnished to the Company in writing by the Holder or at
the address shown for the Holder on the register of Warrants referred to in
paragraph (m).

 

[Signatures appear on the following page.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Warrant on April 7,
2020.

  

  HOLDER:       

 

  By:         Name:       Title:    

 

  COMPANY:       AMERICAN VIRTUAL CLOUD TECHNOLOGIES, INC.

 

  By:     Name:   Darrell J. Mays   Title: Chief Executive Officer

 

 

 

 

PURCHASE FORM / EXCHANGE NOTICE [circle one]

 

(1)The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing shares of Common Stock of American Virtual Cloud
Technologies, Inc. (or such number of shares of Common Stock or other securities
or property to which the undersigned is entitled in lieu thereof or in addition
thereto under the provisions of the Warrant).

 

(2)The undersigned hereby elects to make payment (Please check one):

 

☐on a cashless basis pursuant to the provisions of Section (a)(2) of the
Warrant.

 

☐with the enclosed bank draft, certified check or money order payable to the
Company in payment of the exercise price determined under, and on the terms
specified in, the Warrant.

 

(3)The undersigned hereby irrevocably directs that the said shares be issued and
delivered as follows:

 

 Name(s) in Full

  Address(es)   Number of Shares   S.S. or IRS #                                
         

 

(4)If the Warrant was not exercised in full, please check the following:

 

The undersigned hereby irrevocably directs that any remaining portion of the
warrant be issued and delivered as follows:

 

 Name(s) in Full

  Address(es)   Number of Shares   S.S. or IRS #                                
         

 

    Signature of Holder           Print Name