WARRANT TO PURCHASE SHARES OF
COMMON STOCK OF ▇▇▇▇▇▇ TECHNOLOGIES, INC.
December 27, 1999
Long Island City, New York
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
VOID AFTER 5:00 P.M., NEW YORK TIME
ON DECEMBER 27, 2006
THIS CERTIFIES THAT for value received, GREYSTONE FUNDING CORPORATION, a
Virginia corporation ("Greystone"), or their registered permitted assigns
(together with Greystone, hereinafter collectively referred to as the "Holder"),
may subscribe for and purchase, subject to the terms and conditions hereof, from
▇▇▇▇▇▇ TECHNOLOGIES, INC., a Delaware corporation (the "Company"), _____________
___________________________________ shares of Common Stock of the Company, par
value $0.01 per share (the "Common Stock"), at any time during the period (the
"Exercise Period") commencing at 9:00 a.m. New York Time on December 27, 1999
(the "Effective Date") and ending at 5:00 p.m. New York Time, on December 27,
2006, a date which is seven (7) years from the Effective Date (the "Expiration
Date"), at an exercise price which shall be equal to seventy-five ($0.75) cents
per share of Common Stock (the "Exercise Price"). The number of shares of Common
Stock issuable upon exercise of this Warrant, the Exercise Price, and the kind
of securities issuable upon exercise of this Warrant, shall be subject to
adjustment from time to time upon the occurrence of certain events as set forth
below. The shares of Common Stock issuable upon exercise of this Warrant, as
adjusted from time to time, is sometimes referred to hereinafter as "Warrant
Shares."
1. Exercise Price and Expiration. (a) This Warrant may be exercised in
whole or in part on any Business Day (as such term is hereinafter defined) at
any time during the Exercise Period upon surrender to the Company, at its
address for notices set forth in Section 8 of this Warrant (or at such other
office of the Company, if any, or such other office of the Company's duly
authorized agent for such purpose, as may be maintained by the Company for such
purpose and so designated by the Company by written notice to the Holder prior
to such exercise), together with the following: (i) a duly completed and
executed Notice of Warrant Exercise in the form annexed hereto, and (ii) payment
of the full Exercise Price for this Warrant or the portion thereof then being
exercised. This Warrant and all rights and options hereunder shall expire on,
and shall be immediately wholly null and void to the extent the Warrant is not
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properly exercised prior to the Expiration Date. As used in this Warrant the
term "Business Day" shall mean the time period between 9:00 a.m. New York, New
York Time and 5:00 p.m. New York, New York Time on any day other than any
Saturday, Sunday, or any other day on which commercial banks in New York, New
York are required or are authorized by law to close.
(b) Such Exercise Price shall be paid in lawful money of the United States
of America by bank cashier's check or by wire transfer of immediately available
funds to such account as shall have been designated in writing by the Company to
the Holder from time to time. In addition, Greystone may pay the Exercise Price
by forgiving all or a portion of the amount outstanding on the line of credit
extended by Greystone to the Company so that Greystone shall be deemed to have
paid the Company one dollar for every dollar of the amount outstanding on the
line of credit it has forgiven. In lieu of paying such Exercise Price in cash,
the Holder of this Warrant may elect to exercise certain "cashless" exercise
rights on each occasion he or it elects to exercise this Warrant. Such
"cashless" exercise shall be elected by the Holder's indicating on the Notice of
Exercise to the Company of his or its intention to exercise such cashless
exercise rights. The number of shares of Common Stock issuable to the Holder of
this Warrant upon any such "cashless" exercise shall be calculated as follows:
(i) The number of Warrant Shares issuable upon any full or partial
exercise of this Warrant (the "Subject Warrant Shares") shall be multiplied
by the Exercise Price then in effect. The product thereof shall be deemed
to be the "Exercise Cost."
(ii) The Subject Warrant Shares shall be multiplied by the closing
price of the Company's Common Stock, as traded on The Nasdaq Stock
Exchange, the OTC Bulletin Board or any other national securities exchange
and as reported by Bloomberg's, on the date that Notice of Exercise shall
be given by the Holder of the Warrant (the "Subject Closing Price"). The
product thereof shall be deemed to be the "Exercise Value."
(iii) The Exercise Value shall be subtracted from the Exercise Cost
and the positive result thereof, if any, shall be deemed the "Profit."
(iv) The Company shall issue that number of shares of Common Stock as
shall be determined by dividing the Profit by the Subject Closing Price.
(c) Upon the Holder's surrender of the Warrant and payment of the Exercise
Price or cashless exercise election, as set forth above, the Company shall
promptly issue and cause to be delivered to the Holder a certificate or
certificates for the total number of whole shares of Common Stock for which this
Warrant is then so exercised, as the case may be (adjusted to reflect the effect
of the anti-dilution provisions contained in Section 2 of this Warrant, if any)
in such denominations as are requested for delivery to the Holder, and the
Company shall thereupon deliver such certificates to the Holder. The Holder
shall be deemed to be the Holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be actually delivered to the Holder. If, at the
time this Warrant is exercised, a registration statement under the Securities
Act is not then in effect to register under said Securities Act the Warrant
Shares issuable upon
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exercise of this Warrant (together with any applicable state securities law
registrations), the Company may require the Holder to make such representations,
and may place such legends on certificates representing the Warrant Shares, as
may be reasonably required in the opinion of counsel to the Company to permit
the Warrant Shares to be issued without such registration, unless the Company
receives an opinion of counsel reasonably satisfactory to counsel to the Company
to the effect that said securities may be freely traded without registration
under the Securities Act.
(d) If the Holder shall exercise this Warrant with respect to less than all
of the Warrant Shares that may then be purchased under this Warrant, having
taken into account any prior exercise of the Warrant, the Company shall promptly
execute and deliver to the Holder a new warrant in the form of this Warrant for
the balance of such Warrant Shares.
2. Certain Anti-dilution Adjustments.
(a) If the Company shall (i) pay a dividend or make a distribution
generally to all or substantially all holder of shares of Company Common Stock
in the form of additional shares of Common Stock, (ii) subdivide or split or
reverse split or consolidate the outstanding shares of Common Stock into a
larger or smaller number of shares, (iii) effect an increase or decrease in the
number of issued and outstanding shares of Common Stock without consideration,
or (iv) effect a recapitalization which shall reclassify the outstanding shares
of Common Stock into one or more classes of Common Stock, then the number of
shares of Common Stock issuable upon exercise of this Warrant and the Exercise
Price shall be equitably and proportionately adjusted immediately following the
occurrence of any such event, and the Holder of record of this Warrant shall be
given notice of the same at such ▇▇▇▇▇▇'s address in the Company's books and
records. An adjustment made pursuant to this Section shall become effective
immediately after the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision, split,
combination or reclassification; provided, if such record date shall have been
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the exercise price shall be recomputed
accordingly as of the close of business on such record date and thereafter such
exercise price in effect shall be as adjusted pursuant to this Section as of the
time of actual payment of such dividend or distribution.
(b) In case the Company shall issue shares of Common Stock ("Additional
Shares") or in case the Company shall issue rights, options or warrants to
purchase shares of Common Stock or securities convertible into or exchangeable
for Common Stock, in any case at a Price Per Share (as defined in paragraph (c)
below) or, where no cash payment is paid, for consideration having a reasonable
value which is lower than the Exercise Price then in effect (the "Trigger
Price"), the number of Warrant Shares hereafter purchasable upon the exercise of
this Warrant shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of this Warrant by the following fraction:
(A)(i) The number of shares of Common Stock outstanding immediately prior
to the issuance of such Additional Shares or rights, options, warrants or
convertible securities, plus (ii) the number of Additional Shares actually
subscribed for and purchased and
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shares of Common Stock issuable upon conversion or exercise of such rights,
options, warrants, or convertible securities, divided by
(B)(i) The number of shares of Common Stock outstanding immediately prior
to issuance of such Additional Shares or rights, options, warrants or
convertible securities plus (ii) the number of shares of Common Stock which
the aggregate Proceeds (as defined in paragraph (c) below) received by the
Company upon the sale of such Additional Shares or exercise or conversion
of such rights, options, warrants and convertible securities would purchase
at the Trigger Price.
Such adjustment shall be made whenever such Additional Shares or rights,
options, warrants or convertible securities are issued, and shall become
effective on the date of distribution retroactive to the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.
(a) For purposes of this Section 2, "Price Per Share" shall be defined
and determined according to the following formula:
R
P = ------
N
where
P = Price Per Share,
R = the "Proceeds" received or receivable by the Company which (i) in
the case of shares of Common Stock is the total amount received or
receivable by the Company in consideration for the sale and issuance
of such shares; (ii) in the case of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of securities
convertible into or exchangeable or exercisable for shares of Common
Stock, is the total amount received or receivable by the Company in
consideration for the sale and issuance of such rights, options,
warrants or convertible or exchangeable or exercisable securities,
plus the minimum aggregate amount of additional consideration, other
than the surrender of such convertible or exchangeable securities,
payable to the Company upon exercise, conversion or exchange thereof;
and (iii) in the case of rights, options or warrants to subscribe for
or purchase convertible or exchangeable or exercisable securities, is
the total amount received or receivable by the Company in
consideration for the sale and issuance of such rights, options or
warrants, plus the minimum aggregate amount of additional
consideration other than the surrender of such convertible or
exchangeable securities, payable upon the exercise, conversion or
exchange of such rights, options or warrants and upon the conversion
or exchange or exercise of the convertible or exchangeable or
exercisable securities; provided that in each case the proceeds
received or receivable by the Company shall be deemed to be the gross
cash proceeds without deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by
underwriters or
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dealers or other performing similar services or any expenses incurred
in connection therewith,
and
N = the "Number of Shares," which (i) in the case of Common Stock is
the number of shares issued; (ii) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable or exercisable for shares
of Common Stock, is the maximum number of shares of Common Stock
initially issuable upon exercise, conversion or exchange thereof; and
(iii) in the case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable or exercisable securities, is the
maximum number of shares of Common Stock initially issuable upon
conversion, exchange or exercise of the convertible, exchangeable or
exercisable securities issuable upon the exercise of such rights,
options or warrants.
If the Company shall issue shares of Common Stock or rights, options,
warrants or convertible or exchangeable or exercisable securities for a
consideration consisting, in whole or in part, of property or other items other
than cash, the amount of such consideration shall be determined in good faith by
the majority vote of the Board of Directors of the Company whose determination
shall be conclusive and binding upon the Holder(s) of this Warrant.
(b) Whenever the number of Warrant Shares purchasable upon the exercise of
this Warrant is adjusted, as herein provided, the Exercise Price payable upon
exercise of this Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of Warrant Shares purchasable upon the exercise of this Warrant
immediately prior to such adjustment, and of which the denominator shall be the
number of Warrant Shares purchasable immediately thereafter.
(c) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless such adjustment would result in an increase or decrease
of at least one percent (1%) of the Exercise Price; provided that any
adjustments which by reason of this paragraph (c) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
(d) No adjustment in the number of Warrant Shares purchasable upon the
exercise of this Warrant need be made under paragraph (b) or (c) if the Company
issues or distributes to the holder of this Warrant the shares, rights, options,
warrants or convertible or exchangeable securities, or evidences of indebtedness
or assets referred to in those paragraphs which the holder of this Warrant would
have been entitled to receive had this Warrant been exercised prior to the
happening of such event or the record date with respect thereto. In no event
shall the Company be required or obligated to make any such distribution
otherwise than in its sole discretion. No adjustment in the number of Warrant
shares purchasable upon the exercise of this Warrant need be made for sales of
Common Stock pursuant to a Subsidiary Company
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plan for reinvestment of dividends or interest. No adjustment need be made for a
change in the par value of the Common Stock.
(e) In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the holder of this Warrant shall become
entitled to purchase any securities of the Company other than shares of Common
Stock, thereafter the number of such other shares so purchasable upon exercise
of this Warrant and the Exercise Price of such shares shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
paragraphs (a) through (d), inclusive, above.
3. Reorganization and Asset Sales.
If any capital reorganization or reclassification of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of the capital stock of the
Company to another corporation, or the sale of all or substantially all of the
assets or properties of the Company to another corporation, shall be effected in
such a manner so that Holder of Company Common Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Company
Common Stock, then, and in such event, the following provisions shall apply:
(a) Not more than 45 or less than 15 days prior to the consummation of any
such reorganization, reclassification, consolidation, merger or sale
(collectively, "Reorganization Transactions"), the Company shall notify the
Holder of the Reorganization Transaction (at the same time notice of same
shall be made generally available to the other Holders of Company Common
Stock), describing in such notice in reasonable detail the terms of the
Reorganization Transaction and the stock, securities or assets to be
received with respect to or in exchange for Common Stock of the Company. In
the event the Holder exercise this Warrant not more than 45 or less than 15
days prior to the consummation of the Reorganization Transaction, such
Holder shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock (collectively, "Reorganization
Consideration") on the same basis as the other Holder of Company Common
Stock participating in the Reorganization Transaction as if such Holder had
previously exercised this Warrant and held such number of Warrant Shares to
which they are entitled based on the Exercise Price.
(b) The Company shall not effect any such Reorganization Transaction unless
prior to or simultaneous with the consummation thereof, the successor
corporation (if other than the Company) resulting therefrom shall assume by
written instrument executed and made available to the Holder at the last
address of the Holder appearing on the books of the Company, the obligation
to deliver to the Holder such shares of stock, securities or assets, as, in
accordance with the foregoing provisions, the Holder may be entitled to
receive, any and all other liabilities and obligations of the Company
hereunder. In the event the Holder of this Warrant shall not exercise the
Warrant prior to or simultaneous with consummation of the Reorganization
Transaction, such Holder shall be entitled to receive a warrant to purchase
Common Stock in the successor corporation (if other than the Company) which
shall be appropriately adjusted as to exercise price, number of shares
6
which may be purchased thereunder and other terms, so as to equitably
reflect the Reorganization Transaction and entitle the Holder to purchase
that number of shares of Common Stock of the successor corporation
equivalent in value to the consideration that such Holder would have
received had Holder exercised this Warrant immediately prior to or
simultaneously with such Reorganization Transaction. In the event the
successor corporation (if other than the Company) resulting from the
Reorganization Transaction shall be a privately-held company and the
Reorganization Consideration, in part or in whole, shall be in the form of
securities for which there is no readily ascertainable market value by
virtue of not being traded on any national market or exchange, the Company
shall not effect any such Reorganization Transaction unless prior to or
simultaneous with the consummation thereof, the successor corporation shall
agree by written instrument executed and made available to the Holder at
the last address of the Holder appearing on the books of the Company to pay
to the Holder a cash amount equivalent in value to the difference between
the Exercise Price and the Fair Market Value multiplied by the number of
Warrant Shares that such Holder would have received had the Holder
exercised this Warrant immediately prior to or simultaneously with such
Reorganization Transaction.
(c) If a purchase, tender or exchange offer is made to and accepted by a
holder of more than fifty (50%) percent of the outstanding shares of Common
Stock of the Company, the Company shall, prior to the consummation of any
consolidation, merger or sale to or with the person, firm or corporation
having made such offer or any affiliate of such person, firm or
corporation, give the Holder a reasonable opportunity of not less than 10
days to elect to receive upon the exercise of this Warrant, either the
stock, securities or assets then issuable with respect to the Common Stock
of the Company or the stock, securities or assets, or the equivalent,
issued to previous Holder of the Common Stock in accordance with such
purchase tender or exchange offer.
4. Notice of Adjustment.
Whenever the Exercise Price and the number of Warrant Shares issuable upon
the exercise of this Warrant shall be adjusted as herein provided, or the rights
of the Holder shall change by reason of other events specified herein, the
Company shall compute the adjusted Exercise Price and the number of adjusted
Warrant Shares in accordance with the provisions hereof and shall prepare a
certificate signed by its Chief Executive Officer, or its President, or its
Chief Financial Officer, setting forth the adjusted Exercise Price and the
adjusted number of Warrant Shares issuable upon the exercise of this Warrant or
specifying the other shares of stock, securities, or assets receivable as a
result of such changes in rights, and showing in reasonable detail the facts and
calculations upon which such adjustments or other changes are based. The Company
shall cause to be mailed to the Holder copies of such officer's certificate
together with a notice stating that the Exercise Price and the number of Warrant
Shares purchasable upon exercise of this Warrant have been adjusted and setting
forth the adjusted Exercise Price and the adjusted number of Warrant Shares
purchasable upon the exercise of this Warrant.
5. Certain Representations of the Company.
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Throughout the Exercise Period, the Company has (i) all requisite power and
authority to issue this Warrant and the Warrant Shares, and (ii) sufficient
authorized and unissued shares of Common Stock to permit exercise of this
Warrant.
6. Certain Covenants of the Company.
(a) The Company shall take such steps as are necessary to cause the Company
to continue to have sufficient authorized and unissued shares of Common Stock
reserved in order to permit the exercise of the unexercised and unexpired
portion of this Warrant, if any.
(b) The Company covenants and agrees that all Warrant Shares issued upon
the due exercise of this Warrant will, upon issuance in accordance with the
terms hereof, be duly authorized, validly issued, fully paid and non-assessable
and free and clear of all taxes, liens, charges, and security interests created
by the Company with respect to the issuance thereof.
(c) The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of Warrant Shares upon the exercise of this Warrant;
provided, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue of this Warrant or of
any certificates for Warrant Shares in a name other than that of the Holder upon
the exercise of this Warrant, and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance 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.
(d) The Company covenants and agrees that if it fails (i) to register the
Warrant Shares as provided in the Registration Rights Agreement between the
Holder and the Company, dated of even date herewith, or (ii) to issue the shares
of Common Stock upon the proper exercise of the Warrant, then the Holder may
immediately commence an action for specific performance and/or damages.
7. No Shareholder Rights. No Holder of this Warrant shall, as such, be
entitled to vote or be deemed the holder of Common Stock or any other kind of
securities of the Company, nor shall anything contained herein be construed to
confer upon the Holder the rights of a shareholder of the Company or the right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or give or withhold consent to any
corporate action or to receive notice of meetings or other actions affecting
shareholders (except as otherwise expressly provided herein), or to receive
dividends or subscription rights or otherwise, until the date of Holder' proper
exercise of this Warrant as described herein.
8. Notices. Any notice, demand, request, waiver or other communication
under this Agreement must be in writing and will be deemed to have been duly
given (i) on the date of delivery if delivered by hand to the address of the
party specified below (including delivery by courier), or (ii) on the fifth day
after deposit in the U.S. Mail if mailed to the party to whom notice is to be
given to the address specified below, by first class mail, certified or
registered, return receipt requested, First Class postage prepaid:
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to the Company:
▇▇▇▇▇▇ Technologies, Inc.
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
the Holder: c/o Greystone & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Any party may from time to time change its address for the purpose of notices to
that party by a similar notice specifying a new address, but no such change will
be deemed to have been given until it is actually received by the party sought
to be charged with its contents.
9. General.
(a) This Warrant shall be governed by and construed in accordance with the
laws of the State of New York without regard to its conflict of laws provisions.
(b) Section and subsection headings used herein are included herein for
convenience of reference only and shall not affect the construction of this
Warrant or constitute a part of this Warrant for any other purpose.
(c) This Warrant may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument when instruments
originally executed by each party shall have been received by the Company.
(d) Greystone shall transfer a portion of this Warrant to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
pursuant to the procedure in Section 9(e) below based on an agreement between
Greystone and ▇▇. ▇▇▇▇▇▇.
(e) The Holder may surrender this Warrant to the Company in order to
receive a number of replacement warrants in various denominations to purchase in
the aggregate an equal number of Warrant Shares.
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IN WITNESS WHEREOF, the Company has duly executed this Warrant on and as of
the date first set forth above.
▇▇▇▇▇▇ TECHNOLOGIES, INC.
By:
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, CEO
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NOTICE
OF
WARRANT EXERCISE
TO ▇▇▇▇▇▇ TECHNOLOGIES, INC.:
The undersigned hereby irrevocably elects to exercise the Warrant and to
purchase thereunder ____ full shares of Common Stock issuable upon the exercise
of such Warrant.
Please check the applicable method by which the undersigned elects to
exercise the Warrant:
____ The Exercise Price for this warrant shall be paid by delivery of
$___________ in cash as provided for in the Warrant.
____ The Exercise Price for this warrant shall be paid by ▇▇▇▇▇▇▇▇▇'s
forgiveness of $_______ of its line of credit.
____ The undersigned elects to exercise his or its "cashless" exercise rights in
the manner provided in Section 1(b) of the Warrant.
The undersigned requests that certificates for such Warrant Shares be
issued in the name of:
Name: ____________________________________
Address: _________________________________
Employer I.D. or S.S. #: _________________
If such number of Warrants shall not be all the Warrants evidenced by the
Warrant document, the undersigned requests that a new document evidencing the
Warrants not so exercised issued and registered in the name of and delivered to:
_______________________________________
Name
_______________________________________
Address
_______________________________________
Employer I.D. or Social Security Number
Date: ________________ ----------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Warrant Certificate)