Warrant Agreement for
Nissko Warrants
4.2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, made this 26th day of March, 1996, by and
between:
FIDELITY HOLDINGS, INC., a Nevada corporation. with its principal office
located at ▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (hereinafter referred to as
the "COMPANY").
AND
EACH OF THE REGISTERED HOLDERS of the Company's warrants covered hereby
(and their registered assigns), from time to time, from the date of original
issue of such warrants to the expiration date thereof (hereinafter referred to
as the "INVESTORS", "HOLDER" and/or 'HOLDERS" as the context may require).
WITNESSETH THAT:
WHEREAS, the COMPANY has entered into a certain Agreement of even date
with the INVESTORS, in which such Agreement the COMPANY has agreed, in
consideration of the execution of such Agreement by the INVESTORS, to issue and
deliver Stock Purchase Warrants (hereinafter called the "WARRANTS") to the
INVESTORS entitling the HOLDERS thereof to purchase up to an aggregate of One
Million Five Hundred Thousand (1,500,000) shares of the Common Stock of the
COMPANY (hereinafter called the "Shares"); and
WHEREAS, the COMPANY desires to provide for the form and provisions of
the WARRANTS, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights, and immunities of the COMPANY and the
HOLDERS; and
WHEREAS, all acts and things necessary to make the WARRANTS, when
executed on behalf of the COMPANY, the valid, binding, and legal obligations of
the COMPANY, have been done and performed; and
WHEREAS, all acts and things necessary to authorize the execution and
delivery of this Warrant Agreement, and to execute and deliver the WARRANTS to
the INVESTORS as the original registered HOLDERS, have been done and performed;
NOW, THEREFORE, intending to be legally bound hereby, and intending the
original registered HOLDERS and their successors and assigns to rely hereon, the
COMPANY hereby represents and agrees, and the HOLDERS by acceptance of the
WARRANTS implicitly agree, as follows:
1. WARRANTS AUTHORIZED. COMPANY hereby authorizes the issuance to the
INVESTORS of One Million Five Hundred Thousand (1,500,000) WARRANTS upon the
terms and conditions of this Warrant Agreement. Such WARRANTS are divided into
two (2) types of WARRANTS: Seven Hundred Fifty Thousand (750,000) of the
WARRANTS shall be called the 1996-A Warrants and, subject to sub-paragraph 5(b)
below, shall be exercisable until 5:00 P.M. E.D.T. on the last day of the sixth
month after the date of issuance at an exercise price of $1.25 per share of
Common Stock; and Seven Hundred Fifty Thousand (750,000) of the WARRANTS shall
be called the 1996-B warrants and, subject to sub-paragraph 5(b) below, shall be
exercisable until 5:00 P.M. E.D.T. on the last day of the twenty-fourth month
after the date of issuance at an exercise price of $1.25 per share of Common
Stock.
2. FORM AND EXECUTION. Each WARRANT, whenever issued: (a) depending
upon the type of WARRANT, 750,000 WARRANTS (the 1996-A Warrants) shall be in
substantially the form attached hereto as Exhibit A and 750,000 WARRANTS (the
1996-B Warrants) shall be in substantially the form attached hereto as Exhibit
B; (b) shall be dated as of the date of issuance, which shall be the same date
as ,this Warrant Agreement; (c) shall entitle the HOLDER-to purchase the number
of Shares stated thereon; (d) shall be signed by the !President or Vice
President and the Secretary or Treasurer of the COMPANY; (e) and shall have the
company's seal impressed thereon. The COMPANY may adopt and use the facsimile
signature of any person who is a requisite officer of the COMPANY at the time
such WARRANTS are executed, or of any person now or hereafter holding such
office, notwithstanding the fact that at the time a WARRANT is issued he had
ceased to be such officer of the COMPANY. Prior to delivery of any WARRANT, it
shall be manually countersigned by the Warrant Agent. No WARRANT shall be valid
unless so countersigned.
3. WARRANT ISSUANCE AND ISSUANCE CONSIDERATION. These WARRANTS are
being hereby issued to the INVESTORS as the original
2
registered HOLDERS, such INVESTORS having entered into a certain Agreement with
the COMPANY for the purchase of fifteen (15) "Talkie Power Web Line Machines".
The consideration for the issuance of the WARRANTS is the execution of such a
large Agreement at this stage of the company's development. The INVESTORS are
acquiring these WARRANTS in a private transaction for their own investment
purposes and not with a view to transfer, resale or distribution of such
WARRANTS or the underlying Common Stock.
4. WARRANT EXERCISE PRICE. Each WARRANT (both 1996-A Warrants and
1996-B Warrants) shall entitle the registered HOLDER thereof, subject to the
provisions thereof and of this Warrant Agreement, to purchase from the COMPANY
the number of Shares of the company's Common Stock as stated thereon, at the
price of One Dollar and Twenty-five Cents ($1.25) per Share, both the number of
Shares and the price being subject to the anti-dilution adjustments provided in
Paragraph 8 hereof. The term Warrant Exercise Price" as used in this Warrant
Agreement refers to the price per Share at which Common Stock may be purchased
at the time a WARRANT is exercised.
5. DURATION (Term). (a) Subject to sub-paragraph (b) following, the
1996-A Warrants may be exercised at any time between the date of issuance and
the close of business (5:00 P.M. Eastern Daylight Time) on the last day of the
sixth month after the date of issuance, such date being hereinafter called the
"Expiration Date". Subject to sub-paragraph (b) following, the 1996-B Warrants
may be exercised at any time between the date of issuance and the close of
business (5:00 P.M. Eastern Standard Time) on the last day of the twenty-fourth
month after the date of issuance, such date being hereinafter called the
"Expiration Date". Each. WARRANT not exercised on or before its Expiration Date
shall become void, and all rights thereunder and all rights in respect thereof
under this Warrant Agreement shall cease at the close of business on the
respective Expiration Date. The COMPANY reserves the right to extend the
Expiration Date of either type of WARRANTS,'from time to time, any number of
times, but shall be under no obligation to do SO.
(b) Both the 1996-A Warrants and the 1996-B Warrants shall terminate prior to
the Expiration Date in the event that the contemporaneous Purchase Agreement
between the COMPANY's wholly-
3
owned subsidiary and Nissko Telecom, Inc. is terminated or Nissko Telecom, Inc.
fails to perform as required under such Purchase Agreement.
6. TRANSFER AND/OR EXCHANGE OF WARRANTS. On or after the date of
issuance and prior to the Expiration Date, any HOLDER of any WARRANT, subject to
the transfer restrictions of federal and state securities laws, at any time
prior to the exercise thereof, -may transfer all or any portion of the stock
purchase rights provided in the WARRANT. Upon presentation and surrender to the
Warrant Agent of the WARRANT, properly assigned, accompanied by appropriate
transfer instructions from the HOLDER, the Warrant Agent shall issue a WARRANT
for the assigned number of shares to the assignee as the new registered HOLDER
and shall issue a WARRANT for the unassigned balance of the shares to the
assigning (old) registered HOLDER. Any HOLDER of any WARRANT or WARRANTS, at any
time prior to the exercise thereof, may exchange such WARRANT or WARRANTS for a
WARRANT or WARRANTS of like tenor exercisable for the same aggregate number of
Common Shares as the WARRANT surrendered; i.e., consolidate or divide his
holdings. The Warrant Agent is the COMPANY's Transfer Agent, Olde Monmouth Stock
Transfer Co., ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. The COMPANY shall
give notice to the registered HOLDERS of WARRANTS of any change in the address
of, or in the designation of, its warrant Agent.
7. EXERCISE. (a) Except as otherwise provided in subparagraph (f)
below, a WARRANT shall be exercisable only by the registered HOLDER surrendering
it, together with the subscription form set forth in the WARRANT duly executed,
accompanied by payment, in full, in lawful money of the United States, of the
Warrant Exercise Price for each full Share as to which the WARRANT is exercised,
to the Warrant Agent. The Warrant Agent is the COMPANY's Transfer Agent, olde
Monmouth Stock Transfer Co., ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
The COMPANY shall give notice to the registered HOLDERS of WARRANTS of any
change in the address of, or in the designation of, its Warrant Agent.
(b) A WARRANT may be exercised wholly or in part. If a WARRANT is only
exercised in part, a new WARRANT for the number of shares as to which the
WARRANT shall not have been exercised shall
4
be issued to the registered HOLDER.
(c) As soon as practicable after the exercise of any WARRANT, the
COMPANY shall issue to or upon the order of the registered HOLDER a certificate
or certificates for the number of full Shares which he is entitled, registered
in such name or names as may be directed by him.
(d) All Shares issued upon exercise of a WARRANT shall be validly
issued, fully paid, and non-assessable. The COMPANY shall pay all taxes in
respect of the issue thereof. However, the registered HOLDER shall pay all taxes
imposed in connection with any transfer, even if involved in an issue of a
certificate, and the COMPANY shall not be required to issue or deliver any stock
certificate in such case until the tax shall have been paid.
(e) Each person in whose name any such certificate for Shares is issued
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which the WARRANT was surrendered and payment of the
Warrant Exercise Price and applicable taxes was made, irrespective of the date
of delivery of such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the COMPANY are closed, the
person or persons entitled to receive Shares upon such exercise shall be
considered the record holder or holders of such shares at the close of business
on the next succeeding date on which the stock transfer books are open and shall
be entitled to receive only dividends or distributions which are payable to
holders of record after that date.
(f) Notwithstanding sub-paragraph (a) above, with respect to full
payment upon exercise of a WARRANT, the 1996-A Warrants shall be exercisable by
the registered HOLDER surrendering-it, together with the subscription form set
forth in the WARRANT duly executed, accompanied by payment of at least ten
percent (10%) of the full Exercise Price for each full Share as to which the
WARRANT is exercised, in lawful money of the United states, to the Warrant
Agent. The shares shall be issued in escrow -and, held by the COMPANY for
release to the subscribing HOLDER only when the balance is paid in full. The
balance shall be paid in full on or before December 31, 1996; subject, however,
to an extension (grace period)
5
of no more than two (2) weeks in the discretion of the subscribing HOLDER. If
the balance is paid in full by the due date, as extended, the shares shall be
released to the subscribing HOLDER; if the balance is not paid in full by the
due date, as extended, the shares shall be returned to the Warrant Agent for
cancellation and the ten percent (10%) deposit shall be returned without
interest.
8. SHARE DIVIDENDS, RECLASSIFICATION, REORGANIZATION ANTI-DILUTION
PROVISIONS. Each WARRANT is subject to the following further provisions:
(a) In case, prior to the expiration of a WARRANT by exercise or by its
terms, the COMPANY shall issue any of its Common Stock as a share dividend or
subdivide the number of outstanding shares of Common Stock into a greater number
of shares, then, in either of such cases" the Purchase Price per share of the
Shares purchasable pursuant to a WARRANT in effect at the time of such action
shall be proportionately reduced and the number of Shares at the time
purchasable pursuant to a WARRANT shall be proportionately increased; and
conversely, in the event the COMPANY shall contract the number of outstanding
shares of Common Stock by combining such shares into a smaller number of shares,
then, in such case, the Purchase Price per share of the Shares purchasable
pursuant to a WARRANT in effect at the time of such action shall be
proportionately increased and the number of Shares at the time purchasable
pursuant to a WARRANT shall be proportionately decreased. If the COMPANY shall,
at any time during the life of a WARRANT, declare a dividend payable in cash on
its Common Stock and shall at substantially the same time offer to its
stockholders a right to purchase new Common Stock from the proceeds of such
dividend or for an amount substantially equal to the dividend, all shares of
Common Stock so issued shall, for the purpose of a WARRANT, be deemed to have
been issued as a share dividend. Any dividend paid or distributed upon the
Common Stock in 91 hares of any other class or securities convertible into
Common Stock shall be treated as a dividend paid in shares of Common Stock to
the extent that shares of Common Stock are issuable upon the conversion thereof.
(b) In case, prior to the expiration of a WARRANT by exercise
6
or by its terms, the COMPANY shall be recapitalized, or the COMPANY or a
successor corporation shall consolidate or merge with or convey all or
substantially all of its or of any successor corporation's property and assets
to any other corporation or corporations (any such corporation being included
within the meaning of the term "successor corporation" hereinbefore used in the
event of any consolidation or merger of any such corporation with, or the sale
of all or substantially all of the property of any such corporation to, another
corporation or corporations) , the holder of a WARRANT shall thereafter have the
right to purchase, upon the basis and on the terms and conditions and during the
time specif ied in a WARRANT in lieu of the Shares of the COMPANY theretof ore
purchasable, upon the exercise of a WARRANT, such shares, securities or assets
as may be issued or payable with respect to, or in exchange f or, the number of
Shares of the COMPANY theretof ore purchasable upon the exercise of a WARRANT
had such recapitalization, consolidation, merger, or conveyance not taken place;
and in any such event, the rights of the holder of a WARRANT to an adjustment in
the number of Shares purchasable upon the exercise of a WARRANT as herein
provided shall continue and be preserved in respect of any shares, securities,
or assets which the holder of a WARRANT becomes entitled to purchase.
(c) In case:
(i) the COMPANY shall take a record of the holders of its
common Shares f or the purpose of entitling them to
receive a dividend payable otherwise than in cash, or
any other distribution in respect of the common
Shares (including cash), pursuant to, without
limitation, any spin-off, split-off, or distribution
of the COMPANY's assets; or
(ii) the COMPANY shall take a record of the holders of its
Common Shares f or the purpose of entitling them to
subscribe for or purchase any shares of any class or
to receive any other rights; or
(iii) of any classification, reclassification, or
7
other reorganization of the shares which the COMPANY
is authorized to issue, consolidation or merger of
the COMPANY with or into another corporation, or
conveyance of all or substantially all of the assets
of the COMPANY; or
(iv) of the voluntary or involuntary dissolution,
liquidation, or winding up of the COMPANY;
then, and in any such case, the COMPANY shall mail to the holder of a WARRANT,
at least 21 days prior thereto, a notice stating the date or expected date on
which a record is to be taken f or the purpose of such dividend, distribution,
or rights, or the date on which such classification, reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation, or
winding up is to take place, as the case may be. Such notice shall also specify
the date or expected date, if any is to be fixed, as of which holders of Common
Stock of record shall be entitled to participate in such dividend, distribution,
or rights, or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such classification, reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation, or
winding up, as the case may be.
(d) In case the COMPANY at any time while a WARRANT shall remains
unexpired and unexercised shall sell all or substantially all of its property or
dissolve, liquidate, or wind up its affairs, the holder of a WARRANT may
thereafter receive upon exercise hereof in lieu of each Share which it would
have been entitled to receive the same kind and amount of any securities or
assets as may be issuable, distributable, or payable upon such sale,
dissolution, liquidation, or winding up with respect to each Share.
(e) The COMPANY plans to make an offering of convertible debentures or
convertible preferred stock or such other security which may be convertible into
Common Stock or carry warrants for the purchase of shares of Common stock. The
parties agree that this warrant issuance is related to such proposed.offering(s)
and no adjustments (as described in this Section 8) shall be made to any of the
WARRANTS on account of any such offering(s), for a
8
period of twenty-four (24) months from the date of the issuance of the first
warrant subject to this warrant agreement or until and unless the number of
shares of COMPANY's Common Stock outstanding exceeds twelve million (12,000,000)
shares. After such 24 month period, or at any time that the outstanding Common
Stock of the COMPANY exceeds 12,000,000 shares if earlier than 24 months, then
the provisions of Section 8 hereinabove shall have full force and effect on the
WARRANTS.
9. RESERVATION OF SHARES ISSUABLE ON EXERCISE OF WARRANTS. The COMPANY
shall at all times reserve and keep available out of its authorized shares,
solely for issuance upon the exercise of all WARRANTS issued hereunder, such
number of Common Shares and other shares as from time to time shall be issuable
upon the exercise of a WARRANT and all other similar WARRANTS at the time
outstanding.
10. LOSS, THEFT, DESTRUCTION OR MUTILATION. Upon receipt by the COMPANY
of evidence satisfactory to it, (in the exercise of its reasonable discretion),
of the ownership of and the loss, theft, destruction, or mutilation of a
WARRANT, and (in the case of loss, theft, or destruction) of indemnity
satisfactory to i@ (in the case of mutilation) upon surrender and cancellation
thereof e the COMPANY will execute and deliver, in lieu thereof, a new WARRANT
for like tenor.
WARRANT HOLDER NOT A SHAREHOLDER. The HOLDER of a WARRANT, as
such, shall not be entitled by reason of a WARRANT to any rights whatsoever of a
stockholder of the COMPANY. No HOLDER of any WARRANT shall be entitled to
receive any dividend or to vote with respect to any dividend declared or the
taking of a register of stockholders entitled to vote with a Record Date prior
to the date of exercise of the WARRANTS.
12. NOTICES. All notices and other communications from the COMPANY to
the HOLDER of a WARRANT shall be mailed by first-class registered mail, postage
prepaid, to the address furnished to the COMPANY in writing by the HOLDER)ER of
a WARRANT.
IN WITNESS WHEREOF, intending to be legally bound, the COMPANY
9
has executed this Warrant Agreement:
Dated: March 26, 1996
FIDELITY HOLDINGS, INC.
ATTEST:
By:________________________________
President
By:________________________________
Secretary
10
NO. 1996 - A 1996A WARRANT
RIGHT TO PURCHASE
__________ SHARES
FIDELITY HOLDINGS, INC.
(a Nevada Corporation)
1996A WARRANT
VOID AFTER 5:00 P.M. EDT, SEPTEMBER 19, 1996
THIS IS TO CERTIFY THAT:
--------------------------------------------------------------------------------
or registered assigns, is entitled to purchase, on or before 5:00 p.m. Eastern
Daylight Time on September 19, 1996, that number of shares (subject to
anti-dilution protection provisions contained in the Warrant Agreement) of the
Common Stock of Fidelity Holdings, Inc. (the "Company") at a price of One Dollar
and Twenty-five Cents ($1.25) per share, upon presentation of this Warrant and
payment of the purchase price at the office of the Warrant Agent; subject,
however, to the terms of the Warrant Agreement under which this Warrant has been
issued, which is incorporated by reference, and to which the holder hereof
assents by acceptance of this Warrant. This Warrant, the purchase rights
represented hereby, and all of the rights of each holder with respect thereto,
are subject to all of the terms, conditions, rights, limitations and other
provisions of the Warrant Agreement and in the event of any conflict between the
terms of this Warrant and the terms of the Warrant Agreement, the Warrant
Agreement shall control.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time prior to expiration.
Subject to the right of the Company to extend the expiration date as set forth
in the Warrant Agreement, this Warrant and the purchase rights it represents
expire at 5:00 p.m. on September 19, 1996 and thereafter shall be void and of no
effect. Notwithstanding the foregoing specific Expiration Date, this Warrant
shall terminate prior to the Expiration Date in the event that the
contemporaneous Purchase Agreement between Computer Business Sciences, Inc., the
COMPANY'S wholly-owned subsidiary, and Nissko-Delaware is terminated or
Nissko-Delaware fails to perform as required under such Purchase Agreement.
The number of shares purchasable upon the exercise of this Warrant and
the purchase price per share shall be subject to adjustment from time to time,
to provide anti-dilution protection, as set forth in the Warrant Agreement.
This Warrant shall not entitle the registered owner or any holder to
voting rights or other rights as a stockholder of the Company or to any other
rights whatsoever except the rights herein expressed or expressed in the Warrant
Agreement, and no dividends shall be payable or accrue in respect of this
Warrant or the interest represented hereby or the shares purchasable hereunder
until, or unless, and to the extent that, this Warrant shall be exercised.
This Warrant is exchangeable upon its surrender to the Company by the
registered owner, for new Warrants of like tenor and date, representing in the
aggregate the right to purchase the number of shares purchasable hereunder.
Except as otherwise above provided, this Warrant and all rights
hereunder are transferable by the registered owner hereof in person or by duly
authorized attorney on the books of the Company upon surrender to the Company of
this Warrant, properly endorsed.
The Company may deem and treat the registered owner of this Warrant at
all times as the absolute owner hereof for all purposes and such shall not be
affected by any notice to the contrary.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by the signatures of its duly authorized officers and the corporate seal
hereunto affixed.
Dated: March 26, 1996
At: Flushing, New York
FIDELITY HOLDINGS, INC.
ATTEST:
BY:___________________________
President
BY:___________________________
Secretary
SUBSCRIPTION FORM
(To be executed by the Registered Holder
upon exercise of Warrant)
NOTE: If less than all of the shares for which this Warrant is exercisable are
subscribed for, the Warrant Agent will return a new Warrant for the unexercised
balance.
The undersigned, Registered Holder or assignee of such Registered
Holder of the within Warrant, hereby (1) subscribes for ____ Shares of the
Common Stock which the undersigned is entitled to purchase under the terms of
the within Warrant, (2) makes cash payment of ten percent (10%) of the Exercise
Price called for by the within Warrant for the number of shares as to which this
Warrant is exercised, with the understanding that the shares will be held in
escrow by the Company until receipt of the balance of the Exercise Price as
provided in the Warrant Agreement, and (3) directs that the Shares of Common
Stock issuable upon exercise of the within Warrant be issued as follows:
Name:___________________________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________
Dated:_____________________, 1996
Signature(s):-------------------------------
-------------------------------
--------------------------------------------------------------------------------
NOTICE: The signature(s) on this Subscription Form must correspond with the
name(s) as written upon the face of the within Warrant, or upon the assignment
form on the reverse thereof, in every particular, without alteration or
enlargement, or any change whatsoever, and must be guaranteed by a bank or by a
firm having registered membership on a registered securities exchange.
ASSIGNMENT
(To be executed by the Registered Holder
to effect a transfer of the within Warrant)
NOTE: If less tan all of the shares for which this Warrant is exercisable are
assigned, the Warrant Agent will return a new Warrant for the unassigned
balance.
FOR VALUE RECEIVED the undersigned Registered Holder(s) of the within
Warrant hereby sell(s), assign(s), and transfer(s) the right to purchase ___
Shares of Common Stock evidenced by the within Warrant and do irrevocably
constitute and appoint
--------------------------------------------------------------------------------
to transfer such right on the books of the Company with full power of
substitution.
Dated: ___________________________, 1996
Signatures(s):------------------------------
------------------------------
--------------------------------------------------------------------------------
NOTICE: The signature(s) on this Subscription Form must correspond with the
name(s) as written upon the face of the within Warrant, or upon the assignment
form on the reverse thereof, in every particular, without alteration or
enlargement, or any change whatsoever, and must be guaranteed by a bank or by a
firm having registered membership on a registered securities exchange.
NO. 1996 - B _____ 1996B WARRANT
RIGHT TO PURCHASE
__________ SHARES
FIDELITY HOLDINGS, INC.
(a Nevada Corporation)
1996A WARRANT
VOID AFTER 5:00 P.M. EDT, MARCH 19, 1998
THIS IS TO CERTIFY THAT:
--------------------------------------------------------------------------------
or registered assigns, is entitled to purchase, on or before 5:00 p.m. Eastern
Daylight Time March 19, 1998, that number of shares (subject to anti-dilution
protection provisions contained in the Warrant Agreement) of the Common Stock of
Fidelity Holdings, Inc. (the "Company") at a price of One Dollar and Twenty-five
Cents ($1.25) per share, upon presentation of this Warrant and payment of the
purchase price at the office of the Warrant Agent; subject, however, to the
terms of the Warrant Agreement under which this Warrant has been issued, which
is incorporated by reference, and to which the holder hereof assents by
acceptance of this Warrant. This Warrant, the purchase rights represented
hereby, and all of the rights of each holder with respect thereto, are subject
to all of the terms, conditions, rights, limitations and other provisions of the
Warrant Agreement and in the event of any conflict between the terms of this
Warrant and the terms of the Warrant Agreement, the Warrant Agreement shall
control.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole at any time prior to expiration.
Subject to the right of the Company to extend the expiration date as set forth
in the Warrant Agreement, this Warrant and the purchase rights it represents
expire at 5:00 p.m. on September 19, 1996 and thereafter shall be void and of no
effect. Notwithstanding the foregoing specific Expiration Date, this Warrant
shall terminate prior to the Expiration Date in the event that the
contemporaneous Purchase Agreement between Computer Business Sciences, Inc., the
COMPANY'S wholly-owned subsidiary, and Nissko-Delaware is terminated or
Nissko-Delaware fails to perform as required under such Purchase Agreement.
The number of shares purchasable upon the exercise of this Warrant and
the purchase price per share shall be subject to adjustment from time to time,
to provide anti-dilution protection, as set forth in the Warrant Agreement.
This Warrant shall not entitle the registered owner or any holder to
voting rights or other rights as a stockholder of the Company or to any other
rights whatsoever except the rights herein expressed or expressed in the Warrant
Agreement, and no dividends shall be payable or accrue in respect of this
Warrant or the interest represented hereby or the shares purchasable hereunder
until, or unless, and to the extent that, this Warrant shall be exercised.
This Warrant is exchangeable upon its surrender to the Company by the
registered owner, for new Warrants of like tenor and date, representing in the
aggregate the right to purchase the number of shares purchasable hereunder.
Except as otherwise above provided, this Warrant and all rights
hereunder are transferable by the registered owner hereof in person or by duly
authorized attorney on the books of the Company upon surrender to the Company of
this Warrant, properly endorsed.
The Company may deem and treat the registered owner of this Warrant at
all times as the absolute owner hereof for all purposes and such shall not be
affected by any notice to the contrary.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by the signatures of its duly authorized officers and the corporate seal
hereunto affixed.
Dated: March 26, 1996
At: Flushing, New York
FIDELITY HOLDINGS, INC.
ATTEST:
BY:___________________________
President
BY:___________________________
Secretary
SUBSCRIPTION FORM
(To be executed by the Registered Holder
upon exercise of Warrant)
NOTE: If less than all of the shares for which this Warrant is exercisable are
subscribed for, the Warrant Agent will return a new Warrant for the unexercised
balance.
The undersigned, Registered Holder or assignee of such Registered
Holder of the within Warrant, hereby (1) subscribes for ____ Shares of the
Common Stock which the undersigned is entitled to purchase under the terms of
the within Warrant, (2) makes cash payment of ten percent (10%) of the Exercise
Price called for by the within Warrant for the number of shares as to which this
Warrant is exercised, with the understanding that the shares will be held in
escrow by the Company until receipt of the balance of the Exercise Price as
provided in the Warrant Agreement, and (3) directs that the Shares of Common
Stock issuable upon exercise of the within Warrant be issued as follows:
Name:__________________________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________
Dated:_____________________, 199_
Signature(s):-------------------------------
-------------------------------
-------------------------------------------------------------------------------
NOTICE: The signature(s) on this Subscription Form must correspond with the
name(s) as written upon the face of the within Warrant, or upon the assignment
form on the reverse thereof, in every particular, without alteration or
enlargement, or any change whatsoever, and must be guaranteed by a bank or by a
firm having registered membership on a registered securities exchange.
ASSIGNMENT
(To be executed by the Registered Holder
to effect a transfer of the within Warrant)
NOTE: If less than all of the shares for which this Warrant is exercisable are
assigned, the Warrant Agent will return a new Warrant for the unassigned
balance.
FOR VALUE RECEIVED the undersigned Registered Holder(s) of the within
Warrant hereby sell(s), assign(s), and transfer(s) the right to purchase ___
Shares of Common Stock evidenced by the within Warrant and do irrevocably
constitute and appoint
--------------------------------------------------------------------------------
to transfer such right on the books of the Company with full power of
substitution.
Dated: ___________________________, 199_
Signatures(s):------------------------------
------------------------------
--------------------------------------------------------------------------------
NOTICE: The signature(s) on this Subscription Form must correspond with the
name(s) as written upon the face of the within Warrant, or upon the assignment
form on the reverse thereof, in every particular, without alteration or
enlargement, or any change whatsoever, and must be guaranteed by a bank or by a
firm having registered membership on a registered securities exchange.