THIS WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,...
EXHIBIT
10.6
|
THIS
WARRANT AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED PURSUANT
TO
THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND SUCH SECURITIES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE RULES
AND
REGULATIONS THEREUNDER.
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A CREDIT AGREEMENT DATED
NOVEMBER
23, 2005, AS AMENDED, BY AND AMONG THE COMPANY AND THE INVESTMENT
MANAGER
AND LENDER NAMED THEREIN. A COPY OF SUCH AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER OF THIS WARRANT WITHOUT CHARGE UPON
WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF
BUSINESS. |
| No. W–COL-1 |
Void
After Expiration Date
|
|
(as
defined below)
|
WARRANT
TO
PURCHASE COMMON STOCK OF
Dated
August 21, 2007
THIS
WARRANT CERTIFIES THAT, for value received, NATIONAL ELECTRICAL BENEFIT FUND
or
its permitted transferees (the “Holder”) is entitled to purchase from MTM
TECHNOLOGIES, INC., a New York corporation (the “Company”), up to the
number of fully paid and nonassessable shares (the “Shares”) of Common
Stock, $.001 par value per share, of the Company, as further described and
defined below. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms in that certain Credit
Agreement, dated November 23, 2005, as amended, by and among the Company,
the
Holder and the Investment Manager and Lender named therein (the “Credit
Agreement”).
Section 1. Number
of
Shares. The maximum number of shares of Common Stock which may be
purchased upon the exercise of this Warrant is 700,000.
Section 2. Exercise
Price. The price per share at which the Holder may purchase the
Common Stock shall be $ 1.17 per share (the “Exercise Price”), as
adjusted from time to time in accordance with Section 6 hereof.
Section 3. Expiration
Date. This Warrant shall expire at 5:00 p.m. New York Time on
August 21, 2014 (the “Expiration Date”). Upon the Expiration
Date, all rights of the Holder to purchase Common Stock pursuant to this
Warrant
shall immediately terminate.
Section 4. Exercise
and Payment.
Section 4.1 Exercise.
The
purchase rights represented by this Warrant may be exercised by the Holder,
in
whole or in part at any time following the date hereof and from time to time,
by
the surrender of this Warrant (together with a duly executed notice of exercise
in the form attached hereto as Exhibit A-1) at the principal office of
the Company, and (a) by the payment to the Company, by wire transfer of
immediately available funds, of an amount equal to the aggregate Exercise
Price
of the Shares being purchased or (b) by the reduction by the Holder of the
principal amount of the Note of the Company issued to the Holder on the date
hereof in an amount equal to the aggregate Exercise Price of the Shares being
purchased.
Section 4.2 Net
Issue Election. The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares equal to the
value
of this
2
Warrant
or any portion hereof by the surrender of this Warrant or such portion (together
with a duly executed notice of exercise in the form attached hereto as
Exhibit A-2) at the principal office of the
Company. Thereupon, the Company shall issue to the Holder such number
of shares of Common Stock as is computed using the following
formula:
X
= Y
(A-B)
A
Where
|
|
X
=
|
the
number of shares of Common Stock to be issued to the Holder pursuant
to
this Section 4.2.
|
|
|
Y
=
|
the
number of shares of Common Stock covered by this Warrant in respect
of
which the net issue election is made pursuant to this
Section 4.2.
|
|
|
A
=
|
the
Fair Market Value of one share of Common Stock, as determined in
accordance with Section 7 herein, as at the time the net
issue election is made pursuant to this
Section 4.2.
|
|
|
B
=
|
the
Exercise Price in effect under this Warrant at the time the net
issue
election is made pursuant to this
Section 4.2.
|
Section 4.3 Stock
Certificates. In the event of the exercise of all or any portion
of this Warrant, certificates for the shares of Common Stock so purchased
shall
be delivered to the Holder by the Company at the Company's own expense
(including the payment by the Company of any applicable issue taxes or
governmental charges imposed in connection with the issuance or delivery
of the
Common Stock) within a reasonable time, which shall in no event be later
than
ten (10) days thereafter and, unless this Warrant has been fully exercised
or
has expired, a new Warrant representing the Shares with respect to which
this
Warrant shall not have been exercised shall also be issued to the Holder
within
such time.
If
this
Warrant shall be surrendered for exercise within any period during which
the
transfer books for shares of the Common Stock or other securities purchasable
upon the exercise of this Warrant are closed for any purpose, the Company
shall
not be required to make delivery of certificates for the securities purchasable
upon such exercise until the date of the reopening of said transfer
books.
3
Section 5. Stock
Fully Paid; Reservation of Shares. All of the Shares issuable
upon the exercise of this Warrant will, upon issuance and receipt of the
Exercise Price therefor, be duly authorized, validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof,
and
free and clear of all taxes, liens, encumbrances and charges with respect
to the
issue thereof. During the period within which this Warrant may be
exercised, the Company shall at all times have authorized and reserved for
issuance sufficient shares of its Common Stock to provide for the exercise
of
this Warrant.
Section 6. Adjustment
of Exercise Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise
Price
therefor shall be subject to adjustment from time to time upon the occurrence
of
certain events, as follows:
Section 6.1 Adjustments
for
Subdivisions of Common Stock. If the number of shares of Common
Stock outstanding at any time is increased by a stock dividend payable in
shares
of Common Stock or by a subdivision or split up of stock, then the Exercise
Price then in effect shall, concurrently with the effectiveness of such
dividend, subdivision or split up, be proportionately decreased and the number
of shares of Common Stock issuable upon exercise of this Warrant shall be
increased in proportion to such increase of outstanding shares of Common
Stock.
Section 6.2 Adjustments
for Combinations Common Stock. If the number of shares of Common
Stock outstanding at any time is decreased by a combination of the outstanding
shares of Common Stock, then the Exercise Price then in effect shall,
concurrently with the effectiveness of such combination, be proportionately
increased and the number of shares of Common Stock issuable upon exercise
of
this Warrant shall be decreased in proportion to such decrease in outstanding
shares of Common Stock.
Section 6.3 Adjustments
for Reclassification, Exchange and Substitution. Upon a Notice
Event (as defined below), if the Common Stock issuable upon exercise of this
Warrant shall be changed into the same or a different number of shares of
any
other class or classes of stock, whether by capital reorganization, merger,
reclassification or otherwise (other than a subdivision or combination of
shares
provided for above) this Warrant shall thereafter be exercisable into, in
lieu
of the number of shares of Common Stock which the Holder would otherwise
have
been entitled to receive, a number of shares of such other class or classes
of
stock equivalent to the number of shares of Common Stock that would have
been
subject to receipt by the Holder upon exercise of this Warrant immediately
before that change.
Section 6.4 Notice
of
Certain Events. In the event (each, a “Notice
Event”): (a) the Company authorizes the issuance to all
holders of Common Stock rights or warrants to subscribe for or purchase shares
of its capital stock, or any other subscription rights or warrants; (b) the
Company authorizes the distribution to all holders of Common Stock evidences
of
indebtedness or assets or other securities; (c) of any capital
reorganization or reclassification of Common Stock, other than a subdivision
or
4
combination
of the outstanding Common Stock and other than a change in par value of the
Common Stock; (d) of any liquidation or merger to which the Company is a
party and for which approval of any of the Company's holders of Common Stock
is
required, other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or
change of the shares of Common Stock issuable upon the exercise of this Warrant;
(e) of the conveyance or transfer of the Company's properties and assets,
substantially as an entirety; or (f) of the Company's voluntary or involuntary
dissolution, liquidation or winding-up; then, in each case, the Company shall
cause to be mailed by certified mail to the Holder, at least 10 days prior
to the applicable record or effective date hereinafter specified, a notice
stating the material terms relating to the exercise of the Warrants, the
name,
title and telephone number of a Company representative who shall be available
to
answer any questions relating to such exercise and the dates as of which
(i) the
holders of Common Stock of record will be entitled to receive any such rights,
warrants or distributions are to be determined, (ii) such Notice Event is
expected to become effective and (iii) that Holders of record of Warrants
shall be entitled to exchange or sell their shares of Common Stock issuable
upon
the exercise of this Warrant for securities or other property, if any,
deliverable upon such Notice Event. In addition, if the Company
receives written notice that a purchase, tender or exchange offer has been
made
to the holders of more than 50% of the outstanding Common Stock, the Company
shall give the Holder reasonable notice (but will not be required to give
not
more than 10 days notice) thereof.
Section 7. Fractional
Shares. No fractional shares of Common Stock will be issued in
connection with any exercise hereunder. In lieu of such fractional
shares the Company shall make a cash payment therefor based upon the fair
market
value of the Common Stock on such date as determined by the board of directors
of the Company.
Section 8. Restrictions
on Transfer.
Section 8.1 Transfer. The
Holder may transfer this Warrant and the shares of Common Stock issuable
upon
exercise of this Warrant, and the rights and obligations attached thereto,
so
long as (a) any such transfer(s) comply with applicable securities laws and
(b)
unless such securities have been registered in accordance with applicable
securities laws and transferred pursuant to a non-private, open market
transaction on the securities exchange on which the Company’s Common Stock is
listed, if such transferee is not a United States citizen or an entity formed
under the laws of a U.S. jurisdiction, the Holder obtains the Company’s consent
for such transfer (which shall not be unreasonably withheld).
Section 8.2 Restrictive
Legend. Unless a registration statement is in effect with respect
thereto, each certificate representing (i) the Shares and (ii) any other
securities issued in respect of the Shares upon any stock split, stock dividend
or recapitalization (collectively, the “Restricted Securities”), shall be
endorsed as follows:
|
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS
AMENDED (THE “ACT”), AND SUCH SECURITIES MAY NOT BE
OFFERED,
|
5
| SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE RULES AND REGULATIONS
THEREUNDER.
THIS
SECURITY IS SUBJECT TO THE TERMS AND CONDITIONS OF A CREDIT AGREEMENT
DATED NOVEMBER 23, 2005, AS AMENDED, BY AND AMONG THE COMPANY AND
THE
INVESTMENT MANAGER AND LENDER NAMED THEREIN. A COPY OF SUCH
AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER OF THIS WARRANT
WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE
OF
BUSINESS.
|
Section 9. No
Rights
of Stockholders. This Warrant does not entitle the Holder to any
voting rights as a stockholder of the Company prior to the exercise of the
Warrant. Nothing in this Warrant shall obligate the Holder to
exercise this Warrant, it being understood that the decision as to whether
to
exercise the Warrant shall be made exclusively by the Holder.
Section 10. No
Impairment. The Company will not, by amendment of its Certificate
of Incorporation, as amended and restated, 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 to be observed or performed hereunder
by the
Company, but it will at all times in good faith assist in the carrying out
of
all of the provisions of this Warrant and in the taking of all such action
as
may be necessary or appropriate in order to protect the rights of the holder
of
this Warrant against impairment.
Section 11. Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and
upon
surrender and cancellation of this Warrant, if mutilated, the Company will
make
and deliver a new Warrant of like tenor and dated as of such cancellation,
in
lieu of this Warrant.
Section 12. 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 be a Saturday or a Sunday or shall be a legal holiday, then such action
may be taken or such right may be exercised on the next succeeding day not
a
Saturday or a Sunday or a legal holiday.
6
Section 13. Miscellaneous.
Section 13.1 Governing
Law. This Warrant shall be governed by and construed in all
respects in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.
Section 13.2 Entire
Agreement; Amendment. Each party hereby acknowledges that no
other party or any other person or entity has made any promises, warranties,
understandings or representations whatsoever, express or implied, not contained
in the Loan Documents and acknowledges that it has not executed this Warrant
in
reliance upon any such promises, representations, understandings or warranties
not contained herein or therein and that the Loan Documents supersede all
prior
agreements and understandings between the parties with respect
thereto. There are no promises, covenants or undertakings other than
those expressly set forth or provided for in the Loan
Documents. Neither this Warrant nor any term hereof may be amended,
waived, discharged, or terminated other than by a written instrument signed
by
Lenders holding a majority of the principal amount of the Note and the
Company. Any amendment, waiver, discharge or termination so made or
effected shall be binding upon all of the Holders.
Section 13.3 Successors
and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the permitted
successors and assigns, heirs, executors, and administrators of the Company
and
the Holder.
Section 13.4 Severability.
Whenever possible, each provision of this Warrant will be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any
other
jurisdiction, but this Warrant will be reformed, construed and enforced in
such
jurisdiction to the greatest extent possible to carry out the intentions
of the
parties hereto.
Section 13.5 Registration
Rights. Subject to receipt of necessary information from
Investment Manager and Lender, the Company will within 60 days following
the
date hereof, take all actions necessary to grant to Holder registration rights
on parity with the registration rights of the holders of the Company’s preferred
stock, including without limitation, preparing and filing with the Securities
and Exchange Commission a Registration Statement on Form S-3, or any equivalent
form for registration in accordance with the Act, to permit a public offering
and resale of the Shares underlying this Warrant under the Act on a continuous
basis under Rule 415 thereof. The Company acknowledges that the plan
of distribution contemplated by such Registration Statement shall include
offers
and sales through underwriters or agents, offers and sales directly to
investors, block trades and such other methods of offer and sale as Investment
Manager shall request. The Company will cause such Registration Statement
to
remain effective until such time as all of such Shares are sold or the holders
thereof are entitled to rely on Rule 144(k) for sales of such shares without
registration under the Act and without
7
compliance
with the public information, sales volume, manner of sale or notice requirements
of Rule 144(c), (e), (f) or (h).
Section 13.6 Notices,
etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, by overnight courier, or otherwise delivered by hand
or
by messenger or sent by facsimile and confirmed by mail, addressed:
(i) if
to the Company, to MTM Technologies, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer; and
(ii) if
to the Holder, at the address of such Holder set forth on the signature page
of
this Warrant.
All
notices shall be effective upon receipt.
Section 13.7 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
Section 13.8 Titles
and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing
or
interpreting this Agreement.
8
IN
WITNESS WHEREOF, the undersigned have executed this Warrant as of the date
first
above written.
By: /s/
Name:
Title:
WARRANT
HOLDER:
NATIONAL
ELECTRICAL BENEFIT FUND
By: Columbia
Partners, L.L.C. Investment Management,
as
Investment Manager
By: /s/
Name:
Title:
THE
EXERCISE OF THIS WARRANT IS SUBJECT TO THE APPLICABLE
PROVISIONS
OF THE ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST
IMPROVEMENTS
ACT OF 1976, AS AMENDED
EXHIBIT
A-1
NOTICE
OF EXERCISE
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention:
Chief Executive
Officer
1. The
undersigned hereby elects to purchase _________ shares of Common Stock, par
value $.001 per share, of MTM TECHNOLOGIES, INC. pursuant to the terms of
this
Warrant, and tenders herewith payment of the purchase price of such shares
in
full.
2. Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
______________________________
(Name)
______________________________
______________________________
(Address)
____________________________________
(Signature)
(Signature)
Title:_______________________________
________________________
(Date)
A-1
THE
EXERCISE OF THIS WARRANT IS SUBJECT TO THE APPLICABLE
PROVISIONS
OF THE ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST
IMPROVEMENTS
ACT OF 1976, AS AMENDED
EXHIBIT
A-2
NET
ISSUE NOTICE OF EXERCISE
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention:
Chief Executive
Officer
1. The
undersigned
hereby elects to purchase _________ shares of Common Stock, par value $.001
per
share, of MTM TECHNOLOGIES, INC. pursuant to the terms of this Warrant, and
hereby elects under Section 4.2 of this Warrant to surrender the right to
purchase _______ shares of Common Stock pursuant to this Warrant for a net
issue
exercise with respect to ________ shares of Common Stock.
2. Please
issue a
certificate or certificates representing said shares of Common Stock in the
name
of the undersigned or in such other name as is specified below:
______________________________
(Name)
______________________________
______________________________
(Address)
____________________________________
(Signature)
(Signature)
Title:_______________________________
________________________
(Date)
A-2
EXHIBIT
B
ASSIGNMENT
FORM
(To
be
signed only upon transfer of Warrant)
FOR
VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
______________________________, whose address is _____________________, the
right represented by the attached Warrant to purchase _________ shares of
Common
Stock of MTM TECHNOLOGIES, INC., to which the attached Warrant
relates.
Dated:____________________
___________________________________________
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)
___________________________________________
(Address)
Signed
in
the presence of:
_____________________________
B-1