BROADPOINT SECURITIES GROUP, INC. Common Stock Purchase Warrant June 27, 2008
EXHIBIT
10.2
THIS
WARRANT, AND THE SHARES OF COMMON STOCK OF THE COMPANY ISSUABLE UPON EXERCISE OF
THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE, AND MAY NOT
BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE
ACT AND UNDER APPLICABLE STATE SECURITIES LAWS, OR UNLESS AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, IS OBTAINED TO THE EFFECT THAT SUCH
PLEDGE, SALE, ASSIGNMENT OR TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH STATE SECURITIES LAWS.
|
Void
After June 27, 2012
|
Right
to Purchase 1,000,000 (subject to the qualifications and adjustments set
forth herein) shares of Common Stock of Broadpoint Securities
Group, Inc.
|
Common
Stock Purchase Warrant
June
27, 2008
Broadpoint Securities Group, Inc., a
New York corporation (the “Company”), hereby
certifies that for good and valuable consideration, MAST CREDIT OPPORTUNITIES I
MASTER FUND LIMITED and its successors and assigns (the “Holder”), is entitled
to subscribe for and purchase from the Company an aggregate of One Million
(1,000,000) validly issued, fully paid and nonassessable shares of Common Stock,
par value $0.01 per share, of the Company (“Common Stock”) at a
purchase price per share equal to $3.00 (the “Exercise Price”), all
subject to the terms, conditions and adjustments as hereinafter
provided. The Exercise Price shall be subject to adjustment from time
to time pursuant to the provisions of Section 8 hereof.
This Warrant is issued pursuant to, and
in accordance with, the Preferred Stock Purchase Agreement dated as of the date
hereof by and between the Company and Holder (the “Purchase Agreement”)
and is subject to the terms thereof.
Section
1. Definitions. Unless
otherwise defined herein, capitalized terms shall have the meaning given to them
in the Purchase Agreement. As used herein, the following terms shall
have the following meanings, unless the context otherwise requires:
(a) “Current Market Price”
means, as of the date of determination, (a) the average of the daily Fair Market
Value under clause (i) or (ii) of the definition thereof of the Common Stock
during the immediately preceding thirty (30) trading days ending on such date,
and (b) if the Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, then the
Fair Market Value under clause (iii) of the definition thereof on such
date.
(b) “Fair Market Value”
shall mean, as of the date of determination: (i) if the Common Stock is listed
on a national securities exchange or admitted to unlisted trading privileges on
such exchange, the Fair Market Value shall be the last reported sale price of
the Common Stock on such exchange or market system on the last Business Day
prior to the date of exercise of this Warrant or, if no such sale is made on
such day, the average closing bid and asked price for such day on such exchange
or market system; (ii) if the Common Stock is not listed or admitted to unlisted
trading privileges, the Fair Market Value shall be the mean of the last reported
bid and asked prices reported by Pink Sheets or other similar over the counter
quotation service, on the last Business Day prior to the date of the exercise of
this Warrant; or (iii) if the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
Fair Market Value shall be an amount determined mutually by (x) a majority of
the members of the Board of Directors of the Company, and (y) the
Holder. If the Board of Directors and the Holder shall fail to agree
within five (5) Business Days, the Fair Market Value shall be an amount
determined, at the Company’s expense, by an independent nationally recognized
investment banking firm chosen by the Board of Directors and reasonably
acceptable to the Holder. Any determination of the Fair Market Value
by an appraiser shall be based on a valuation of the Company as an entirety
without regard to any discount for minority interests or disparate voting rights
among classes of Capital Stock.
(c) “Stock Equivalent”
means any security or obligation which is by its terms, directly or indirectly,
convertible into or exchangeable or exercisable for shares of Common Stock or
other Capital Stock of the Company, and any option, warrant or other
subscription or purchase right with respect to Common Stock or such other
Capital Stock.
(d) “Warrant Expiration
Date” shall mean 5:00 p.m., Eastern Time, on June 27, 2012; provided,
that, if such date is not a Business Day, the next Business Day immediately
thereafter.
Section
2. Transfers. This
Warrant and the shares of Common Stock issuable upon exercise of this Warrant
may not be transferred or assigned in whole or in part without compliance with
applicable federal and state securities laws by the transferor and the
transferee; provided, however, that this Warrant may not be sold, assigned,
transferred or otherwise disposed of unless each such sale, assignment, transfer
or disposition is of a minimum of 300,000 shares of the Common Stock issuable
hereunder (or, if the aggregate number of shares issuable hereunder is less than
300,000 shares of Common Stock, then no less than 100% of the remaining shares
of Common Stock issuable hereunder shall be included in such sale, assignment,
transfer or disposition). The Company shall not require Holder to
provide an opinion of counsel if the transfer is to an Affiliate of Holder,
provided that any such transferee is an “accredited investor” as defined in
Regulation D promulgated under the Securities Act.
Section
3. Exercise of
Warrant.
3.1 Manner of
Exercise. Subject to the terms and conditions set forth
herein, this Warrant may be exercised, in whole or in part (but not as to a
fractional share of Common Stock), by the Holder at any time or from time to
time, on any Business Day on or prior to the Warrant Expiration Date by (i) the
surrender of this Warrant and a duly executed exercise form in the form attached
as Exhibit A hereto (an “Exercise Form”) to
the Company at its office at Xxx Xxxx Xxxxx, 00xx Floor
New York,
New York 10119, or at such other office as the Company may designate by notice
in writing, and (ii) the delivery of payment to the Company by cash, check made
payable to the order of the Company, wire transfer of funds to a bank account
designated by the Company or any other means approved by the Company, an amount
equal to the aggregate Exercise Price for all shares of Common Stock as to which
this Warrant is exercised. In lieu of payment of the aggregate
Exercise Price, the Holder holder may from time to time convert this Warrant, in
whole or in part, into a number of shares of Common Stock determined by using
the following net issuance formula:
X=((P)(A-B))/A
where
| X= | the number of shares of Common Stock to be issued to the holder for theportion of this Warrant being exercised; | |
|
|
P=
|
the
number of shares of common stock purchasable under this Warrant or, if
only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised, at the date of calculation;
|
| A= | the Fair Market Value of one share of Common Stock as of the exercisedate; and | |
| B = | the Exercise Price as in effect on the exercise date. |
3.2 Issuance of Common
Stock. Upon receipt of the documents and payments described in
Section 3.1 hereof, the Company shall, within five (5) Business Days, execute or
cause to be executed, and deliver to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with an amount in cash in lieu of any fraction of a
share, as hereinafter provided. The stock certificate or certificates
so delivered shall be in the denomination specified in the Exercise Form and
shall be registered in the name of the holder hereof. This Warrant
shall be deemed to have been exercised and a certificate or certificates for
shares of Common Stock shall be deemed to have been issued, and the Holder or
its permitted designee (as specified in the Exercise Form) shall be deemed to
have become a holder of such shares for all purposes as of the close of business
on the date on which this Warrant and the documents and payments described in
Section 3.1 hereof, are received by the Company as aforesaid. Unless
this Warrant has expired or all of the purchase rights represented hereby have
been exercised, the Company shall, at the time of delivery of said certificate
or certificates, deliver to the Holder or its designee (as specified in the
Exercise Form) a new Warrant evidencing the rights of such holder to purchase
the unpurchased shares of Common Stock called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
Section
4. Compliance with the
Securities Act/Removal of Legend.
(a) Subject
to Section 4(b), the Company may cause the legend set forth on the first page of
this Warrant to be set forth on each Warrant or similar legend on any security
issued or issuable upon exercise of this Warrant, unless counsel for the Company
is of the opinion as to any such security that such legend is
unnecessary.
(b) The
Holder may require the Company to issue a Warrant or a certificate for shares of
Common Stock, in each case without a legend, if either (i) such Warrant or such
shares of Common Stock, as the case may be, have been registered for resale
under the Securities Act, or (ii) such Warrant or shares of Common Stock have
been sold pursuant to Rule 144 (or any successor provision then in effect) under
the Securities Act.
Section
5. Payment of
Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of the shares of Common Stock issuable upon
the exercise of the Warrant; provided, however, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificates
for shares of Common Stock in a name other than that of the registered holder of
this Warrant in respect of which such shares are issued, and in such case, the
Company shall not be required to issue or deliver any certificate for shares of
Common Stock or any Warrant until the person requesting the same has paid to the
Company the amount of such tax or has established to the Company’s reasonable
satisfaction that such tax has been paid. The holder shall be
responsible for income taxes due under federal, state or other law, if any such
tax is due.
Section
6. Mutilated or Missing
Warrants. In case this Warrant shall be mutilated, lost,
stolen, or destroyed, the Company shall issue in exchange and substitution of
and upon cancellation of the mutilated Warrant, or in lieu of and substitution
for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for
the purchase of a like number of shares of Common Stock, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction of the Warrant, and with respect to a lost, stolen or destroyed
Warrant, indemnity reasonably satisfactory to the Company with respect
thereto.
Section
7. Reservation of Common
Stock. The Company hereby represents and warrants that there
have been reserved, and the Company shall at all applicable times keep reserved
until issued (if necessary) as contemplated by this Section 7, out of the
authorized and unissued shares of Common Stock, 100% of the number of shares
issuable upon exercise of the rights of purchase represented by this
Warrant. The Company agrees that all shares of Common Stock issued
upon due exercise of the Warrant shall be, at the time of delivery of the
certificates for such shares of Common Stock, duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock of the
Company.
Section
8. Adjustments. Subject
and pursuant to the provisions of this Section 8, the Exercise Price and number
of shares of Common Stock subject to this Warrant shall be subject to adjustment
from time to time as set forth hereinafter.
8.1 Dividend, Subdivision or
Combination of Common Stock. If the Company at any time or
from time to time, after the issuance of this Warrant but prior to the exercise
thereof subdivides (by any stock split, stock dividend, recapitalization or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, and if the Company at any time combines (by reverse stock split,
recapitalization or otherwise) its outstanding shares of Common Stock into a
smaller number of shares, then, and in each such case, (i) the aggregate number
of shares of Common Stock for which this Warrant is exercisable (the “Warrant Share
Number”) immediately prior to such event shall be adjusted (and any other
appropriate actions shall be taken by the Company) so that the Holder shall be
entitled to receive upon exercise of this Warrant the number of shares of Common
Stock or other securities of the Company that it would have owned or would have
been entitled to receive upon or by reason of any of the events described above,
had this Warrant been exercised immediately prior to the occurrence of such
event and (ii) the Exercise Price payable upon the exercise of this Warrant
shall be adjusted by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of shares
of Common Stock issuable upon the exercise of this Warrant immediately prior to
such adjustment, and the denominator of which shall be the number of shares of
Common Stock issuable immediately thereafter. An adjustment made
pursuant to this Section 8.1 shall become effective retroactively (x) in the
case of any such dividend or distribution, to a date immediately following the
close of business on the record date for the determination of holders of shares
of Common Stock entitled to receive such dividend or distribution or (y) in the
case of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes
effective.
8.2 Issuance of Common Stock or
Stock Equivalents Below Exercise Price and/or Current Market
Price.
(a) If
the Company shall at any time or from time to time, after the issuance of this
Warrant but prior to the exercise hereof, issue or sell (such issuance or sale,
a “New
Issuance”) any shares of Common Stock or Stock Equivalents at a price per
share of Common Stock that is less than the Exercise Price then in effect as of
the record date or Issue Date (as defined below), as the case may be (the “Relevant Date”)
(treating the price per share of Common Stock, in the case of the issuance of
any Stock Equivalent, as equal to (x) the sum of the price for such Stock
Equivalent plus any additional consideration payable (without regard to any anti
dilution adjustments) upon the conversion, exchange or exercise of such Stock
Equivalent divided by (y) the number of shares of Common Stock initially
underlying such Stock Equivalent), other than issuances or sales for which an
adjustment is made pursuant to another subsection of this Section 8.2 and other
than Excepted Issuances (as hereinafter defined), then, and in each such case,
(A) the Exercise Price then in effect shall be adjusted by multiplying the
Exercise Price in effect on the Relevant Date by a fraction (I) the numerator of
which shall be the sum of the number of shares of Common Stock outstanding on
the Relevant Date plus the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such additional
shares of Common Stock so issued would purchase at the Exercise Price in effect
on the Relevant Date (or, in the case of Stock Equivalents, the number of shares
of Common Stock which the aggregate consideration received by the Company upon
the issuance of such Stock Equivalents and receivable by the Company upon the
conversion, exchange or exercise of such Stock Equivalents would purchase at the
Exercise Price on the Relevant Date) and (II) the denominator of which shall be
the sum of the number of shares of Common Stock outstanding on the Relevant Date
plus the number of additional shares of Common Stock issued or to be issued (or,
in the case of Stock Equivalents, the maximum number of shares of Common Stock
into which such Stock Equivalents initially may convert, exchange or be
exercised), calculated to the nearest cent, and (B) the Warrant Share Number
shall be increased to equal the product of (I) the aggregate number of shares of
Common Stock for which this Warrant is exercisable immediately prior to the New
Issuance multiplied by (II) a fraction, the numerator of which shall be the
Exercise Price in effect on the Relevant Date and the denominator of which shall
be the Exercise Price in effect immediately after such adjustment.
(b) If
the Company shall at any time or from time to time, after the issuance of this
Warrant but prior to the exercise hereof, issue or sell any shares of Common
Stock or Stock Equivalents at a price per share of Common Stock that is less
than the Current Market Price then in effect as of the Relevant Date (treating
the price per share of Common Stock, in the case of the issuance of any Stock
Equivalent, as equal to (x) the sum of the price for such Stock Equivalent plus
any additional consideration payable (without regard to any anti dilution
adjustments) upon the conversion, exchange or exercise of such Stock Equivalent
divided by (y) the number of shares of Common Stock initially underlying such
Stock Equivalent), other than issuances or sales for which an adjustment is made
pursuant to another subsection of this Section 8.2 and other than Excepted
Issuances (as hereinafter defined), then, and in each such case, (A) the
Exercise Price then in effect shall be adjusted by multiplying the Exercise
Price in effect on the Relevant Date by a fraction (I) the numerator of which
shall be the sum of the number of shares of Common Stock outstanding on the
Relevant Date plus the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such additional
shares of Common Stock so issued would purchase at the Current Market Price in
effect on the Relevant Date (or, in the case of Stock Equivalents, the number of
shares of Common Stock which the aggregate consideration received by the Company
upon the issuance of such Stock Equivalents and receivable by the Company upon
the conversion, exchange or exercise of such Stock Equivalents would purchase at
the Current Market Price on the Relevant Date) and (II) the denominator of which
shall be the sum of the number of shares of Common Stock outstanding on the
Relevant Date plus the number of additional shares of Common Stock issued or to
be issued (or, in the case of Stock Equivalents, the maximum number of shares of
Common Stock into which such Stock Equivalents initially may convert, exchange
or be exercised), calculated to the nearest cent, and (B) the Warrant Share
Number shall be increased to equal the product of (I) the aggregate number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the New Issuance multiplied by (II) a fraction, the numerator of which shall
be the Exercise Price in effect on the Relevant Date and the denominator of
which shall be the Exercise Price in effect immediately after such
adjustment.
(c) If
the Company shall at any time or from time to time, after the issuance of this
Warrant but prior to the exercise hereof, issue or sell any shares of Common
Stock or Stock Equivalents at a price per share of Common Stock that is less
than both the Exercise Price and Current Market Price then in effect as of the
Relevant Date, other than issuances or sales for which an adjustment is made
pursuant to another subsection of this Section 8.2 and other than Excepted
Issuances, then, and in each such case, (A) the Exercise Price then in effect
shall be adjusted in accordance with (i) Section 8.2(a) if the Current Market
Price in effect as of the Relevant Date is less than the Exercise Price in
effect as of the Relevant date, or (ii) Section 8.2(b) if the Exercise Price in
effect as of the Relevant Date is less than the Current Market Price in effect
as of the Relevant Date and (B) the Warrant Share Number shall be increased to
equal the product of (I) the aggregate number of shares of Common Stock for
which this Warrant is exercisable immediately prior to the New Issuance
multiplied by (II) a fraction, the numerator of which shall be the Exercise
Price in effect on the Relevant Date and the denominator of which shall be the
Exercise Price in effect immediately after such adjustment.
(d) Such
adjustment shall be made whenever such shares of Common Stock or Stock
Equivalents are issued, and shall become effective retroactively (x) in the case
of an issuance to the stockholders of the Company, as such, to a date
immediately following the close of business on the record date for the
determination of shareholders entitled to receive such shares of Common Stock or
Stock Equivalents and (y) in all other cases, on the date (the “Issue Date”) of such
issuance; provided, however, that the determination as to whether an adjustment
is required to be made pursuant to this Section 8.2(d) shall be made only upon
the issuance of such shares of Common Stock or Stock Equivalents, and not as a
result of the issuance of any security into which the Stock Equivalents convert,
exchange or may be exercised. Subject to Section 8.2(f), no further
adjustments to the Exercise Price shall be made upon the issuance of any such
security into which Stock Equivalents convert, exchange, or may be
exercised.
(e) In
case at any time any shares of Common Stock or Stock Equivalents or any rights
or options to purchase any shares of Common Stock or Stock Equivalents shall be
issued or sold for cash, the consideration received therefor shall be deemed to
be the amount received by the Company therefor, without deduction therefrom of
any expenses incurred or any underwriting commissions or concessions or
discounts paid or allowed by the Company in connection therewith. In
case any shares of Common Stock or Stock Equivalents or any rights or options to
purchase any Common Stock or Stock Equivalents shall be issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair market value of such
consideration, without deduction therefrom of any expenses incurred or any
underwriting commissions or concessions or discounts paid or allowed by the
Company in connection therewith, as determined mutually by (x) a majority of the
members of the Board of Directors of the Company and (y) the
Holder. If the Board of Directors and the Holder shall fail to agree
within five (5) Business Days, the fair market value shall be an amount
determined, at the Company’s expense, by an independent nationally recognized
investment banking firm chosen by the Board of Directors and reasonably
acceptable to the Holder, who shall make such determination as soon as
practicable and whose determination shall be binding. The cost of any
such investment banking firm shall be borne fifty percent (50%) by the Company
and fifty percent (50%) by the Holder.
(f) If
any Stock Equivalents (or any portions thereof) which shall have given rise to
an adjustment pursuant to this Section 8.2 shall have expired or terminated
without the exercise thereof and/or if by reason of the terms of such Stock
Equivalents there shall have been any increase or decrease, with the passage of
time or otherwise, in the price payable upon the exercise or conversion thereof
or, increase or decrease in the number of shares of Common Stock issuable upon
the exercise or conversion thereof, then the Exercise Price hereunder shall be
readjusted (but to no greater extent than originally adjusted) in order to (x)
eliminate from the computation any additional shares of Common Stock
corresponding to such Stock Equivalents as shall have expired or terminated, (y)
treat the additional shares of Common Stock, if any, actually issued or issuable
pursuant to the previous exercise of such Stock Equivalents as having been
issued for the consideration actually received and receivable therefor and (z)
treat any of such Stock Equivalents which remain outstanding as being subject to
exercise or conversion on the basis of such exercise or conversion price as
shall be in effect at the time. No readjustment pursuant to this
Section 8.2(f) shall have the effect of increasing the Exercise Price to an
amount which exceeds the lower of (a) the Exercise Price on the original
adjustment date, or (b) the Exercise Price that would have resulted from any
issuance of Common Stock or Stock Equivalents between the original adjustment
date and such readjustment date.
(g) For
purposes of this Warrant, the term “Excepted Issuances”
shall mean issuances by the Company of: (A) securities offered to the public
pursuant to a registration statement filed under the Securities Act; (B) all
shares of Common Stock (or options, warrants or other rights to purchase such
shares of Common Stock) issued or to be issued to officers, employees or
directors of, or consultants to, the Company pursuant to a stock purchase or
option plan or other employee stock bonus or purchase arrangement adopted by the
Company and approved by the affirmative approval of a majority of the Board of
Directors or any duly authorized committee thereof (collectively, the “Plans”); provided, however, that all
shares of Common Stock (or options, warrants or other rights to purchase such
shares of Common Stock) issued pursuant to the Plans are either exempt from, or
issued in compliance with the requirements of Section 409A of the U.S. Internal
Revenue Code of 1986, as amended, and the guidance thereunder; (C) securities
issued hereunder or upon the exercise of or conversion of any securities issued
hereunder, convertible securities, options or warrants issued and outstanding on
the date of this Warrant, provided that such securities have not been amended
since the date of this Warrant to increase the number of such securities or to
decrease the exercise or conversion price of any such securities; (D) securities
issued in connection with the acquisition of (i) another company by the Company
by merger or by purchase of a majority of the equity interests of such other
company or (ii) specified assets of another company, provided in each case that
any such transaction is approved by a majority of the Directors; or (E) shares
of Series B Redeemable Preferred Stock issued pursuant to the Purchase
Agreement.
8.3 Certain
Distributions. In case the Company shall at any time or from
time to time, after the issuance of this Warrant but prior to the exercise
hereof, distribute to all holders of shares of Common Stock (including any such
distribution made in connection with a merger or consolidation in which the
Company is the resulting or surviving entity and shares of Common Stock are not
changed or exchanged) cash, evidences of indebtedness of the Company or another
issuer, securities of the Company or another issuer or other assets (excluding
dividends or distributions payable in shares of Common Stock for which
adjustment is made under Section 8.1) or rights or warrants to subscribe for or
purchase any of the foregoing, then, and in each such case, (i) the Exercise
Price then in effect shall be adjusted (and any other appropriate actions shall
be taken by the Company) by being multiplied by the Exercise Price in effect
prior to the date of distribution by a fraction (x) the numerator of which shall
be the Current Market Price of Common Stock immediately prior to the date of
distribution less the then fair market value (as determined by the Board of
Directors in the exercise of their fiduciary duties) of the portion of the cash,
evidences of indebtedness, securities or other assets so distributed or of such
rights or warrants applicable to one share of Common Stock and (y) the
denominator of which shall be the Current Market Price of the Common Stock
immediately prior to the date of distribution (but such fraction shall not be
greater than one) and (ii) the Warrant Share Number shall be increased by being
multiplied by a fraction (x) the numerator of which shall be the Current Market
Price of one share of Common Stock immediately prior to the record date for the
distribution of such cash, evidences of indebtedness, securities, other assets
or rights or warrants and (y) the denominator of which shall be the Current
Market Price of one share of Common Stock immediately prior to such record date
less the fair market value (as determined by the Board of Directors in the
exercise of their fiduciary duties) of the portion of such cash, evidences of
indebtedness, securities, other assets or rights or warrants so
distributed. Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such
distribution.
8.4 Consolidation, Merger,
etc. If any (i) capital reorganization, (ii) reclassification,
(iii) consolidation, merger, tender offer or other business combination of the
Company with another entity that involves a transfer of more than fifty percent
(50%) of the voting power of the Company, (iv) the sale of all or substantially
all of the Company’s assets to another entity, or (v) voluntary sale,
conveyance, exchange or transfer of the voting Capital Stock of the Company that
involves the sale, conveyance, exchange or transfer of more than fifty percent
(50%) of the voting power of the Company (each, an “Extraordinary Event”)
shall be effected, then, prior to the consummation of such Extraordinary Event,
the Company shall make appropriate provision, including providing written notice
of the Extraordinary Event to the Holder at least ten (10) Business Days prior
to effecting such Extraordinary Event, to ensure that the Holder shall
thereafter have the right to purchase and receive, upon exercise hereof and the
payment of the Exercise Price, in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
this Warrant, such shares of stock, securities or property (including cash) as
may be issued or payable with respect to or in exchange for a number of shares
of Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of this Warrant had such Extraordinary Event not
taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of the Holder to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
Exercise Price and of the number of shares purchasable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be, in relation to any
shares of stock, securities or property thereafter deliverable upon the exercise
hereof. Each Holder agrees to keep all information it receives
regarding the Extraordinary Event confidential until such time as the Company
has disclosed such information publicly. The foregoing provisions shall
similarly apply to successive Extraordinary Events.
8.5 Other
Changes. In case the Company at any time or from time to time,
after the issuance of this Warrant but prior to the exercise hereof, shall take
any action affecting its Common Stock similar to or having an effect similar to
any of the actions described in any of Sections 8.1, 8.2, 8.3 or 8.4 (but not
including any action described in any such Section) and it would be equitable in
the circumstances to adjust the Exercise Price and Warrant Share Number as a
result of such action, then, and in each such case, the Exercise Price and
Warrant Share Number shall be adjusted in such manner and at such time as the
Board of Directors in good faith determines would be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the Holder).
8.6 No
Impairment. The Company shall not, by amendment of its
Certificate of Incorporation or through a 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 under this Warrant by the Company, but
shall at all times in good faith assist in carrying out of all the provisions of
this Warrant and in taking all such action as may be necessary or appropriate to
protect Holder's rights against impairment.
8.7 Fractional
Shares. No fractional Shares shall be issuable upon exercise
of the Warrant and the number of shares of Common Stock to be issued upon
exercise of the Warrant shall be rounded down to the nearest whole share of
Common Stock. If a fractional share interest arises upon any exercise
of the Warrant, the Company shall eliminate such fractional share interest by
paying Holder the amount computed by multiplying the fractional interest by the
Fair Market Value of a full share of Common Stock as of the exercise date over
the Exercise Price for such fractional share.
8.8 Certificate as to
Adjustments. Upon each adjustment of the Exercise Price,
and/or number of shares of Common Stock, the Company shall promptly notify
Holder in writing, and, at the Company’s expense, promptly compute such
adjustment, and furnish Holder with a certificate of its Chief Financial Officer
setting forth such adjustment and the facts upon which such adjustment is based.
The Company shall, upon written request, furnish Holder a certificate setting
forth the Exercise Price and number of shares of Common Stock in effect upon the
date thereof and the series of adjustments leading to such Exercise Price and
number of shares of Common Stock.
Section
9. Notices. Unless
otherwise provided, any notice required or permitted under this Warrant shall be
given in writing and shall be deemed effectively given as hereinafter described
(i) if given by personal delivery, then such notice shall be deemed given upon
such delivery, (ii) if given by telex or facsimile, then such notice shall be
deemed given upon receipt of confirmation of complete transmittal, (iii) if
given by mail, then such notice shall be deemed given upon the earlier of (A)
receipt of such notice by the recipient or (B) five days after such notice is
deposited in first class mail, postage prepaid, and (iv) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one day after delivery to such carrier. All notices to
Holder shall be addressed as follows until the Company receives notice of a
change of address in connection with a transfer or otherwise:
If to Mast before September 15,
2008, at the following address:
MAST
Credit Opportunities I Master Fund Limited
c/o MAST
Capital Management, LLC
000
Xxxxxxxx Xxxxxx, Xxxxx 000
Boston,
Massachusetts 02116
Attention:
Xxxx X. Xxxxxxxx
Fax:
(000) 000-0000
If to Mast after September 15,
2008, at the following address:
MAST
Credit Opportunities I Master Fund Limited
c/o MAST
Capital Management, LLC
000
Xxxxxxxxx Xxxxxx, 00xx
Floor
Boston,
Massachusetts 02116
Attention:
Xxxx X. Xxxxxxxx
with a copy by fax or messenger or
courier to:
Xxxxx Xxxx LLP
Bay Colony Corporate
Center
0000 Xxxxxx Xxxxxx, Xxxxx
0000
Waltham, Massachusetts
02451
Attention: Xxxxx X. Xxxxxxxx,
Esq.
Fax: (000) 000-0000
Notice to
the Company shall be addressed as follows until Xxxxxx receives notice of a
change in address:
Xxx Xxxx
Xxxxx, 00xx
Floor
Fax: (000) 000-0000
Attention: General
Counsel
with a copy by fax or messenger or
courier to:
Xxxxxx/Wink LLP
0 Xxxx Xxxxx, 00xx xxxxx
New York, NY 10001
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxx,
Esq.
Section
10. Registration
Rights. The initial holder of this Warrant is entitled to the
benefit of certain registration rights with respect to the shares of Common
Stock issuable upon the exercise of this Warrant as provided in the Registration
Rights Agreement dated as of the date hereof, by and between the Holder and the
Company, and any subsequent holder hereof shall be entitled to such rights to
the extent provided in the Registration Rights Agreement.
Section
11. Successors. All
the covenants and provisions hereof by or for the benefit of the Holder shall
bind and inure to the benefit of its respective successors and assigns
hereunder.
Section
12. Governing
Law. This Warrant shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without regard to
the provisions thereof relating to conflict of laws.
Section
13. No Rights as
Shareholder. Prior to the exercise of this Warrant, the Holder
shall not have or exercise any voting rights or other rights as a shareholder of
the Company by virtue of its ownership of this Warrant.
Section
14. Amendments. This
Warrant shall not be amended without the prior written consent of the Company
and the Holder.
Section
15. Section
Headings. The section headings in this Warrant are for the
convenience of the Company and the Holder and in no way alter, modify, amend,
limit or restrict the provisions hereof.
[remainder
of this page intentionally left blank]
IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed, as of the 27th day of
June, 2008.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X.
Xxxxxx
Title: Chief
Financial
Officer
APPENDIX
A
WARRANT
EXERCISE FORM
The undersigned hereby irrevocably
elects to exercise the right of purchase represented by the within Warrant
(“Warrant”)
for, and to purchase thereunder by the payment of the Exercise Price and
surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”)
provided for therein, and requests that certificates for the Warrant Shares be
issued as follows:
_______________________________
Name
________________________________
Address
________________________________
________________________________
Federal Tax ID or Social Security
No.
and delivered by
q certified
mail to the above address, or
q electronically
(provide DWAC Instructions:___________________), or
q other
(specify: __________________________________________).
and, if
the number of Warrant Shares shall not be all the Warrant Shares purchasable
upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
Shares purchasable upon exercise of this Warrant be registered in the name of
the undersigned Holder or the undersigned’s Assignee as below indicated and
delivered to the address stated below.
Dated:
___________________, ____
Signature:______________________
______________________________
Name (please print)
______________________________
______________________________
Address
______________________________
Federal Identification or
Social Security No.
Assignee:
_______________________________
_______________________________
_______________________________
APPENDIX
B
NET ISSUE
ELECTION NOTICE
Date:_________________________
The undersigned hereby elects under
Section 3.1 of the Warrant to surrender the right to purchase ____________
shares of Common Stock pursuant to this Warrant and hereby requests the issuance
of _____________ shares of Common Stock. The certificate(s) for the
shares issuable upon such net issue election shall be issued in the name of the
undersigned or as otherwise indicated below.
_________________________________________
Signature
_________________________________________
Name for Registration
_________________________________________
Mailing Address
