AMENDMENT NO. 3 TO THE WARRANT AGREEMENT OF NETWORK 1 FINANCIAL GROUP, INC.
AMENDMENT
NO. 3
TO
THE WARRANT AGREEMENT
This
Amendment, is effective as of the 8th day of April, 2010 by and among Network 1
Financial Group, Inc., formerly known as International Smart Sourcing, Inc. (the
“Company”); Network 1 Financial Securities, Inc. (“Network 1 Financial” or
“Representative”) and Continental Stock Transfer & Trust Company, as warrant
agent (the “Warrant Agent”) (collectively, the “Parties”).
BACKGROUND
WHEREAS, the Company,
Representative, and Warrant Agent entered into a Warrant Agreement dated April
23, 1999, which agreement was subsequently amended on April 12, 2005 and
December 4, 2006 (the “Warrant Agreement”), in connection with the sale of
common stock purchase warrants (the “Warrants”) in the Company’s initial public
offering of its common stock in 1999; and
WHEREAS, the Company
previously determined that it was in its best interest to extend the expiration
date for its Warrants from April 23, 2007 until April 23, 2010; and
WHEREAS, the Company has
determined that it is in its best interest to further extend the expiration date
for its Warrants by eighteen months, from April 23, 2010 until October 23, 2011;
and
WHEREAS, the Company desires
to amend the Warrant Agreement pursuant to Section 19 thereof and has determined
that such amendment will not materially adversely affect the interests of the
holders of the Warrants;
NOW, THEREFORE, the Parties
hereto agree as follows:
1. Capitalized
terms not defined herein shall have the respective meanings ascribed to them in
the Warrant Agreement except to the extent modified below.
2. Section
2(b) of the Warrant Agreement is hereby amended to read in its entirety as
follows:
“(b) Each
Warrant shall entitle the registered holder thereof to purchase 5.1546378 shares
of Common Stock at a purchase price of $1.03092756 (as adjusted as hereinafter
provided, the “Exercise Price”), at any time during the ten-year period (the
“Exercise Period”) commencing on April 23, 2000 (the one year anniversary of the
date the Securities and Exchange Commission declared the Company’s registration
statement on Form SB-2 (File No. 333-48701) (the “Registration Statement”)
therein registering the Warrants and shares of Common Stock, including shares of
Common Stock issuable upon the exercise of the Warrants, to be effective (the
“Effective Date”)) and expiring at 5:00 p.m. New York City time, on October 23,
2011 (the “Expiration Date”). The Exercise Price and the number of shares
of Common Stock issuable upon exercise of the Warrants are subject to adjustment
upon the occurrence of certain events, all as hereinafter provided. The
Warrants shall be executed in compliance with applicable state law on behalf of
the Company by the manual or facsimile signature of the present or any future
Chairman of the Board or Vice Chairman, Chief Executive Officer, President or
Vice President of the Company, and attested to by the manual or facsimile
signature of the present or any future Secretary, Treasurer, or Assistant
Secretary or Assistant Treasurer of the Company, and shall have imprinted
thereon a facsimile of the Company’s seal.”
3. Except
as specifically amended above, the terms and conditions of the Agreement are
hereby ratified and confirmed and remain in full force and effect.
4. This
Amendment may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the
undersigned have caused this Amendment to be duly executed and delivered on the
date first above written.
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By:
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/s/
Xxxxxxx X. Xxxx
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Name:
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Xxxxxxx
X. Xxxx
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Title:
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Chief Executive Officer,
Vice-President and Chairman
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CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
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By:
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/s/
Xxxxxxx X. Xxxxxxxx
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Name:
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Xxxxxxx
X. Xxxxxxxx
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NETWORK
1 FINANCIAL SECURITIES, INC.
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By:
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/s/
Xxxxx Xxxxxxxxxx
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Name:
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Xxxxx
Xxxxxxxxxx
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Title:
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Senior
Vice
President
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