Exhibit 4.1
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO FTS GROUP INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
Right to Purchase ________ shares of Common Stock of FTS Group Inc.
(subject to adjustment as provided herein)
CLASS A COMMON STOCK PURCHASE WARRANT
No. 2005-A-001 Issue Date: December ___, 2005
FTS GROUP INC., a corporation organized under the laws of the State of
Nevada (the "Company"), hereby certifies that, for value received, ALPHA CAPITAL
AKTIENGESELLSCHAFT, Xxxxxxxxx 0, 0000 Xxxxxxxxxxx, Vaduz, Lichtenstein, Fax:
000-00-00000000, or its assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company at any time after the Issue
Date until 5:00 p.m., E.S.T on the date that the Registration Statement (as
defined in the Subscription Agreement) has been effective for the unrestricted
public resale of the Warrant Shares for four (4) years (the "Expiration Date"),
up to ________ fully paid and nonassessable shares of Common Stock at a per
share purchase price of $______ [120% OF THE AVERAGE OF THE VOLUME WEIGHTED
AVERAGE PRICE (VWAP) OF THE COMMON STOCK AS REPORTED BY BLOOMBERG LP FOR THE OTC
BULLETIN BOARD ("BULLETIN BOARD") FOR THE FIVE TRADING DAYS PRECEDING THE
CLOSING DATE]. The aforedescribed purchase price per share, as adjusted from
time to time as herein provided, is referred to herein as the "Purchase Price."
The number and character of such shares of Common Stock and the Purchase Price
are subject to adjustment as provided herein. The Company may reduce the
Purchase Price without the consent of the Holder. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in that certain
Subscription Agreement (the "SUBSCRIPTION AGREEMENT"), dated December 29, 2005,
entered into by the Company and Holders of the Class A Warrants.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include FTS Group Inc. and any corporation
which shall succeed or assume the obligations of FTS Group Inc. hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock, $.001
par value per share, as authorized on the date of the Subscription Agreement,
and (b) any other securities into which or for which any of the securities
described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 or otherwise.
(d) The term "Warrant Shares" shall mean the Common Stock issuable upon
exercise of this Warrant.
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1. Exercise of Warrant.
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1.1. Number of Shares Issuable upon Exercise. From and after the Issue
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Date through and including the Expiration Date, the Holder hereof shall be
entitled to receive, upon exercise of this Warrant in whole in accordance with
the terms of subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.
1.2. Full Exercise. This Warrant may be exercised in full by the Holder
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hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the "Subscription Form") duly executed by such
Holder and surrender of the original Warrant within four (4) days of exercise,
to the Company at its principal office or at the office of its Warrant Agent (as
provided hereinafter), accompanied by payment, in cash, wire transfer or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock for which
this Warrant is then exercisable by the Purchase Price then in effect.
1.3. Partial Exercise. This Warrant may be exercised in part (but not for a
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fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on such
partial exercise shall be the amount obtained by multiplying (a) the number of
whole shares of Common Stock designated by the Holder in the Subscription Form
by (b) the Purchase Price then in effect. On any such partial exercise, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any applicable transfer
taxes) may request, the whole number of shares of Common Stock for which such
Warrant may still be exercised.
1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of a
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particular date (the "Determination Date") shall mean:
(a) If the Company's Common Stock is traded on an exchange or is quoted
on the National Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ"), National Market System, the NASDAQ SmallCap Market or the American
Stock Exchange, LLC, then the closing or last sale price, respectively, reported
for the last business day immediately preceding the Determination Date;
(b) If the Company's Common Stock is not traded on an exchange or on the
NASDAQ National Market System, the NASDAQ SmallCap Market or the American Stock
Exchange, Inc., but is traded in the over-the-counter market, then the average
of the closing bid and ask prices reported for the last business day immediately
preceding the Determination Date;
(c) Except as provided in clause (d) below, if the Company's Common Stock is
not publicly traded, then as the Holder and the Company agree, or in the absence
of such an agreement, by arbitration in accordance with the rules then standing
of the American Arbitration Association, before a single arbitrator to be chosen
from a panel of persons qualified by education and training to pass on the
matter to be decided; or
(d) If the Determination Date is the date of a liquidation, dissolution or
winding up, or any event deemed to be a liquidation, dissolution or winding up
pursuant to the Company's charter, then all amounts to be payable per share to
holders of the Common Stock pursuant to the charter in the event of such
liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
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1.5. Company Acknowledgment. The Company will, at the time of the
-----------------------
exercise of the Warrant, upon the request of the Holder hereof acknowledge in
writing its continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the Holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such Holder any such rights.
1.6. Trustee for Warrant Holders. In the event that a bank or trust company
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shall have been appointed as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and duties
of a warrant agent (as hereinafter described) and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this Section 1.
1.7 Delivery of Stock Certificates, etc. on Exercise. The Company
-------------------------------------------------
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within four (4) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
2. Cashless Exercise.
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(a) Payment upon exercise may be made at the option of the Holder
either in (i) cash, wire transfer or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Purchase Price,
(ii) by delivery of Common Stock issuable upon exercise of the Warrants in
accordance with Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per the terms of this
Warrant) and the holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.
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(b) If the Fair Market Value of one share of Common Stock is greater than
the Purchase Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
cancelled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Subscription Form in which event the Company
shall issue to the holder a number of shares of Common Stock computed using the
following formula:
X=Y (A-B)
-----
C
Where X= the number of shares of Common Stock to be issued to
the holder
Y= the number of shares of Common Stock purchasable under the Warrant or, if
only a portion of the Warrant is being exercised, the portion of the Warrant
being exercised (at the date of such calculation)
A= the highest Fair Market Value of one share of the Company's Common Stock
during the five trading days preceding the date of exercise
B= Purchase Price (as adjusted to the date of such calculation)
C= lowest Fair Market Value of one share of the Company's Common Stock
during the five trading days preceding the Closing Date
(c) The Holder may employ the cashless exercise feature described in Section
(b) above only during the pendency of a Non-Registration Event as described
in Section 11 of the Subscription Agreement.
For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Subscription
Agreement.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
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3.1. Reorganization, Consolidation, Merger, etc. In case at any time
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or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.
3.2. Dissolution. In the event of any dissolution of the Company following
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the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrants after the effective date of
such dissolution pursuant to this Section 3 to a bank or trust company (a
"Trustee") having its principal office in New York, NY, as trustee for the
Holder of the Warrants.
3.3. Continuation of Terms. Upon any reorganization, consolidation, merger
----------------------
or transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the Other Securities and property receivable on
the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4. In the event this Warrant does not continue in full
force and effect after the consummation of the transaction described in this
Section 3, then only in such event will the Company's securities and property
(including cash, where applicable) receivable by the Holder of the Warrants be
delivered to the Trustee as contemplated by Section 3.2.
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3.4 Share Issuance. Until the Expiration Date, if the Company shall
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issue any Common Stock except for the Excepted Issuances (as defined in the
Subscription Agreement), prior to the complete exercise of this Warrant for a
consideration less than the Purchase Price that would be in effect at the time
of such issue, then, and thereafter successively upon each such issue, the
Purchase Price shall be reduced to such other lower issue price. For purposes
of this adjustment, the issuance of any security or debt instrument of the
Company carrying the right to convert such security or debt instrument into
Common Stock or of any warrant, right or option to purchase Common Stock shall
result in an adjustment to the Purchase Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
at any time upon any subsequent issuances of shares of Common Stock upon
exercise of such conversion or purchase rights if such issuance is at a price
lower than the Purchase Price in effect upon such issuance. The reduction of
the Purchase Price described in this Section 3.4 is in addition to the other
rights of the Holder described in the Subscription Agreement.
4. Extraordinary Events Regarding Common Stock. In the event that the
--------------------------------------------
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4.
The number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.
5. Certificate as to Adjustments. In each case of any adjustment or
--------------------------------
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant and any
Warrant Agent of the Company (appointed pursuant to Section 11 hereof).
6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
-------------------------------------------------------------------------
Statements. The Company will at all times reserve and keep available, solely
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for issuance and delivery on the exercise of the Warrants, all shares of Common
Stock (or Other Securities) from time to time issuable on the exercise of the
Warrant subject to Section 9(r) of the Subscription Agreement. This Warrant
entitles the Holder hereof to receive copies of all financial and other
information distributed or required to be distributed to the holders of the
Company's Common Stock.
5
7. Assignment; Exchange of Warrant. Subject to compliance with applicable
---------------------------------
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the "Transferor Endorsement Form") and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company at its expense, twice, only, but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor. No such transfers shall result
in a public distribution of the Warrant.
8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
------------------------
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
9. Registration Rights. The Holder of this Warrant has been granted certain
-------------------
registration rights by the Company. These registration rights are set forth in
the Subscription Agreement. The terms of the Subscription Agreement are
incorporated herein by this reference.
10. Maximum Exercise. The Holder shall not be entitled to exercise this
-----------------
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by the Holder
and its affiliates of more than 4.99% of the outstanding shares of Common Stock
on such date. For the purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.
Subject to the foregoing, the Holder shall not be limited to aggregate exercises
which would result in the issuance of more than 4.99%. The restriction
described in this paragraph may be waived, in whole or in part, upon sixty-one
(61) days prior notice from the Holder to the Company. The Holder may allocate
which of the equity of the Company deemed beneficially owned by the Subscriber
shall be included in the 4.99% amount described above and which shall be
allocated to the excess above 4.99%. The Holder is solely responsible for
determining its beneficial ownership.
11. Call. The Company shall have the option to "call" the exercise of the
----
shares issuable upon exercise of this Warrant (the "Warrant Call") in accordance
with and governed by the following:
(a) The Company shall exercise the Warrant Call by giving to the
Warrant Holder a written notice of call (the "Call Notice") during the period in
which the Warrant Call may be exercised. The effective date of each Call Notice
(the "Call Date") is the date on which notice is effective under the notice
provision of Section 14 of this Warrant.
(b) The Company's right to exercise the Warrant Call shall commence thirty
trading days after the actual effective date of a Registration Statement
described in Section 11.1(iv) of the Subscription Agreement and end thirty
trading days prior to the Expiration Date.
(c) The number of shares of Common Stock to be issued upon exercise of
the Warrant which are subject to a Call Notice must be registered in a
Registration Statement effective from twenty (20) trading days prior to the Call
Date and through the date such Common Stock is actually delivered to the Warrant
Holder ("Delivery Date").
6
(d) A Call Notice may be given not sooner than fifteen trading days
after the prior Call Date.
(e) A Call Notice may be given by the Company in connection with
shares of Common Stock issuable upon exercise of the Warrant only within ten
days after the Common Stock has had a closing price as reported for the
Principal Market (as defined in the Subscription Agreement) of $0.08 or more for
thirty (30) consecutive trading days ("Lookback Period").
(f) The Common Stock must be listed on the Principal Market for the
Lookback Period and through the Delivery Date.
(g) The Company shall not have received a notice from the Principal Market
during the ninety calendar days prior to the Call Date that the Company or its
Common Stock does not meet the requirements for continued quotation, listing or
trading on the Principal Market.
(h) The Company and the Common Stock shall meet the requirements for
continued quotation, listing or trading on the Principal Market for the Lookback
Period and through the Delivery Date.
(i) Unless otherwise agreed to by the Holder of this Warrant, a Call Notice
must be given to all Warrant Holders who receive Warrants similar to this
Warrant (in terms of exercise price and other principal terms) issued on or
about the same Issue Date as this Warrant, in proportion to the amounts of
Common Stock which may be purchased by the respective Warrant Holders in
accordance with the respective Warrants held by each.
(j) The Warrant Holder shall exercise his Warrant rights and purchase the
Called Warrant Shares and pay for same within fourteen trading days after the
Call Date. If the Warrant Holder fails to timely pay the amount required by the
Warrant Call, the Company's sole remedy shall be to cancel a corresponding
amount of this Warrant.
(k) The Company may not exercise the right to Call this Warrant
after the occurrence of a default by the Company of a material term of this
Warrant or the Subscription Agreement or the Notes referred to in the
Subscription Agreement.
12. Warrant Agent. The Company may, by written notice to the Holder of the
--------------
Warrant, appoint an agent (a "Warrant Agent") for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to Section
1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.
13. Transfer on the Company's Books. Until this Warrant is transferred on
---------------------------------
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
14. Notices. All notices, demands, requests, consents, approvals, and
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other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company to: FTS Group Inc., 0000
Xxxx Xxxxxxxxxxxx Xxxxxx, Xxxxx, XX 00000, Attn: Xxxxx Xxxxxxxxx, CEO,
telecopier: (000) 000-0000, with a copy by telecopier only to: Xxx Xxxxxxx,
Esq., Xxxxxxx Business Law, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxxx, XX
00000, Fax: (000) 000-0000, and (ii) if to the Holder, to the address and
telecopier number listed on the first paragraph of this Warrant, with an
additional copy by telecopier only to: Grushko & Xxxxxxx, P.C., 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, telecopier number: (000) 000-0000.
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15. Miscellaneous. This Warrant and any term hereof may be changed,
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waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of New York. Any dispute relating to this Warrant shall be
adjudicated in New York County in the State of New York. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
FTS GROUP INC.
By:_______________
Name:
Title:
Witness:_______________
9
EXHIBIT A
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: FTS GROUP INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):
___ ________ shares of the Common Stock covered by such Warrant; or
___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):
___ $__________ in lawful money of the United States; and/or
___ the cancellation of such portion of the attached Warrant as is
exercisable for a total of _______ shares of Common Stock (using a Fair Market
Value of $_______ per share for purposes of this calculation); and/or
___ the cancellation of such number of shares of Common Stock as is
necessary, in accordance with the formula set forth in Section 2, to exercise
this Warrant with respect to the maximum number of shares of Common Stock
purchasable pursuant to the cashless exercise procedure set forth in Section 2.
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to _____________________________________________________
whose address is
________________________________________________________________________________
Number of Shares of Common Stock Beneficially Owned on the date of exercise:
Less than five percent (5%) of the outstanding Common Stock of FTS Group Inc
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.
Dated:___________________
____________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
____________________________________________
(Address)
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EXHIBIT B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of FTS GROUP INC. to which the within Warrant relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of FTS GROUP INC.
with full power of substitution in the premises.
Transferees Percentage Transferred Number Transferred
----------- ----------------------- -------------------
Dated: ______________, _______________________________________________________
(Signature must conform to name of holder
as specified on the face of the warrant)
Signed in the presence of:
_______________________ _______________________________
(Name) (address)
ACCEPTED AND AGREED:
[TRANSFEREE]
_______________________ _______________________________
(Name) (address)
