AMENDMENT NUMBER 1
TO
WARRANT
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THIS IS AMENDMENT NUMBER 1 ("this Amendment") that is being executed
and delivered by and between Global Capital Funding Group, L.P., a Delaware
limited partnership ("GCFG") and PCS Research Technology, Inc., formerly named
Direct Placement, Inc., a Delaware corporation (the "Company"), and dated
effective as of February 28, 2003 in order to amend that certain Warrant to
purchase 125,000 shares of the Company's Common Stock dated December 14, 2001
(the "Warrant") and by which GCFG and the Company, in consideration of the
mutual promises contained in the Warrant and in this Amendment and other good
and valuable consideration (the sufficiency, mutuality and adequacy of which are
hereby acknowledged), hereby agree as follows:
1. Amendment to Exercise Price. The Exercise Price, as such term is
defined in the Warrant shall be $0.086.
2. Registration Rights. Section 13 of the Warrant shall be deleted in
its entirety.
3. Amendment to Section 2, Exercise of Warrant. Section 2.1 of the
Warrant shall be deleted in its entirety and shall be replaced with the
following text:
"(a) This warrant may be exercised in whole or in part (but not
as to a fractional share of Common Stock), at any time and from time to
time during the Exercise Period by the Holder hereof by delivery of a
notice of exercise (a "Notice of Exercise") substantially in the form
attached hereto as Exhibit A via facsimile to the Company. Promptly
thereafter the Holder shall surrender this Warrant to the Company at
its principal office, accompanied by payment of the Purchase Price
multiplied by the number of shares of Common Stock for which this
Warrant is being exercised (the "Exercise Price"). Payment of the
Exercise Price shall be made, at the option of the Holder, (i) by check
or bank draft payable to the order of the Company, or (ii) by wire
transfer to the account of the Company.
(b) In addition to the foregoing, at the option of Holder,
this Warrant may be exercised, at any time or from time to time, in the
following "cashless exercise" transactions:
(i) Upon written notice of exercise from the Holder to
the Company that the Holder is exercising this Warrant in whole
or in part and as consideration of such exercise is authorizing
the Company to withhold from issuance a number of shares of
Common Stock issuable upon exercise of this Warrant, the Company
shall deliver to the Holder (without payment by the Holder of the
aggregate Purchase Price) that number of shares of Common Stock
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equal to the quotient obtained by dividing (x) the Spread Value
by (y) the Fair Market Value of one share of Common Stock
immediately prior to the exercise of the Conversion Right. The
shares withheld by the Company shall no longer be issuable under
this Warrant.
(ii) Fair Market Value of a share of Warrant Shares as
of a particular date (the "Determination Date") shall mean:
(A) If the Warrant Shares are traded on an exchange
or are quoted on the Nasdaq National Market or the Nasdaq
SmallCap Market ("Nasdaq"), then the average of the
closing or last sale price, respectively, reported for the
five trading days immediately preceding the Determination
Date.
(B) If the Warrant Shares are not traded on an
exchange or on Nasdaq but are traded in the
over-the-counter market or other similar organization
(including the OTC Bulletin Board), then the average of
the closing bid and ask prices reported for the five
trading days immediately preceding the Determination Date.
(C) If the Warrant Shares are not traded as
provided above, then the price determined in good faith by
the Board of Directors of the Company, provided that (i)
the basis or bases of each such determination shall be set
forth in the corporate records of the Company pertaining
to meetings and other actions of such board, and (ii) such
records are available to the Holder for inspection during
normal business hours of the Company upon the giving of
reasonable prior notice.
(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 certificate of incorporation,
then all amounts to be payable per share to Holders of the
securities then comprising Warrant Shares 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 Warrant Shares in liquidation under the
certificate of incorporation, assuming for the purposes of
this clause (D) that all of the shares of Warrant Shares
then issuable upon exercise of all of the Warrants are
outstanding at the Determination Date.
(iii) The term "Spread Value" shall mean (i) the number
of shares exercised at a given time multiplied by the Fair Market
Value of one share of Common Stock, less (ii) aggregate
applicable Exercise Price.
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(c) Upon exercise, the Holder shall be entitled to receive,
promptly after payment in full, one or more certificates, issued in the
Holder's name or in such name or names as the Holder may direct,
subject to the limitations on transfer contained herein, for the number
of shares of Common Stock so purchased. The shares of Common Stock so
purchased shall be deemed to be issued as of the close of business on
the date on which the Company shall have received from the Holder
payment in full of the Exercise Price (the "Exercise Date").
(d) Notwithstanding anything to the contrary set forth herein,
upon exercise of all or a portion of this Warrant in accordance with
the terms hereof, the Holder shall not be required to physically
surrender this Warrant to the Company. Rather, records showing the
amount so exercised and the date of exercise shall be maintained on a
ledger substantially in the form of Annex B attached hereto (a copy of
which shall be delivered to the Company or transfer agent with each
Notice of Exercise). It is specifically contemplated that the Holder
hereof shall act as the calculation agent for all exercises of this
Warrant. In the event of any dispute or discrepancies, such records
maintained by the Holders shall be controlling and determinative in the
absence of manifest error. The Holder and any assignee, by acceptance
of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following an exercise of a portion of
this Warrant, the number of shares of Common Stock represented by this
Warrant will be the amount indicated on Annex B attached hereto (which
may be less than the amount stated on the face hereof)."
4. No Other Effect on the Warrant. Except as amended by this Amendment,
the Warrant remains in full force and effect.
5. Effective Date. This Amendment is effective February 28, 2003.
6. Miscellaneous.
(a) Captions; Certain Definitions. Titles and captions of or
in this Amendment are inserted only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this Amendment or
the intent of any of its provisions. The parties to this Amendment agree to all
definitions in this statement of the parties to this Amendment. A capitalized
term in this Amendment has the same meaning as it has as a capitalized term in
the Warrant unless the context clearly indicates to the contrary.
(b) Controlling Law. This Amendment is governed by, and shall
be construed and enforced in accordance with the laws of the State of Delaware
(except the laws of that jurisdiction that would render such choice of laws
ineffective).
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(c) Counterparts. This Amendment may be executed in one or
more counterparts (one counterpart reflecting the signatures of all parties),
each of which shall be deemed to be an original, and it shall not be necessary
in making proof of this Amendment or its terms to account for more than one of
such counterparts. This Amendment may be executed by each party upon a separate
copy, and one or more execution pages may be detached from a copy of this
Amendment and attached to another copy in order to form one or more
counterparts.
Signature Page Follows
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DULY EXECUTED and delivered by GCFG and the Company, on February 28,
2003 effective as set forth above.
GCFG: Global Capital Funding Group, L.P..
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By: Global Capital Management Services, Inc.,
its General Partner
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: President
Company: PCS Research Technology, Inc.
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By: /s/ XXXXX XXXXXXXXXX
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Name: Xxxxx Xxxxxxxxxx
Title:
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