EXHIBIT 10.3
WARRANT
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR
OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION, QUALIFICATION
OR OTHER SUCH ACTIONS ARE NOT REQUIRED UNDER SAID ACT. THE OFFERING OF THIS
SECURITY HAS NOT BEEN REVIEWED OR APPROVED BY ANY STATE'S SECURITIES
ADMINISTRATOR.
No. 1
Dated: August 20, 2002
WARRANT
To Purchase up to 7,500,000 Shares of Common Stock
EXPIRING AUGUST 20, 2005
THIS IS TO CERTIFY THAT, for value received, DynCorp, or registered
assigns (the "HOLDER") is entitled to purchase from DynTek, a Delaware
corporation (the "COMPANY"), at any time or from time to time prior to 5:00
p.m., New York City time, on August 20, 2005 at the place where a Warrant Agency
(as hereinafter defined) is located, at the Exercise Price (as hereinafter
defined), the number of shares of Common Stock, par value $0.0001 per share (the
"COMMON STOCK"), of the Company shown above, all subject to adjustment and upon
the terms and conditions as hereinafter provided, and is entitled also to
exercise the other rights, powers and privileges hereinafter described. This
Warrant is one of one or more warrants (the "WARRANTS") of the same form and
having the same terms as this Warrant.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1. METHOD OF EXERCISE.
------------------
(a) To exercise this Warrant in whole or in part, the Holder shall
deliver to the Company, at the Warrant Agency, (A) this
Warrant, (B) a written notice, in substantially the form of
the Subscription Notice attached hereto, of such Holder's
election to exercise this Warrant, which notice shall specify
the number of shares of Common Stock to be purchased, the
denominations of the share certificate or certificates desired
and the name or names in which such certificates are to be
registered, and (C) payment (in the manner described in
paragraph (b) below) of the Exercise Price with respect to
such shares. Notwithstanding the foregoing, this Warrant shall
be exercisable only to the extent and at the time or times
that the Holder could legally take possession and title of
such shares.
(b) Payment of the Exercise Price may be made, at the option of
the Holder, by: (x) cash, money order, certified or bank
cashier's check or wire transfer, (y) the surrender to the
Company of securities of the Company having a value equal to
the aggregate Exercise Price, as determined in good faith by
the Company's board of directors, or (z) the delivery of a
notice to the Company that the Holder is exercising this
Warrant by authorizing the Company to reduce the number of
shares of Common Stock subject to this Warrant by the number
of shares that would otherwise have been deliverable upon
exercise of this Warrant, having an aggregate value equal to
the aggregate Exercise Price for all of the shares of Common
Stock subject to this Warrant, as determined in good faith by
the Company's board of directors. In the event the Holder
-2-
intends to pay the Exercise Price of this Warrant as permitted
under clause (y) or (z) of the preceding sentence, the Holder
shall give the Company 10 days prior written notice of such
intention and the Company shall advise the Holder within 5
days of receipt of such notice of the value of such Company
securities (in the case of clause (y)) or Common Stock (in the
case of clause (z)).
(c) The Company shall, as promptly as practicable and in any event
within five Business Days after exercise, execute and deliver
or cause to be executed and delivered, in accordance with such
notice, a certificate or certificates representing the
aggregate number and type of shares of Common Stock specified
in said notice. The share certificate or certificates so
delivered shall be in such denominations as may be specified
in such notice or, if such notice shall not specify
denominations, shall be in the amount of the number of shares
of Common Stock for which the Warrant is being exercised, and
shall be issued in the name of the Holder or such other name
or names as shall be designated in such notice, subject to
Section 1.4. Such certificate or certificates shall be deemed
to have been issued, and such Holder or any other Person so
designated to be named therein shall be deemed for all
purposes to have become a holder of record of such shares, as
of the date the aforementioned notice is received by the
Company.
(d) If this Warrant shall have been exercised only in part, the
Company shall, at the time of delivery of the certificate or
certificates, deliver to the Holder a new Warrant evidencing
the rights to purchase the remaining shares of Common Stock
called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the
request of the Holder, appropriate notation may be made on
this Warrant which shall then be returned to the Holder. The
Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, issuance and
delivery of share certificates and new Warrants, except that,
if share certificates or new Warrants shall be registered in a
name or names other than the name of the Holder, funds
sufficient to pay all transfer taxes payable as a result of
such transfer shall be paid by the Holder at the time of
delivering the aforementioned notice of exercise or promptly
upon receipt of a written request of the Company for payment.
1.2. SHARES TO BE FULLY PAID AND NONASSESSABLE. All shares of Common Stock
issued upon the exercise of this Warrant shall be validly issued, fully
paid and nonassessable and free from all preemptive rights of any
stockholder, and from all taxes, liens and charges with respect to the
issue thereof (other than transfer taxes), and the Company shall use
its best efforts to register such shares of Common Stock under the
Securities Act, and list the same for trading on Nasdaq, at its
earliest opportunity following December 27, 2002 and maintain such
registration and listing for so long as this Warrant is outstanding.
1.3. NO FRACTIONAL SHARES TO BE ISSUED. The Company shall not be required to
issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section 1.3, be
issuable upon any exercise of this Warrant, and if the Company shall
have elected not to issue such fraction of a share, in lieu of such
-3-
fractional share the Company shall pay to the Holder, in cash, an
amount equal to such fraction of the Fair Market Value per share of
outstanding Common Stock of the Company on the Business Day immediately
prior to the date of such exercise.
1.4. SHARE LEGEND. Each certificate for shares of Common Stock issued upon
exercise of this Warrant, unless at the time of exercise such shares
are registered under the Securities Act, shall bear the following
legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT REQUIRED
UNDER SAID ACT. THE OFFERING OF THIS SECURITY HAS NOT BEEN REVIEWED OR
APPROVED BY ANY STATE SECURITIES ADMINISTRATOR."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless, in the opinion of counsel
selected by the holder of such certificate (who may be an employee of such
Holder) reasonably satisfactory to the Company, the securities represented
thereby are no longer subject to restrictions on resale under the Securities
Act.
1.5. RESERVATION; AUTHORIZATION. The Company has reserved and will keep
available for issuance upon exercise of the Warrants the total number
of shares of Common Stock deliverable upon exercise of all Warrants
from time to time outstanding. The issuance of such shares has been
duly and validly authorized and, when issued and sold in accordance
with the Warrants, such shares will be duly and validly issued, fully
paid and nonassessable.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1. WARRANT AGENCY. If the Requisite Holders shall request appointment of
an independent warrant agency with respect to the Warrants, the Company
shall promptly appoint and thereafter maintain, at its own expense, an
agency, which agency may be the Company's then existing transfer agent
(the "Warrant Agency"), for certain purposes specified herein, and
shall give prompt notice of such appointment (and appointment of any
successor Warrant Agency) to all holders of Warrants. Until an
independent Warrant Agency is so appointed, the Company shall perform
the obligations of the Warrant Agency provided herein at its address at
DynTek, 00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000,
-4-
or such other address as the Company shall specify by notice to all
Warrant holders.
2.2. OWNERSHIP OF WARRANT. The Company may deem and treat the Person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by
any Person other than the Warrant Agency) for all purposes and shall
not be affected by any notice to the contrary, until presentation of
this Warrant for registration of transfer as provided in this Article
II.
2.3. TRANSFER OF WARRANT. The Company agrees to maintain at the Warrant
Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered,
in whole or in part, on such books, upon surrender of this Warrant at
the Warrant Agency, together with a written assignment of this Warrant
duly executed by the Holder or its duly authorized agent or attorney,
with (unless the Holder is the original Warrant holder) signatures
guaranteed by a bank or trust company or a broker or dealer registered
with the NASD, and funds sufficient to pay any transfer taxes payable
upon such transfer. Upon surrender the Company shall execute and
deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denominations specified in the instrument of
assignment, and this Warrant shall promptly be canceled.
Notwithstanding the foregoing, a Warrant may be exercised by a new
holder in accordance with the procedures set forth herein without
having a new Warrant issued. The Warrant Agency shall not be required
to register any transfers if the Holder fails to furnish to the
Company, after a request therefor, an opinion of counsel reasonably
satisfactory to the Company that such transfer is exempt from the
registration requirements of the Securities Act.
2.4. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be divided or
combined with other Warrants upon surrender hereof and of any Warrant
or Warrants with which this Warrant is to be combined at the Warrant
Agency, together with a written notice specifying the names and
denominations in which the new Warrant or Warrants are to be issued,
signed by the holders hereof and thereof or their respective duly
authorized agents or attorneys. Subject to compliance with Section 2.3
as to any transfer which may be involved in the division or
combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
2.5. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANTS. Upon receipt of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably
satisfactory to the Company (the original Warrantholder's or any
institutional Holder's indemnity being satisfactory indemnity in the
event of loss, theft or destruction of any Warrant owned by such
holder), or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company will make and deliver, in
lieu of such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase the same
aggregate number of shares of Common Stock as provided for in such
lost, stolen, destroyed or mutilated Warrant.
-5-
2.6. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all expenses,
taxes (other than transfer taxes or income taxes of a Holder) and other
charges payable in connection with the preparation, issuance and
delivery of Warrants and shares issuable upon exercise of the Warrants
hereunder.
ARTICLE III
CERTAIN RIGHTS
3.1. CONTEST AND APPRAISAL RIGHTS. Upon each determination of Fair Market
Value hereunder (other than a determination relating solely to setting
the value of fractional shares), the Company shall promptly give notice
thereof to all Warrantholders, setting forth in reasonable detail the
calculation of such Fair Market Value and the method and basis of
determination thereof, as the case may be. If the Requisite Holders
shall disagree in good faith with such determination and shall, by
notice to the Company given within 30 days after the Company's notice
of such determination, elect in good faith to dispute such
determination, such dispute shall be resolved in accordance with this
Section 3.1. In the event that a determination of Market Price, or a
determination of Fair Market Value solely involving Market Price, is
disputed, such dispute shall be submitted to a New York Stock Exchange
member firm selected by the Company and reasonably acceptable to the
Requisite Holders, whose determination of Fair Market Value and/or
Market Price, as the case may be, shall be binding on the Company and
the Warrantholders. The cost of such determination shall be shared
equally between the Company on the one hand and the Warrantholders on
the other hand. In the event that a determination of Fair Market Value,
other than a determination solely involving Market Price, is disputed,
such dispute shall be resolved through the Appraisal Procedure.
3.2. RIGHT TO RECEIVE INFORMATION. Until exercise or cancellation of the
Warrants, each Holder has the right to receive, and the Company
covenants and agrees that the Company will deliver to each Holder:
(a) as soon as available but not later than ninety (90) days after
the close of the fiscal year of the Company, a consolidated
balance sheet of the Company as at the end of such year and
the related consolidated statements of income, of
stockholders' equity and of cash flows for such year, such
consolidated statements to be audited by an independent
accounting firm;
(b) as soon as available but not later than forty-five (45) days
after the end of each quarter, a consolidated balance sheet of
the Company as at the end of, and the related consolidated
statements of income, of stockholders' equity and of cash
flows for the portion of the Company's fiscal year then
elapsed, all prepared in accordance with generally accepted
accounting principles;
(c) as soon as available, any and all management letters provided
to the Company's board of directors or audit committee by the
Company's auditors; and
-6-
(d) as soon as available, any and all reports filed by the Company
under the Securities Act and the Exchange Act.
The Company need not supply the items in clauses (a) or (b) to the extent such
item is included in a report delivered pursuant to clause (d).
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1. ADJUSTMENTS GENERALLY. The Exercise Price and the number of shares of
Common Stock (or other securities or property) issuable upon exercise
of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events, as provided in this Article IV.
4.2. COMMON STOCK REORGANIZATION. If the Company shall after the date of
issuance of this Warrant subdivide its outstanding shares of Common
Stock into a greater number of shares or consolidate its outstanding
shares of Common Stock into a smaller number of shares (any such event
being called a "Common Stock Reorganization"), then,
(a) the Exercise Price shall be adjusted, effective immediately
after the record date at which the holders of shares of Common
Stock are determined for purposes of such Common Stock
Reorganization, to a price determined by multiplying the
Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on such record date before
giving effect to such Common Stock Reorganization and the
denominator of which shall be the number of shares of Common
Stock outstanding after giving effect to such Common Stock
Reorganization, and
(b) the number of shares of Common Stock subject to purchase upon
exercise of this Warrant shall be adjusted, effective at such
time, to a number determined by multiplying the number of
shares of Common Stock subject to purchase immediately before
such Common Stock Reorganization by a fraction, the numerator
of which shall be the number of shares outstanding after
giving effect to such Common Stock Reorganization and the
denominator of which shall be the number of shares of Common
Stock outstanding immediately before such Common Stock
Reorganization.
4.3. COMMON STOCK DISTRIBUTION.
(a) If the Company shall after the date of issuance of this
Warrant issue or otherwise sell or distribute any shares of
Common Stock, otherwise than (i) pursuant to a Common Stock
Reorganization, an underwritten public offering, a transfer of
Company securities to a third party in connection with a
business development transaction (e.g., a joint marketing or
joint technology development transaction), or an exercise of
stock options granted to officers, directors or employees of
the Company, or (ii) pursuant to a private placement of Common
Stock (A) at least 50% of the proceeds of which are used to
-7-
pay down the Note, dated the date hereof, from DynTek to
DynCorp (the "Note"), or (B) a portion of the proceeds of
which are used to pay the full amount outstanding under the
Note (any such event, including any event described in
paragraphs (b) and (c) below, being herein called a "Common
Stock Distribution"), if such Common Stock Distribution shall
be for a consideration per share less than the Fair Market
Value per share of outstanding Common Stock of the Company on
the date of such Common Stock Distribution, or on the first
date of the announcement of such Common Stock Distribution
(whichever is less), then,
(A) effective upon such Common Stock Distribution, the
number of shares of Common Stock purchasable upon
exercise of this Warrant shall be adjusted by
multiplying the number of shares of Common Stock
subject to purchase upon exercise of this Warrant by a
fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding (and
issuable upon exercise or conversion of outstanding
options, warrants and convertible securities)
immediately prior to such Common Stock Distribution
plus the number of shares of Common Stock issued (or
deemed to be issued pursuant to paragraphs (b) and (c)
below) in such Common Stock Distribution and the
denominator of which shall be an amount equal to the
sum of (x) the number of shares of Common Stock
outstanding (and issuable upon exercise or conversion
of outstanding options, warrants and convertible
securities) immediately prior to such Common Stock
Distribution, plus (y) the number of shares of Common
Stock which the aggregate consideration, if any,
received by the Company (determined as provided below)
for such Common Stock Distribution would buy at the
Fair Market Value thereof, as of the date immediately
prior to such Common Stock Distribution or as of the
date immediately prior to the date of announcement of
such Common Stock Distribution (whichever is less), and
(B) In the event of any such adjustment, the Exercise Price
for each Warrant shall be adjusted to a number
determined by dividing the Exercise Price immediately
prior to such Common Stock Distribution by the fraction
used for purposes of the aforementioned adjustment.
The provisions of this paragraph (a), including by operation
of paragraph (b) or (c) below, shall not operate to increase
the Exercise Price or to reduce the number of shares of Common
Stock subject to purchase upon exercise of this Warrant.
(b) If the Company shall after the date of issuance of this
Warrant issue, sell, distribute or otherwise grant in any
manner (whether directly or by assumption in a merger or
otherwise) any rights to subscribe for or to purchase, or any
warrants or options (other than options granted to employees
or directors) for the purchase of, Common Stock or any stock
or securities convertible into or exchangeable for Common
Stock (such rights, warrants or options being herein called
"Options" and such convertible or exchangeable stock or
securities being herein called "Convertible Securities"),
-8-
whether or not such Options or the rights to convert or
exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon conversion
or exchange of such Convertible Securities (determined by
dividing (i) the aggregate amount, if any, received or
receivable by the Company as consideration for the granting of
such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all
such Options, plus, in the case of Options to acquire
Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or
sale of such Convertible Securities and upon the conversion or
exchange thereof, by (ii) the total number of shares of Common
Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options, in each case, for
such aggregate consideration) shall be less than the Fair
Market Value per share of outstanding Common Stock of the
Company on the date of granting such Options or on the date of
announcement thereof (whichever is less), then for purposes of
paragraph (a) above, the total number of shares of Common
Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total amount of such Convertible
Securities issuable upon the exercise of such Options shall be
deemed to have been issued as of the date of granting of such
Options and thereafter shall be deemed to be outstanding and
the Company shall be deemed to have received as consideration
such price per share, determined as provided above, therefor.
Except as otherwise provided in paragraph (d) below, no
additional adjustment of the number of shares of Common Stock
purchasable upon the exercise of this Warrant or of the
Exercise Price shall be made upon the actual exercise of such
Options or upon conversion or exchange of such Convertible
Securities.
(c) If the Company shall after the date of issuance of this
Warrant issue, sell or otherwise distribute or grant (whether
directly or by assumption in a merger or otherwise) any
Convertible Securities, whether or not the rights to exchange
or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such
conversion or exchange (determined by dividing (i) the
aggregate amount received or receivable by the Company as
consideration for the issue, sale or distribution of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon
the conversion or exchange thereof, by (ii) the total number
of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities, in each case, for
such aggregate consideration) shall be less than the Fair
Market Value per share of outstanding Common Stock of the
Company on the date of such issue, sale or distribution or on
the date of announcement thereof (whichever is less), then,
for purposes of paragraph (a) above, the total number of
shares of Common Stock issuable upon conversion or exchange of
all such Convertible Securities shall be deemed to have been
issued as of the date of the issue, sale or distribution of
such Convertible Securities and thereafter shall be deemed to
be outstanding and the Company shall be deemed to have
received as consideration such price per share, determined as
provided above, therefor. Except as otherwise provided in
-9-
paragraph (d) below, no additional adjustment of the number of
shares of Common Stock purchasable upon exercise of this
Warrant or of the Exercise Price shall be made upon the actual
conversion or exchange of such Convertible Securities.
(d) If the purchase price provided for in any Option referred to
in paragraph (b) above, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible
Securities referred to in paragraph (b) or (c) above, or the
rate at which any Convertible Securities referred to in
paragraph (b) or (c) above are convertible into or
exchangeable for Common Stock shall change at any time (other
than under or by reason of provisions designed to protect
against, and having the effect of protecting against, dilution
upon an event which results in a related adjustment pursuant
to this Article IV), the number of shares of Common Stock
purchasable upon exercise of this Warrant and the Exercise
Price then in effect shall forthwith be readjusted (effective
only with respect to any exercise of this Warrant after such
readjustment) to the number of shares of Common Stock
purchasable upon exercise of this Warrant and the Exercise
Price which would then be in effect had the adjustment made
upon the issue, sale, distribution or grant of such Options or
Convertible Securities been made based upon such changed
purchase price, additional consideration or conversion rate,
as the case may be; PROVIDED, HOWEVER, that such readjustment
shall give effect to such change only with respect to such
Options and Convertible Securities as then remain outstanding.
After any adjustment of the number of shares of Common Stock
purchasable upon exercise of each Warrant or the Exercise
Price pursuant to this Article IV on the basis of the issuance
of any Option or Convertible Securities or after any new
adjustments of the number of shares of Common Stock
purchasable upon exercise of each Warrant or the Exercise
Price pursuant to this paragraph, if the right of conversion,
exercise or exchange in such Option or Convertible Securities
shall expire or terminate, and the right of conversion,
exercise or exchange in respect of a portion of such Option or
Convertible Securities shall not have been exercised, such
previous adjustment shall be rescinded and annulled.
Thereupon, a recomputation shall be made of the effect of such
Option or Convertible Securities on the basis of treating the
number of shares of Common Stock, if any, theretofore actually
issued or issuable pursuant to the previous exercise of such
right of conversion, exercise or exchange as having been
issued on the date or dates of such conversion, exercise or
exchange and for the consideration actually received and
receivable therefor, and treating any such Option or
Convertible Securities which then remain outstanding as having
been granted or issued immediately after the time of any such
issuance for the consideration per share for which shares of
Common Stock are issuable under such Option or Convertible
Securities; and, if and to the extent called for by the
foregoing provisions of this Section on the basis aforesaid, a
new adjustment of the number of shares of Common Stock
purchasable upon exercise of each Warrant and the Exercise
Price shall be made, which new adjustment shall supersede
(effective only with respect to any exercise of this Warrant
after such readjustment) the previous adjustment so rescinded
and annulled.
-10-
(e) If the Company shall after the date of issuance of this
Warrant pay a dividend or make any other distribution upon any
capital stock of the Company payable in Common Stock, Options
or Convertible Securities, then, for purposes of paragraph (a)
above, such Common Stock, Options or Convertible Securities,
as the case may be, shall be deemed to have been issued or
sold without consideration.
(f) If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for cash, the
consideration received therefor shall be deemed to be the
amount received by the Company therefor before deduction of
any underwriting discount commissions or concessions paid or
allowed by the Company in connection therewith. If any shares
of Common Stock, Options or Convertible Securities shall be
issued, sold or distributed 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, after deduction of any expenses incurred
and any underwriting discount commissions or concessions paid
or allowed by the Company in connection therewith. If any
shares of Common Stock, Options or Convertible Securities
shall be issued in connection with any merger in which the
Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the Fair Market
Value of such portion of the assets and business of the
nonsurviving corporation as shall be attributable to such
Common Stock, Options or Convertible Securities, as the case
may be. If any Options shall be issued in connection with the
issue and sale of other securities of the Company, together
comprising one integral transaction in which no specific
consideration is allocated to such Options by the parties
thereto, such Options shall be deemed to have been issued for
consideration to be determined pursuant to the Appraisal
Procedure.
(g) If the Company shall establish a record date with respect to
the holders of the Common Stock for the purpose of entitling
them to receive a dividend or other distribution payable in
Common Stock, Options or Convertible Securities or to
subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the
date of the issue, sale, distribution or grant of the shares
of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other
distribution or the date of the granting of such right of
subscription or purchase, as the case may be.
(h) For purposes of determining whether any adjustment is required
pursuant to this Article IV, any security of the Company
having rights substantially equivalent to the Common Stock as
to dividends or upon liquidation, dissolution or winding up of
the Company shall be treated as if such security were Common
Stock.
4.4. DIVIDENDS. If the Company shall after the date of issuance of this
Warrant issue or distribute to all or substantially all holders of
shares of Common Stock evidences of indebtedness, any other securities
of the Company or any property, assets or cash, and if such issuance or
distribution does not constitute a Common Stock Reorganization or a
-11-
Common Stock Distribution (any such nonexcluded event being herein
called a "Dividend") then either,
(a) (i) the number of shares of Common Stock subject to purchase
upon exercise of this Warrant shall be increased (but not
decreased), effective immediately after the record date at
which the holders of shares of Common Stock are determined for
purposes of such Dividend, to a number determined by
multiplying the number of shares of Common Stock subject to
purchase immediately before such Dividend by a fraction, the
numerator of which shall be the Fair Market Value per share of
outstanding Common Stock on such record date and the
denominator of which shall be the Fair Market Value per share
of outstanding Common Stock of the Company on such record date
less the then Fair Market Value of the evidences of
indebtedness, securities, cash, or property or other assets
issued or distributed in such Dividend with respect to one
share of Common Stock, and
(ii) the Exercise Price shall be decreased (but not increased) to a
price determined by multiplying the Exercise Price then in
effect by a fraction, the numerator of which shall be the
number of shares of Common Stock subject to purchase upon
exercise of this Warrant immediately before such Dividend and
the denominator of which shall be the number of shares of
Common Stock subject to purchase upon exercise of this Warrant
immediately after such Dividend, or
(b) in lieu of making such adjustment described in (A) above, upon
exercise hereof the Holder of this Warrant will be entitled to
receive the per-share amount of such Dividend that such Holder
would have received with respect to the number of shares of
Common Stock issuable upon exercise of this Warrant
immediately before payment of such Dividend;
PROVIDED, that if after the date of issuance of this Warrant the Company
repurchases shares of Common Stock for a per share consideration which exceeds
the Fair Market Value (as calculated immediately prior to such repurchase), then
the number of shares of Common Stock purchasable upon exercise of this Warrant
and the Exercise Price shall be adjusted in accordance with the foregoing
provisions, as if, in lieu of such repurchases, the Company had (I) distributed
a Dividend having a Fair Market Value equal to the Fair Market Value of all
property and cash expended in the repurchases, and (II) effected a reverse split
of the Common Stock in the proportion required to reduce the number of shares of
Common Stock outstanding from (x) the number of such shares outstanding
immediately before such first repurchase to (y) the number of such shares
outstanding immediately following all the repurchases.
4.5. CAPITAL REORGANIZATION. If after the date of issuance of this Warrant
there shall be any consolidation or merger to which the Company is a
party, other than a consolidation or a merger in which the Company is a
continuing corporation and which does not result in any
reclassification of, or change (other than a Common Stock
Reorganization or a change in par value), in, outstanding shares of
-12-
Common Stock, or any sale or conveyance of the property of the Company
as an entirety or substantially as an entirety (any such event being
called a "Capital Reorganization"), then, effective upon the effective
date of such Capital Reorganization, the Holder shall have the right to
purchase, upon exercise of this Warrant, the kind and amount of shares
of stock and other securities and property (including cash) which the
Holder would have owned or have been entitled to receive after such
Capital Reorganization if this Warrant had been exercised immediately
prior to such Capital Reorganization, assuming such holder (i) is not a
person with which the Company consolidated or into which the Company
merged or which merged into the Company or to which such sale or
conveyance was made, as the case may be ("constituent person"), or an
Affiliate of a constituent person and (ii) failed to exercise his
rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such Capital Reorganization
(provided that if the kind or amount of securities, cash or other
property receivable upon such Capital Reorganization is not the same
for each share of Common Stock held immediately prior to such
consolidation, merger, sale or conveyance by other than a constituent
person or an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for
the purposes of this Section the kind and amount of shares of stock and
other securities or other property (including cash) receivable upon
such Capital Reorganization shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares). As
a condition to effecting any Capital Reorganization, the Company or the
successor or surviving corporation, as the case may be, shall execute
and deliver to each Warrantholder and to the Warrant Agency an
agreement as to the Warrantholder's rights in accordance with this
Section 4.5, providing for subsequent adjustments as nearly equivalent
as may be practicable to the adjustments provided for in this Article
IV. The provisions of this Section 4.5 shall similarly apply to
successive Capital Reorganizations.
4.6. CERTAIN OTHER EVENTS. If any event occurs after the date of issuance of
this Warrant as to which the foregoing provisions of this Article IV
are not strictly applicable or, if strictly applicable, would not, in
the good faith judgment of the Board of Directors of the Company,
fairly protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then such Board
shall make such adjustments in the application of such provisions, in
accordance with such essential intent and principles, as shall be
reasonably necessary, in the good faith opinion of such Board, to
protect such purchase rights as aforesaid, but in no event shall any
such adjustment have the effect of increasing the Exercise Price or
decreasing the number of shares of Common Stock subject to purchase
upon exercise of this Warrant, or otherwise adversely affect the
Warrantholders.
4.7. ADJUSTMENT RULES.
(a) Any adjustments pursuant to this Article IV shall be made
successively whenever an event referred to herein shall occur.
(b) If the Company shall set a record date to determine the
holders of shares of Common Stock for purposes of a Common
Stock Reorganization, Common Stock Distribution, Dividend or
Capital Reorganization, and shall legally abandon such action
-13-
prior to effecting such Action, then no adjustment shall be
made pursuant to this Article IV in respect of such action.
(c) No adjustment in the amount of shares purchasable upon
exercise of this Warrant or in the Exercise Price shall be
made hereunder unless such adjustment increases or decreases
such amount or price by five percent or more, but any such
lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment
which together with any adjustments so carried forward shall
serve to adjust such amount or price by one percent or more.
(d) No adjustment in the Exercise Price shall be made hereunder if
such adjustment would reduce the Exercise Price to an amount
below par value of the Common Stock, which par value shall
initially be $.01 per share of Common Stock.
(e) No adjustment shall be made pursuant to this Article IV in
respect of the issuance (or deemed issuance) or repurchase of
shares of Common Stock in connection with the exercise of the
Warrants.
(f) No adjustment shall be made pursuant to this Article IV in the
event of an initial public offering.
(g) No adjustment shall be made pursuant to this Article IV with
respect to the exercise of securities issued under employee
benefit plans.
(h) If the number of shares of Common Stock purchasable upon
exercise of the Warrants is adjusted such that such number
includes a fraction, the Company shall not be required to
issue fractional shares.
4.8. PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a condition
precedent to the taking of any action which would require an adjustment
pursuant to this Article IV, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or
exemptions, in order that the Company may thereafter validly and
legally issue as fully paid and nonassessable all shares of Common
Stock which the holders of Warrants are entitled to receive upon
exercise thereof.
4.9. NOTICE OF ADJUSTMENT. Not more than 30 days after the record date or
effective date, as the case may be, of any action which requires or
might require an adjustment or readjustment pursuant to this Article
IV, the Company shall give notice to each Warrantholder of such event,
describing such event in reasonable detail and specifying the record
date or effective date, as the case may be, and, if determinable, the
required adjustment and the computation thereof. If the required
adjustment is not determinable at the time of such notice, the Company
shall give notice to each Warrantholder of such adjustment and
computation promptly after such adjustment becomes determinable.
-14-
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"AFFILIATE" shall mean, of any Person, a Person who, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such other Person. The term "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; PROVIDED, HOWEVER, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control.
"APPRAISAL PROCEDURE" means a procedure whereby two independent
appraisers, one chosen by the Company and one by the Requisite Holders, shall
mutually agree upon the determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within 15 days
after the Appraisal Procedure is invoked. If within 30 days after appointment of
the two appraisers they are unable to agree upon the amount in question, a third
independent appraiser shall be chosen within 10 days thereafter by the mutual
consent of such first two appraisers or, if such first two appraisers fail to
agree upon the appointment of a third appraiser, such appointment shall be made
by the American Arbitration Association, or any organization successor thereto,
from a panel of arbitrators having experience in the appraisal of the subject
matter to be appraised. The decision of the third appraiser so appointed and
chosen shall be given within 30 days after the selection of such third
appraiser. If three appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than twice the
amount by which the other determination is disparate from the middle
determination, then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be binding
and conclusive on the Company and the Warrantholders; otherwise the average of
all three determinations shall be binding and conclusive on the Company and the
Warrantholders. The costs of conducting any Appraisal Procedure shall be borne
by the Warrantholders requesting such Appraisal Procedure, except (a) the fees
and expenses of the appraiser appointed by the Company and any costs incurred by
the Company shall be borne by the Company, (b) the fees and expenses of the
appraiser appointed by the Requisite Holders and any costs incurred by the
Requisite Holders shall be borne by the Requisite Holders, and (c) the fees and
expenses of a third appraiser shall be borne equally by the Company and the
Requisite Holders, provided that if such Appraisal Procedure shall result in a
determination that is disparate by 10% or more to the benefit of the holder from
the Company's initial determination, all costs of conducting such Appraisal
Procedure shall be borne by the Company.
"BUSINESS DAY" shall mean (a) if any class of Common Stock is listed or
admitted to trading on a national securities exchange, a day on which the
principal national securities exchange on which such class of Common Stock is
listed or admitted to trading is open for business or (b) if no class of Common
Stock is so listed or admitted to trading, a day on which any New York Stock
Exchange member firm is open for business.
-15-
"CAPITAL REORGANIZATION" shall have the meaning set forth in Section
4.5.
"CLOSING PRICE" with respect to any security on any day means (a) if
such security is listed or admitted for trading on a national securities
exchange, the reported last sales price regular way or, if no such reported sale
occurs on such day, the average of the closing bid and asked prices regular way
on such day, in each case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such class of security is listed or admitted to
trading, or (b) if such security is not listed or admitted to trading on any
national securities exchange, the last quoted sales price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market
on such day as reported by Nasdaq or any comparable system then in use or, if
not so reported, as reported by any New York Stock Exchange member firm
reasonably selected by the Company for such purpose.
"COMMON STOCK" shall have the meaning set forth in the first paragraph
of this Warrant subject to adjustment pursuant to Article IV.
"COMMON STOCK DISTRIBUTION" shall have the meaning set forth in Section
4.3(a).
"COMMON STOCK REORGANIZATION" shall have the meaning set forth in
Section 4.2.
"COMPANY" shall have the meaning set forth in the first paragraph of
this Warrant.
"CONSTITUENT PERSON" shall have the meaning set forth in Section 4.5.
"CONVERTIBLE SECURITIES" shall have the meaning set forth in Section
4.3(b).
"DIVIDEND" shall have the meaning set forth in Section 4.4.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and any similar or successor federal statute, and the rules and regulations of
the Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
"EXERCISE PRICE" shall mean $4.00.
"FAIR MARKET VALUE" means the fair market value of the Company's Common
Stock at any date, as determined in good faith by the Board of Directors of the
Company (a) taking into account the most recently completed arm's-length
transaction between the Company and a person other than an Affiliate of the
Company and the closing of which occurs on such date or shall have occurred
within the six-month period preceding such date, or (b) if no transaction shall
have occurred on such date, taking into account the fair market value of the
business or property in question as determined by an Independent Financial
Expert, PROVIDED, HOWEVER, that the Fair Market Value of any security for which
a Closing Price is available shall be the Market Price of such security. The
Fair Market Value of the Common Stock shall be the Fair Market Value of the
entire equity interest in the Company and its subsidiaries as a going concern,
minus the Fair Market Value of the Company's equity securities (if any) entitled
to a preference over the Common Stock in the event of a liquidation of the
Company. Notwithstanding the foregoing, if, at any date of determination of the
Fair Market Value of the entire equity interest in the Company, the Common Stock
-16-
of any class shall then be publicly traded, the Fair Market Value of the Company
on such date shall be the Market Price on such date multiplied by the number of
shares of Common Stock on a fully diluted basis, giving effect to any
consideration to be paid to the Company in connection with the exercise or
conversion of any security.
"HOLDER" shall have the meaning set forth in the first paragraph of
this Warrant.
"INDEPENDENT FINANCIAL EXPERT" means a United States investment
banking, accounting or valuation firm of national or regional standing in the
United States (i) which does not, and whose directors, officers and employees or
Affiliates do not have a direct or indirect material financial interest for its
proprietary account in the Company or any of its Affiliates and (ii) which, in
the judgment of the Board of Directors of the Company, is otherwise independent
with respect to the Company and its Affiliates and qualified to perform the task
for which it is to be engaged.
"MARKET PRICE" with respect to any security on any day means the
average of the daily Closing Prices of a share or unit of such security for the
10 consecutive Business Days ending on the most recent Business Day for which a
Closing Price is available; PROVIDED, HOWEVER, that in the event that, in the
case of Common Stock, the Market Price is determined during a period following
the announcement by the Company of (A) a dividend or distribution of Common
Stock, or (B) any subdivision, combination or reclassification of Common Stock
and prior to the expiration of 20 Business Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Market Price
shall be appropriately adjusted to reflect the current market price per share
equivalent of Common Stock.
"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The Nasdaq Stock Market, Inc.
"NON-ELECTING SHARE" shall have the meaning set forth in Section 4.5.
"OPTIONS" shall have the meaning set forth in Section 4.3(b).
"PERSON" shall mean an individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, or other legal entity.
"REGISTRABLE SECURITIES" means the Common Stock and any other
securities issued or issuable upon exercise of the Warrants.
"REQUISITE HOLDERS" means the Holders of Warrants to purchase a
majority of the shares of Common Stock issuable upon exercise of the Warrants
(excluding Warrants held by the Company or any of its subsidiaries) at the time
outstanding.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
any similar or successor federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
-17-
"WARRANT AGENCY" shall have the meaning set forth in Section 2.1.
"WARRANTHOLDER" means a holder of a Warrant.
"WARRANTS" shall have the meaning set forth in the first paragraph of
this Warrant.
ARTICLE VI
MISCELLANEOUS
6.1. NOTICES. All notices, requests, consents and other communications
provided for herein shall be in writing and shall be effective upon
delivery in person, faxed, or mailed by certified or registered mail,
return receipt requested, postage pre-paid, addressed as follows:
(i) if to the Company, to DynTek, 00000 Xxx Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000;
(ii) if to an initial Holder of Warrants, to such Holder, c/o
DynCorp, 00000 Xxxxx Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000,
and if to any subsequent Holder of Warrants, to it at such
address as may have been furnished to the Company in writing
by such Holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Warrants) or to the
Holders of Warrants (in the case of the Company) in accordance with the
provisions of this paragraph.
6.2. WAIVERS; AMENDMENTS. No failure or delay of the Holder in exercising
any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise
of any other right or power. The rights and remedies of the Holder are
cumulative and not exclusive of any rights or remedies which it would
otherwise have. The provisions of this Warrant may be amended, modified
or waived only with the written consent of the Company and the
Requisite Holders; PROVIDED, HOWEVER, that no such amendment,
modification or waiver shall, without the written consent of each
Warrantholder whose interest might be adversely affected by such
amendment, modification or waiver, (a) change the number of shares of
Common Stock subject to purchase upon exercise of this Warrant, the
Exercise Price or provisions for payment thereof or (b) amend, modify
or waive the provisions of this Section or Articles III or IV. In the
event of any such amendment, modification or waiver, the Company shall
give prompt notice thereof to all Warrantholders and, if appropriate,
notation thereof shall be made on all Warrants thereafter surrendered
for registration of transfer or exchange.
6.3. GOVERNING LAW. This Warrant shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to
principles of conflicts of law.
-18-
6.4. SURVIVAL OF AGREEMENTS; REPRESENTATIONS AND WARRANTIES, ETC. All
representations, warranties and covenants made by the Company herein or
in any certificate or other instrument delivered by or on behalf of it
in connection with the Warrants shall be considered to have been relied
upon by the Holder and shall survive the issuance and delivery of the
Warrants, regardless of any investigation made by the Holder, and shall
continue in full force and effect so long as any Warrant is
outstanding. All statements in any such certificate or other instrument
shall constitute representations and warranties hereunder.
6.5. COVENANTS TO BIND SUCCESSOR AND ASSIGNS. All covenants, stipulations,
promises and agreements in this Warrant contained by or on behalf of
the Company shall bind its successors and assigns, whether so expressed
or not.
6.6. SEVERABILITY. In case any one or more of the provisions contained in
this Warrant shall be invalid, illegal or unenforceable in any respect,
the validity, legality or enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
6.7. SECTION HEADINGS. The sections headings used herein are for convenience
of reference only, are not part of this Warrant and are not to affect
the construction of or be taken into consideration in interpreting this
Warrant.
6.8. NO RIGHTS AS STOCKHOLDER. Except as provided herein, this Warrant shall
not entitle the Holder to any rights as a stockholder of the Company.
6.9. NO IMPAIRMENT. The Company shall not by any action including, without
limitation, amending its certificate of incorporation 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 of this
Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder against
impairment. Without limiting the generality of the foregoing, the
Company will (a) not, directly or indirectly, increase the par value of
any shares of Common Stock receivable upon the exercise of this Warrant
above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon
the exercise of this Warrant, and (c) use its commercially reasonable
best efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this
Warrant.
-19-
6.10. SUBMISSION TO JURISDICTION; VENUE.
(a) Any legal action or proceeding with respect to this Warrant
may be brought in the courts of the State of Delaware or of
the United States in Delaware, and, by execution and delivery
of this Warrant, the Company irrevocably accepts for itself
and in respect of its property, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts. The
Company further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to[ ] such service to become
effective 30 days after such mailing. Nothing herein shall
affect the right of the Holder to serve process in any other
manner permitted by law or to commence legal proceedings or
otherwise proceed against the Company in any other
jurisdiction.
(b) The Company hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in
connection with this Warrant brought in the courts referred to
in clause (a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such
action or proceeding brought in any such court has been
brought in an inconvenient forum.
-20-
IN WITNESS WHEREOF, DynTek has caused this Warrant to be executed in
its corporate name by one of its officers thereunto duly authorized.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
-21-
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
TO DYNTEK
The undersigned hereby irrevocably elects to exercise the right to
purchase represented by the attached Warrant for, and to purchase thereunder,
_________________ shares of Common Stock, as provided for therein, and tenders
herewith payment of the exercise price in full in accordance with the terms of
the attached Warrant.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated: [ ]
---------------------------
Note: The above signature
should correspond
exactly with the
name on the face of
the attached Warrant
or with the name of
the assignee
appearing in the
assignment form
below.
-22-
ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ______________________________ hereby sells,
assigns and transfers unto __________________ the attached Warrant, together
with all rights, title and interest therein, and does hereby irrevocably
constitute and appoint _________________ attorney to transfer said Warrant on
the books of ____________________, with full power of substitution in the
premises.
----------------------------
Note: The above signature
should correspond
exactly with the
name on the face of
the attached
Warrant.
-23-
