EXHIBIT 4.2
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(THE "SECURITIES ACT") OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR SUCH SHARES MAY BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED IN ACCORDANCE WITH THE SECURITIES ACT OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION THEREUNDER.
WARRANT NO.:
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NO. OF SHARES:
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ANTI-DILUTION WARRANT
TO
PURCHASE
COMMON STOCK
OF
PALADYNE CORP.
610 Crescent Executive Court, Suite 124
Lake Mary, Florida 32746
Warrant to Purchase Common Stock to maintain
percentage ownership of stock in Paladyne Corp.
(subject to adjustment as set forth herein)
Exercise Price $1.146 Per Share
(subject to adjustment as set forth herein)
Paladyne Corp., a Delaware corporation (the "Company"), hereby certifies
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that, for value received, the person or entity named below (the "Holder"), is
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entitled, subject to the terms and conditions set forth below, to purchase from
the Company shares (the "Shares") of the Company's Common Stock, $0.001 par
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value (the "Common Stock"), set forth below at an exercise price of $1.146 per
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Share (the "Exercise Price"), at any time during the period commencing upon
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vesting pursuant to Section 1.01 of this Warrant (but not earlier than the
effective date of an increase in the authorized Common Stock) and ending at 5:00
p.m., Eastern time, thirty (30) days after the later of (i) termination or
exercise of all the Present Warrants (as defined hereinafter) or (ii) written
notice by the Company to the Holder of the aggregate number of shares issuable
upon exercise of this Warrant following termination or exercise of all the
Present Warrants (as defined hereinafter) (the "Exercise Period"):
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Name:
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Address:
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The number of Shares purchasable upon exercise of this Warrant, the
Exercise Price and the Exercise Period are subject to adjustment as provided
below. The term "Warrant" as used herein shall include this Warrant and any
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Warrants issued in substitution for or replacement of this Warrant, or any
Warrants into which this Warrant may be divided or exchanged.
This Warrant may not be assigned, transferred, sold, offered for sale, or
exercised by the Holder except upon compliance with all the provisions hereof.
This Warrant is one of several warrants on similar terms which together entitled
the holders thereof to purchase up to a total of no more than 4,000,000 shares
of common stock collectively with this Warrant the (the "Anti-Dilution
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Warrants") to maintain the relative percentage ownership interests of the
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Holders in the event that other already outstanding options or warrants, as
listed on Schedule 1 hereto (the "Present Warrants"), are exercised, which were
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issued pursuant to Section 3.1 of the Agreement and Plan of Merger, dated as of
December, 21, 2000, by and among the Company, E-Com Acquisition Corp., and
e-commerce support centers, inc. (the "Merger Agreement"). This Warrant is only
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exercisable in the event, and to the extent, that one or more of the Present
Warrants listed on Schedule 1 is exercised. To the extent that any of those
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Present Warrants, or any of the rights thereto, should lapse, this Warrant, and
the rights hereto, will concurrently lapse.
1. EXERCISE OF WARRANT.
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1.01 Exercise. Subject to the terms of this Warrant, the Holder shall have
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the right to exercise this Warrant only after and to the extent of the exercise
of any of the Present Warrants listed on Schedule 1. The aggregate number of
Shares for which the Holders shall have the right to exercise this Warrant shall
be equal to sixty percent (60%) of the aggregate number of shares of Common
Stock issued upon exercise of the Present Warrants during the period commencing
as of the date of issuance of this Warrant and ending as of the termination of
this Warrant. The maximum number of Shares for which any individual Holder shall
have the right to exercise this Warrant shall be such Holder's pro rata share of
the aggregate number of Shares for which the Holders shall have the right to
exercise this Warrant at such time. To give notice to the Holders of the number
of Shares issuable upon exercise of this Warrant at any time, as soon as
practicable after the close of each fiscal quarter, during the term of this
Warrant, the Company shall give notice to the Holder of the number of Present
Warrants listed on Schedule 1 that have been exercised and/or terminated during
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the fiscal quarter then ended, and the number of Shares hereunder as to which
this Warrant is then exercisable.
1.02 Notice of Exercise. Subject to the other terms and conditions of this
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Warrant, the purchase rights evidenced by this Warrant may be exercised, in
whole or in part, at any time during the Exercise Period, as to the number of
Shares then exercisable pursuant to Section 1.01 hereof, by the Holder's
presentation and surrender of this Warrant to the Company at its principal
office, accompanied by a duly executed Notice of Exercise, in the form attached
to and by this reference incorporated in this Warrant as Exhibit A, and by
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payment of the aggregate Exercise Price in certified funds, wire transfer or
bank cashier's check payable to the order of the Company for the number of
Shares specified in the Notice of Exercise. If at the time of exercise, the
Shares to be acquired upon exercise are not subject to an effective registration
statement under the Securities Act, the Holder agrees to make all necessary
representations and warranties required by federal and state securities laws, to
fulfill the applicable exemptions from registration thereunder. In the event
this Warrant is exercised in part only, as soon as is practicable after the
presentation and surrender of this Warrant to the Company for exercise, the
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Company shall execute and deliver to the Holder a new Warrant, containing the
same terms and conditions as this Warrant, evidencing the right of the Holder to
purchase the number of Shares as to which this Warrant has not been exercised.
1.03 Net Issue Exercise.
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(a) In lieu of exercising this Warrant for cash as provided above, the
Holder may elect, in its sole discretion, to exercise all or part of this
Warrant without paying cash and to receive shares equal to the value of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant at
the principal office of the Company together with the Notice of Election, in the
form attached to and by this reference incorporated in this Warrant as Exhibit
C, in which event the Company shall issue to the Holder the number of ---------
shares of Shares computed using the following formula:
X = Y x (A-B)
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A
Where: X = the number of Shares to be issued to the Holder.
Y = the number of Shares to be purchased upon exercise of this
Warrant.
A = the fair market value of one share of the Company's
Shares.
B = Exercise price (as adjusted to the date of such
calculations).
(b) For purposes of this Section, the fair market value of the Company's
Shares shall mean, with respect to each share of Shares:
(1) if the Shares of the Company are listed on any national securities
exchange, Nasdaq system or the OTC Bulletin Board(R), the average of the closing
prices of the Shares, sold on the primary securities exchange on which the
Shares are at the time listed, on the ten (10) trading days immediately prior to
the day the Notice of Net Issuance to exercise is delivered to the Company;
(2) if the Shares are not quoted on any national securities exchange,
Nasdaq system or the OTC Bulletin Board(R), the average of the mean between the
highest bid and lowest asked price on such day in the domestic over-the-counter
market as reported by any similar successor organization, on the thirty (30)
calendar days immediately prior to the day the Notice of Net Issuance to
exercise is delivered; or
(3) if there is no public market for the Shares, the average price
paid in all sales of securities of the Company made within the twelve (12)
months before the Notice of Net Issuance to exercise is delivered (excluding
exercises of options and warrants), or, if no sales have been made by the
Company during the preceding twelve (12) months, the price determined by the
Company's Board of Directors acting in good faith.
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(c) The net exercise provision set forth in this Section 1.03 shall not
apply to the first 2,000,000 Shares of the Company's Common Stock issued under
this form of Warrant pursuant to Section 3.1(a)(ii) of the Merger Agreement.
1.04 Holder of Record. As of the third business day after receipt by the
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Company of this Warrant, the executed Notice of Exercise and the payment of the
aggregate Exercise Price as described in Section 1.01 hereof, the Holder (or the
person designated in the Notice of Exercise) shall be deemed to be the holder of
record of the Shares issuable upon such exercise, notwithstanding that the stock
transfer books of the Company may then be closed or that certificates
representing such Shares may not have been prepared or actually delivered to the
Holder (or his designee).
2. EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT.
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2.01 Assignment. All sales, transfers or assignments of this Warrant must
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be in compliance with Section 7 hereof. Any assignments or transfer of this
Warrant shall be made by the presentation and surrender of this Warrant to the
Company at its principal office accompanied by a duly executed Assignment Form,
in the form attached to and by this reference incorporated in this Warrant as
Exhibit C. Upon the presentation and surrender of these items to the Company,
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the Company, at its sole expense, shall execute and deliver to the new Holder or
Holders a new Warrant or Warrants, containing the same terms and conditions as
this Warrant, in the name of the new Holder or Holders as named in the
Assignment Form, and this Warrant shall at that time be cancelled.
2.02 Exchangeable. This Warrant, alone or with other Anti-Dilution Warrants
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conditions and owned by the same Holder, is exchangeable at the option of the
Holder but at the Company's sole expense, at any time prior to its expiration
either by its terms or by its exercise in full upon presentation and surrender
to the Company at its principal office, for another Warrant or other Warrants,
of different denominations but containing the same terms and conditions as this
Warrant, entitling the Holder to purchase the same aggregate number of Shares
that were purchasable pursuant to this Warrant or other Anti-Dilution Warrants
presented and surrendered. At the time of presentation and surrender by the
Holder to the Company, the Holder also shall deliver to the Company a written
notice, signed by the Holder, specifying the denominations in which new Warrants
are to be issued to the Holder.
2.03 Replacement. The Company will execute and deliver to the Holder a new
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Warrant containing the same terms and conditions as this Warrant upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, provided that (i) in the case of
loss, theft or destruction, the Company receives from the Holder a reasonably
satisfactory indemnification and bond, as determined by the Company's Board of
Directors, and (ii) in the case of mutilation, the Holder presents and
surrenders this Warrant to the Company for cancellation. Any new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company regardless of whether the Warrant that was lost, stolen,
destroyed, or mutilated shall be enforceable by anyone at any time.
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3. ADJUSTMENTS OF EXERCISE PRICE AND SHARES PURCHASABLE.
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The Exercise Price and the number of Shares purchasable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this Section.
3.01 Subdivision.
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(a) If the Company splits, subdivides or reclassifies its outstanding
shares of Common Stock into a greater number of shares of Common Stock or
declares a stock dividend payable in shares of its Common Stock, the Exercise
Price in effect immediately prior to such event shall be proportionately
reduced. Conversely, if the Company combines or reclassifies its outstanding
shares of Common Stock into a lesser number of shares of Common Stock, the
Exercise Price in effect immediately prior to such combination shall be
proportionally increased. In case of a split, dividend, subdivision, combination
or reclassification described in this Paragraph (a), the adjustment of the
Exercise Price shall be made as of the effective date of the applicable event. A
distribution on shares of Common Stock or dividend (other than paid in cash)
shall be considered a subdivision of shares of Common Stock for the purposes of
this Section 3.01, except that the adjustment will be made as of the record date
for such distribution. Such adjustment shall be made successively whenever any
event listed in this Paragraph (a) shall occur.
(b) Whenever any adjustment of an Exercise Price becomes effective pursuant
to the terms of this Section 3, the number of Shares purchasable upon the
exercise of this Warrant shall be simultaneously adjusted to the number
determined by dividing (i) the product of the number of Shares purchasable upon
the exercise of this Warrant prior to such adjustment multiplied by the
applicable Exercise Price in effect prior to such adjustment by (ii) the
applicable Exercise Price in effect after such adjustment.
(c) All calculations under this Section 3.01 shall be made to the nearest
cent or to the nearest share.
(d) In the event that at any time, as a result of any adjustment made
pursuant to Paragraph (a) of this Section 3.01, the Holder thereafter shall
become entitled to receive any shares of the Company other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of this
Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Paragraphs (a) to (c), inclusive, of this Section
3.01.
3.02 Reclassification.
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(a) In case of any capital reclassification or reorganization or any
consolidation or merger of the Company with or into another corporation (other
than a merger with a subsidiary after which the Company is the continuing
corporation and which does not result in any change of outstanding shares of
Common Stock) or any sale, lease or conveyance to another corporation of the
assets of the Company as an entirety or substantially as an entirety, and the
surviving entity is publicly traded, the Company, as a condition precedent to
such transaction, shall cause effective provision to be made so that the Holder
of this Warrant shall have the right thereafter, by exercising this Warrant, to
purchase the kind and amount of securities and/or other property receivable upon
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such reclassification, reorganization, consolidation, merger, sale, lease or
conveyance as if the Holder had exercised this Warrant in full immediately prior
to such reclassification, reorganization, consolidation, merger, sale, lease or
conveyance. Any such provision shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Warrant, including this Section.
(b) In case upon such reclassification, reorganization, consolidation,
merger, sale, lease of conveyance the surviving entity is not publicly traded,
the Company agrees that a condition of such transaction will be that the Company
shall mail to the Holder at the earliest applicable time (and, any event not
less than twenty (20) days before any record date for determining the persons
entitled to receive the consideration payable in such transaction) written
notice of such record date. Such notice shall also set forth facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price of and the kind and amount of the
shares of stock and other securities and property deliverable upon exercise of
this Warrant. However, if the Holder does not exercise this Warrant prior to the
closing of such action, the Warrant shall thereafter be terminated and the
Holders shall not be entitled to any of his previous rights herein.
3.03 Adjustment. If, as a result of an adjustment made pursuant to Section
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3.03 hereof, the Holder shall become entitled to receive shares of two or more
classes of capital stock of the Company or any other corporation or entity, the
Board of Directors (or other governing body if there be no board of directors)
thereof whose determination shall be conclusive and shall be described in a
statement sent to the Holder, shall determine the allocation of the adjusted
Exercise Price between or among shares of such classes of capital stock. In the
event of any subsequent adjustments to the Exercise Price pursuant to Section
3.03, hereof, such adjustments shall be made separately to the portion of the
Exercise Price so allocated to each of such classes of capital stock. The
foregoing provisions of Section 3.03 hereof similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, leases or
conveyances.
3.04 Record Date. In any case in which this Section 3 shall require that an
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adjustment shall become effective immediately after a record date for an event,
the Company may defer until the actual occurrence of such event (i) issuing to
the Holder after such record date and before the occurrence of such event the
additional Shares issuable upon any exercise of this Warrant by reason of the
adjustment required by such event over and above the Shares issuable upon such
exercise before giving effect to such adjustment and (ii) paying to such Holder
any amount of cash in lieu of a fractional Share, provided the Company shall
deliver to such Holder a due bill or other appropriate instrument evidencing the
right of such Holder to receive such additional Shares or such cash upon the
occurrence of the event requiring such adjustment.
3.05 Form of Warrant. Subject to the provisions of Section 3.05 hereof, the
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form of Warrant need not be changed because of any adjustment in the Exercise
Price or of the number of Shares purchasable upon the exercise of this Warrant,
and Warrants issued after any such adjustment may state the same Exercise Price
and the same number of Shares purchasable upon exercise of this Warrant as are
stated in this Warrant as if such adjustment had not occurred. However, upon
request by the Holder the Company shall issue to the Holder a substitute form of
Warrant that reflects the adjustment.
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4. NOTICE TO HOLDERS.
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If, prior to the expiration of this Warrant either by its terms or by its
exercise in full, any of the following shall occur:
(i) the Company shall declare a stock dividend or authorize any other
non-cash distribution on its Common Stock; or
(ii) the Company shall authorize the granting to the stockholders of its
Common Stock of rights to subscribe for or purchase any securities or any other
similar rights; or
(iii) any reclassification, reorganization or similar change of the Common
Stock, or any consolidation or merger to which the Company is a party, or the
sale, lease, or exchange of any significant portion of the assets of the
Company; or
(iv) the voluntary or involuntary dissolution, liquidation or winding up of
the Company; or
(v) any purchase, retirement or redemption by the Company of its Common
Stock to stockholders generally;
(vi) then, and in any such case, the Company shall deliver to the Holder
written notice thereof at least twenty (20) days prior to the earliest
applicable date specified below with respect to which notice is to be given,
which notice shall state the following:
(A) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights, or, if a record is not to be taken, the date
as of which the stockholders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined;
(B) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or
purchase, retirement or redemption is expected to become effective, and the
date, if any, as of which the Company's stockholders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, reorganization, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up, purchase,
retirement or redemption; and
(C) if any matters referred to in the foregoing clauses (A) and (B)
are to be voted upon by stockholders of Common Stock, the date as of which those
stockholders to be entitled to vote are to be determined.
5. OFFICER'S CERTIFICATE.
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Whenever the Exercise Price or the aggregate number of Shares purchasable
pursuant to this Warrant shall be adjusted as required by the provisions of
Section 3 hereof, the Company shall promptly file with its Secretary at its
principal office, an officer's certificate (the "Officer's Certificate")
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executed by the Company's President and Secretary or Assistant Secretary,
describing the adjustment and setting forth, in reasonable detail, the facts
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requiring such adjustment and the basis for and calculation of such adjustment
in accordance with the provisions of this Warrant. Each Officer's Certificate
shall be mailed to the Holder of this Warrant and also be available to the
Holder for inspection at all reasonable times. The Officer's Certificate
described in this Section 5 shall be deemed to be conclusive as to the
correctness of the adjustment reflected therein if, and only if, the Holder of
this Warrant does not deliver written notice to the Company of an objection to
the adjustment within twenty (20) days after the Officer's Certificate is
delivered to the Holder of this Warrant. The Company will make such of its books
and records available for inspection and copying during normal business hours by
the Holder solely as to permit a determination as to the correctness of the
adjustment. If written notice of an objection is delivered by the Holder to the
Company and the parties cannot reconcile the dispute, the Holder and the Company
shall submit the dispute to the Company's Auditors, whose determination shall be
final and binding upon the Holder and the Company. Failure to prepare or provide
the Officer's Certificate shall not modify the parties' rights hereunder.
6. RESERVATION OF SHARES.
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The Company hereby agrees that at all times prior to the exercise or
expiration of this Warrant, it will have authorized and will reserve and keep
available for issuance and delivery to the Holder that number of shares of its
Common Stock or other shares of its capital stock that may be required from time
to time for issuance and delivery upon the exercise of the then unexercised
portion of this Warrant and all other Anti-Dilution Warrants then outstanding
and unexercised.
7. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
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7.01 Registration Rights Agreement. The Holder shall have the right to
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include the Shares to be issued upon exercise of this Warrant in a registration
statement to be filed under the Securities Act in accordance with the terms and
provisions of a registration rights agreement (the "Registration Rights
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Agreement").
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7.02 Compliance. This Warrant, the Shares, and all other securities issued
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or issuable upon exercise of this Warrant, may not be offered, sold or
transferred in whole or in part, except in compliance with the Securities Act,
and except in compliance with all applicable state securities statutes.
7.03 Legend. In the event at the time of exercise of this Warrant, the
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Shares are not included in an effective registration statement filed under the
Securities Act, the Company may cause the following legend, or its equivalent,
to be set forth on each certificate representing the Shares being issued upon
such exercise, or any other security issued or issuable upon exercise of this
Warrant:
"The securities represented by this Certificate have not been
registered under the Securities Act of 1933 and are `restricted
securities' as that term is defined in Rule 144 under the Act. The
securities may not be offered for sale, sold or otherwise transferred
except pursuant to an effective registration statement under the Act
or pursuant to an exemption from registration under the Act, the
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availability of which is to be established to the satisfaction of the
Company."
8. OTHER PROVISIONS RELATING TO RIGHTS OF THE HOLDER.
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8.01 Rights of the Holder. The Holder shall not be entitled to any rights
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as a stockholder in the Company by reason of this Warrant, either at law or
equity, except as specifically provided for herein. The Company covenants,
however, that for so long as this Warrant is at least partially unexercised, it
will furnish the Holder with copies of all reports and communications furnished
to the stockholders of the Company.
8.02 Fractional Shares. No fractional Shares or scrip representing
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fractional shares shall be issued upon the exercise of all or any part of this
Warrant. With respect to any fraction of a Share called for upon any exercise of
this Warrant, the number of Shares to be issued shall be rounded up or down to
the nearest whole Share.
8.03 Shares to be Fully Paid. The Company covenants that all Shares that
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may be issued and delivered to the Holder upon the exercise of this Warrant and
payment in full of the Exercise Price will, upon such delivery, be validly and
duly issued, fully paid and nonassessable.
9. NOTICES.
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All notices, certificates, requests, or other similar items provided for in
this Warrant shall be in writing and shall be personally delivered or deposited
in the United States mail, postage prepaid, addressed to the respective party as
indicated in the portions of this Warrant preceding Section 1. All notices shall
be deemed to be delivered upon personal delivery or upon the expiration of three
(3) business days following deposit in the United States mail, postage prepaid.
The addresses of the parties may be changed by written notice delivered pursuant
to this Section 9.
10. MISCELLANEOUS PROVISIONS.
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10.01 Binding. Subject to the terms and conditions contained herein, this
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Warrant shall be binding on the Company and its successors and assigns, and
shall inure to the benefit of the original Holder, his successors, assigns heirs
and administrators.
10.02 Entire Agreement. This Warrant and the Exhibits and the Schedule
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hereto contain the entire understanding between the Company and the Holder of
this Warrant in respect of the subject matter herein, and supersede all prior
agreements and understandings between the parties hereto with respect to the
subject matter herein. This Warrant cannot be changed or terminated or any
performance or condition waived in whole or in part except by an agreement in
writing signed by the party against whom enforcement of the change, termination
or waiver is sought.
10.03 Applicable Law. This Warrant shall be governed by and construed in
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accordance with the laws of the State of Delaware.
10.04 Legality. If any provision of this Warrant shall be held to be
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invalid, illegal or unenforceable, such provision shall be severed, enforced to
the extent possible, or modified in such a way as to make it enforceable, and
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the invalidity, illegality or unenforceability shall not affect the remainder of
this Warrant.
Further Assurances. The Company agrees to execute such further agreements,
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conveyances, certificates and other documents as may be reasonably requested by
the Holder to effectuate the intent and provisions of this Warrant.
10.05 Construction. The section headings used in this Warrant are for
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convenience only and shall not be taken or construed to define or limit any of
the terms or provisions of this Warrant. Unless otherwise provided, or unless
the context shall otherwise require, the use of the singular shall include the
plural and the use of any gender shall include all genders.
Date: February 1, 2001
PALADYNE CORP.
By: /s/ John D. Foster
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John D. Foster, Chairman
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SCHEDULE 1
PRESENTLY OUTSTANDING oPTIONS AND WARRANTS
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EXHIBIT A
NOTICE OF EXERCISE
(To be executed by a Holder desiring to exercise the right to purchase Shares
pursuant to a Warrant.)
The undersigned Holder of the Warrant hereby:
(a) Irrevocably elects to exercise the Warrant to the extent of
purchasing Shares;
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(b) Makes payment in full of the aggregate Exercise Price for those
Shares in the amount of $ by wire transfer or the delivery of
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certified funds or a bank cashier's check payable to the Company;
(c) Requests that a certificate for such Shares be issued in the name
of the undersigned, or, if the name and address of some other person is
specified below, in the name of such other person:
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(Name, address and tax identification number of person other
than the undersigned in whose name Shares are to be
registered.)
(d) Requests, if the number of Shares purchased are not all the Shares
purchasable pursuant to the unexercised portion of the Warrant, that a new
Warrant of like tenor for the remaining Shares purchasable pursuant to the
Warrant be issued and delivered to the undersigned at the address stated below.
In the event the Shares to be purchased are not included in an effective
registration statement filed under the Securities Act, the Holder acknowledges
and understands that:
(i) The Shares have not been registered under the Securities Act, or any
state securities laws or regulations in reliance upon exemptions of Section 4(2)
of the Securities Act and Regulation D thereunder, and similar exemptions under
state laws;
(ii) The Holder will not sell or otherwise transfer the Shares unless they
are registered or are exempt from registration under the Securities Act, such as
by reason of Rule 144 thereunder which requires, among other things, a one (1)
year holding period, and under any applicable state securities laws or
regulations;
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(iii) The Holder is acquiring the Shares for his own account for investment
purposes only, and not with a view to, or for, resale or distribution;
(iv) The Holder is an "accredited investor" as defined in Rule 501(a) of
Regulation D under the Securities Act; and
(v) The Holder has received and reviewed current public information about
the Company.
Dated:
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Signature
(This signature must conform in all
respects to the name of the Holder as
specified on the face of the Warrant.)
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Printed Name
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Social Security Number or Employer ID
Number
Address:
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Warrant No.:
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EXHIBIT B
NOTICE OF NET ISSUANCE
To:
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1. The undersigned hereby elects to purchase that number of shares of
Common Stock of Paladyne Corp. which equals ( %) percent of the value
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of the attached Warrant, determined in accordance with the terms of Section
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of the attached Warrant permitting exercise without cash payment.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below:
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(Name)
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(Address)
3. The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares.
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(Signature)
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(Date)
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EXHIBIT C
ASSIGNMENT FORM
(To be executed by a Holder desiring to assign his Warrants.)
FOR VALUE RECEIVED, the undersigned, ,
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hereby sells, assigns and transfers unto:
Name:
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(Please type or print in block letters.)
Address:
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Social Security Number or Employer ID Number:
the right to purchase shares (the "Shares") of Paladyne Corp.
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(the "Company") pursuant to the terms and conditions of the Warrant held by the
undersigned. The undersigned hereby authorizes and directs the Company (i) to
issue and deliver to the above-named assignee at the above address a new Warrant
pursuant to which the rights to purchase being assigned may be exercised, and
(ii) if there are rights to purchase Shares remaining pursuant to the
undersigned's Warrant after the assignment contemplated herein, to issue and
deliver to the undersigned at the address stated below a new Warrant evidencing
the right to purchase the number of Shares remaining after issuance and delivery
of the Warrant to the above-named assignee. Except for the number of Shares
purchasable, the new Warrant to be issued and delivered by the Company is to
contain the same terms and conditions as the undersigned's Warrant. This
Assignment is subject to receipt by the Company of such investment
representations by the assignee, as may be reasonably required under the
Securities Act of 1933, as amended.
Dated:
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Signature
(This signature must conform in all
respects to the name of the Holder as
specified on the face of the Warrant.)
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Printed Name
Address:
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Warrant No.:
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15
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
16