EXHIBIT 10.2
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Void after September 28, 2012 Warrant No. W-2
THIS SECURITY AND ANY SHARES ISSUED UPON THE EXERCISE OR CONVERSION OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY
LAWS.
THINKENGINE NETWORKS, INC.
COMMON STOCK PURCHASE WARRANT
ThinkEngine Networks, Inc. (the "Company"), having its principal office
as of the date hereof at 000 Xxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000,
hereby certifies that, for value received, Sand Hill Finance, LLC or registered
assigns, is entitled, subject to the terms and conditions set forth below, to
purchase from the Company at any time on or from time to time after American
Stock Exchange approval of an additional listing application of the shares
underlying this warrant and before 5:00 P.M., New York City time, on September
28, 2012 (the "Expiration Date"), Twenty-One Thousand Two Hundred and
Seventy-Six (21,276) fully paid and non-assessable shares of Common Stock (as
defined below), at the initial Purchase Price per share (as defined below) of
$1.88. The number of such shares of Common Stock and the Purchase Price per
share are subject to adjustment as provided in Section 5.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
"Aggregate Purchase Price" has the meaning set forth in
Section 3.1.
"AMEX" means the American Stock Exchange, Inc.
"Board of Directors" means the board of directors of the
Company.
"Business Day" means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.
"Company" includes the Company and any corporation which shall
succeed to or assume the obligations of the Company hereunder. The term
"corporation" shall include an association, joint stock company, business trust,
limited liability company or other similar organization.
"Common Stock" means the Company's Common Stock, $0.001 par
value per share, authorized as of the date hereof, and any stock of any class or
classes (however designated) hereafter authorized upon reclassification thereof,
which, if the Board of Directors declares any dividends or distributions, has
the right to participate in the distribution of earnings and assets of the
Company after the payment of dividends or other distributions on any shares of
capital stock of the Company entitled to a preference and in the voting for the
election of directors of the Company.
"Exchange Act" means the Securities Exchange Act of 1934 as
the same shall be in effect at the time.
"Holder" means any record owner of Warrants or Underlying
Securities.
"Market Price" means at any date (i) if the principal trading
market for such securities is AMEX or another exchange, the closing price per
share for the trading day, as officially reported on any consolidated tape, (ii)
if the principal market for such securities is the over-the-counter market, the
closing sale price per share on the trading day in which a sale was reported as
set forth by Nasdaq or, (iii) if the security is not listed on another exchange
or Nasdaq, the closing sale price per share on the last trading day in which a
sale was reported as set forth in the National Quotation Bureau sheet listing
such securities for such day. Notwithstanding the foregoing, if there is no
reported price, as the case may be, reported on any of the ten trading days
preceding the event requiring a determination of Market Price hereunder, then
the Market Price shall be determined in good faith by resolution of the Board of
Directors.
"Nasdaq" means the Nasdaq Capital Market or Nasdaq Global
Market.
"Notice" has the meaning set forth in Section 21.
"Original Issue Date" means September 28, 2007.
"Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other Person (corporate or
otherwise) which the Holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 or 6.
"Person" means any individual, sole proprietorship,
partnership, corporation, limited liability company, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity, any university or similar institution, or any government or any
agency or instrumentality or political subdivision thereof.
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"Purchase Price per share" means $1.88 per share, as may be
adjusted from time to time in accordance with Section 5 or 6.
"registered" and "registration" refer to a registration
effected by filing a registration statement in compliance with the Securities
Act, to permit the disposition of Underlying Securities issued or issuable upon
the exercise of Warrants, and any post-effective amendments and supplements
filed or required to be filed to permit any such disposition.
"Securities Act" means the Securities Act of 1933 as the same
shall be in effect at the time.
"Underlying Securities" means any Common Stock or Other
Securities issued or issuable upon exercise of Warrants.
"Warrant" means, as applicable, (i) the Warrant dated as of
the date hereof, evidencing rights to purchase up to an aggregate of 21,276
shares of Common Stock, and all Warrants issued upon transfer, division or
combination of, or in substitution for, any thereof (all Warrants shall at all
times be identical as to terms and conditions and date, except as to the number
of shares of Common Stock for which they may be exercised) or (ii) each right as
set forth in this Warrant to purchase one share of Common Stock, as adjusted
from time to time in accordance with Section 5 or 6.
1. Registration Rights. If at any time when there is not an
effective registration statement covering all of the Underlying Securities, the
Company shall determine to prepare and file with the Securities and Exchange
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Underlying Securities
written notice of such determination and, if within seven (7) Business Days
after receipt of such notice, any such Holder shall so request in writing (which
request shall specify the Underlying Securities intended to be disposed of by
the Holder), the Company will cause the registration under the Securities Act of
all Underlying Securities which the Company has been so requested to register by
the Holder, to the extent required to permit the disposition of the Underlying
Securities so to be registered, provided that if at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such Holder and, thereupon, (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Underlying Securities in connection with such registration, and
(ii) in the case of a determination to delay registering, shall be permitted to
delay registering any Underlying Securities being registered pursuant to this
Section 1 for the same period as the delay in registering such other securities.
The Company shall include in such registration statement all or any part of such
Underlying
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Securities such Holder requests to be registered. In the case of an underwritten
public offering, if the managing underwriter(s) or underwriter(s) should
reasonably object to the inclusion of the Underlying Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Underlying
Securities, would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Underlying Securities of the
Holders, then (x) the number of Underlying Securities of the Holders included in
such registration statement shall be reduced pro-rata among such Holders (based
upon the number of Underlying Securities requested to be included in the
registration), if the Company after consultation with the underwriter(s)
recommends the inclusion of fewer Underlying Securities, or (y) none of the
Underlying Securities of the Holders shall be included in such registration
statement, if the Company after consultation with the underwriter(s) recommends
the inclusion of none of such Underlying Securities; provided, however, that if
securities are being offered for the account of other persons or entities as
well as the Company, such reduction shall not represent a greater fraction of
the number of Underlying Securities intended to be offered by the Holders than
the fraction of similar reductions imposed on such other persons or entities
(other than the Company).
2. Sale or Exercise Without Registration. If, at the time of
any exercise, transfer or surrender for exchange of a Warrant or of Underlying
Securities previously issued upon the exercise of Warrants, such Warrant or
Underlying Securities shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such exercise, transfer or
exchange, that the Holder or transferee of such Warrant or Underlying
Securities, as the case may be, furnish to the Company an opinion of counsel,
reasonably satisfactory to the Company, to the effect that such exercise,
transfer or exchange may be made without registration under the Securities Act.
3. Exercise of Warrant.
3.1. Exercise in Full. Subject to the provisions
hereof, this Warrant may be exercised in full by the Holder hereof by
surrender of this Warrant, with the form of subscription at the end
hereof duly executed by such Holder, to the Company at its the
principal office of the Company set forth at the head of this Warrant
(or such other location as the Company from time to time may advise the
Holder in writing), accompanied by payment, (i) in cash or by certified
or official bank check payable to the order of the Company, in the
amount obtained (the "Aggregate Purchase Price") by multiplying (a) the
number of shares of Common Stock then issuable upon exercise of this
Warrant by (b) the Purchase Price per share on the date of such
exercise or (ii) by the surrender and cancellation of a portion of
shares of Common Stock then held by the Holder or issuable upon
exercise of this Warrant, which shall be valued and credited toward the
total Aggregate Purchase Price due the Company for the exercise of the
Warrant based upon the Market Price of the Common Stock on the date of
exercise.
3.2. Partial Exercise. Subject to the provisions
hereof, this Warrant may be exercised in part by surrender of this
Warrant in the manner and at the place provided in Section 3.1 except
that the amount payable by the Holder upon any partial
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exercise shall be the amount obtained by multiplying (a) the number of
shares of Common Stock designated by the Holder in the subscription at
the end hereof by (b) the Purchase Price per share on the date of such
exercise. Upon any such partial exercise, the Company at its expense
shall forthwith issue and deliver to or upon the order of the Holder
hereof a new Warrant or Warrants of like tenor, in the name of the
Holder hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes and subject to the provisions of Section 2)
may request, calling in the aggregate on the face or faces thereof for
the number of shares of Common Stock equal to the number of such
shares issuable prior to such partial exercise of this Warrant minus
the number of such shares designated by the Holder in the subscription
at the end hereof.
3.3. Company to Reaffirm Obligations. The Company
shall, at the time of any exercise of this Warrant, upon the request of
the Holder hereof, acknowledge in writing its continuing obligation to
afford to such Holder any rights (including, without limitation, any
right to registration of the Underlying Securities, if any) to which
such Holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant; provided, however, that
if the Holder of this Warrant shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to
afford such Holder any such rights.
3.4. Certain Exercises. If an exercise of this
Warrant is to be made in connection with a registered public offering
or sale of the Company, such exercise may, at the election of the
Holder, be conditioned on the consummation of the public offering or
sale of the Company, in which case such exercise shall not be deemed
effective until the consummation of such transaction.
4. Delivery of Stock Certificates on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, the Company
at its own expense (including the payment by it of any applicable issue taxes)
shall cause to be issued in the name of and delivered to the Holder hereof, or
as such Holder (upon payment by such Holder of any applicable transfer taxes and
subject to the provisions of Section 2) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Common
Stock or other Securities to which such Holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current Market Price of one full share.
5. Adjustment for Dividends.
(a) In case at any time or from time to time after the
Original Issue Date, the Company shall at any time declare or pay a dividend
upon its Common Stock payable in shares of Common Stock, the Purchase Price per
share in effect immediately prior to such dividend shall be proportionately
reduced.
(b) If the number of shares of Common Stock outstanding
at any time after the Original Issue Date is decreased by a combination or
reverse stock split of the outstanding shares of Common Stock, the Purchase
Price per share shall be increased in
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proportion to such decrease. If the number of shares of Common Stock outstanding
at any time after the Original Issue Date is increased by a forward stock split
of the outstanding shares of Common Stock or otherwise, the Purchase Price per
share shall be decreased in proportion to such increase.
(c) Upon each adjustment to the Purchase Price per
share, the Holder of this Warrant shall thereafter be entitled to purchase, at
the Purchase Price per share resulting from such adjustment, the number of
shares of Common Stock obtained by multiplying the Purchase Price per share in
effect immediately prior to such adjustment by the number of shares of Common
Stock purchasable pursuant hereto immediately prior to such adjustment, and
dividing the product thereof by the Purchase Price per share resulting from such
adjustment.
6. Reorganization, Consolidation, Merger, etc. In case the
Company after the Original Issue Date shall (a) effect a reorganization, (b)
consolidate with or merge into any other Person, or (c) transfer all or
substantially all of its properties or assets to any other Person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the Holder of this Warrant, upon the exercise hereof as provided in
Section 3 at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall be entitled to receive (and the Company or its successors or
assigns shall be entitled to deliver), in lieu of the Underlying Securities
issuable upon such exercise prior to such consummation or such effective date,
the stock and other securities and property (including cash) to which such
Holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such Holder had so exercised this
Warrant immediately prior thereto. Upon receipt of such stock and other
securities and property (including cash), if any, the rights of the Holder under
this Warrant shall terminate and cease and this Warrant shall expire and be of
no force and effect. In any such case, the Company (or its successors or
assigns) shall be entitled to make appropriate adjustments in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after such reorganization, merger, consolidation or dissolution.
7. Further Assurances; Reports. The Company shall take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable shares of Underlying
Securities upon the exercise of all Warrants from time to time outstanding. For
so long as the Holder holds this Warrant, the Company shall deliver to the
Holder contemporaneously with delivery to the holders of Common Stock, a copy of
each report of the Company delivered to such holders.
8. Certificate as to Adjustments. In each case of any
adjustment or readjustment in the Underlying Securities, the Company shall, upon
request, at its expense, promptly cause its Chief Financial Officer to compute
such adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, and the
number of shares of Common Stock or Other Securities outstanding or deemed to be
outstanding. The Company shall forthwith mail a copy of each such certificate to
the Holder.
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9. Notices of Record Date. In the event of
(a) any taking by the Company of a record of its
stockholders for the purpose of determining the stockholders
thereof who are entitled to receive any dividend or other
distribution (other than a quarterly dividend payable solely in
cash), or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities
or property, or to receive any other right, or for the purpose
of determining stockholders who are entitled to vote in
connection with any proposed capital reorganization of the
Company, any reclassification or recapitalization of the capital
stock of the Company or any transfer of all or substantially all
the assets of the Company to or consolidation or merger of the
Company with or into any other Person, or
(b) any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then and in each such event the Company shall mail or cause to be mailed to each
Holder of a Warrant a notice specifying (i) the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right and (ii) the
date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up is to
take place, and the time, if any, as of which the Holders of record of
Underlying Securities shall be entitled to exchange their shares of Underlying
Securities for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up. Such notice shall be mailed at
least 20 days prior to the date therein specified.
10. Reservation of Stock Issuable on Exercise of Warrants. The
Company shall at all times reserve and keep available, solely for issuance and
delivery upon the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of the Warrants.
11. Listing on Securities Exchanges; Registration; Issuance of
Certain Securities. In furtherance and not in limitation of any other provision
of this Warrant, if the Company at any time shall list any Common Stock (or
Other Securities) on any national securities exchange or Nasdaq, the Company
shall, at its expense, simultaneously list the Underlying Securities from time
to time issuable upon the exercise of the Warrants on such exchange or Nasdaq,
upon official notice of issuance.
12. Exchange of Warrants. Subject to the provisions of Section
2, upon surrender for exchange of this Warrant, properly endorsed, to the
Company, as soon as practicable the Company at its own expense shall issue and
deliver to or upon the order of the Holder thereof a new Warrant or Warrants of
like tenor, in the name of such Holder or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face of this Warrant so surrendered.
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13. Replacement of Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company at its expense shall
execute and deliver, in lieu thereof, a new Warrant of like tenor.
14. Warrant Agent. The Company may, by written notice to each
Holder of a Warrant, appoint an agent having an office in New York, New York,
for the purpose of issuing Common Stock (or Other Securities) upon the exercise
of the Warrants pursuant to Section 3, exchanging Warrants pursuant to Section
12, and replacing Warrants pursuant to Section 13, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
15. Remedies. The Company stipulates that the remedies at law
of the Holder of this Warrant in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant may not be adequate, and that such terms may be specifically enforced by
a decree for the specific performance of any agreement contained herein or by an
injunction that may be sought against a violation of any of the terms hereof or
otherwise.
16. No Rights as Stockholder. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a stockholder of the
Company prior to the exercise hereof.
17. Negotiability. Subject to Section 2, this Warrant is
issued upon the following terms, to all of which each Holder or owner hereof by
the taking hereof consents and agrees that:
(a) subject to the provisions of this Warrant, title
to this Warrant may be transferred by endorsement (by the
Holder hereof executing the form of assignment at the end
hereof); and
(b) until this Warrant is transferred on the books of
the Company, the Company may treat the registered Holder
hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
18. Entire Agreement; Successors and Assigns. This Warrant
constitutes the entire contract between the parties relative to the subject
matter hereof. This Warrant supersedes any previous agreement among the parties
with respect to the subject matter hereof. The terms and conditions of this
Warrant shall inure to the benefit of and be binding upon the respective
permitted executors, administrators, heirs, successors and assigns of the
parties. Nothing in this Warrant, expressed or implied, is intended to confer
upon any party, other than the Holder and the Company, any rights, remedies,
obligations or liabilities under or by reason of this Warrant.
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19. Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
principles of conflicts of law.
20. Headings. The headings of the sections of this Warrant are
for convenience and shall not by themselves determine the interpretation of this
Warrant.
21. Notices. Any notice or other communication required or
permitted to be given hereunder (each a "Notice") shall be given in writing and
shall be made by personal delivery or sent by courier or certified or registered
first-class mail (postage pre-paid), addressed to a party at its address shown
below or at such other address as such party may designate by three days'
advance Notice to the other party.
Any Notice to the Holder shall be sent to the address for such
Xxxxxx set forth on books and records of the Company.
Any Notice to the Company shall be sent to:
ThinkEngine Networks, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Each Notice shall be deemed given and effective upon receipt
(or refusal of receipt).
22. Severability. Whenever possible, each provision of this
Warrant shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be deemed prohibited
or invalid under such applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, and such prohibition or invalidity
shall not invalidate the remainder of such provision or any other provision of
this Warrant.
23. Amendments and Waivers. Any provision of this Warrant may
be amended and the observance of any provision of this Warrant may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder of
the Warrant.
24. Construction. Words (including capitalized terms defined
herein) in the singular shall be held to include the plural and vice versa as
the context requires. The words "herein", "hereinafter", "hereunder" and words
of similar import used in this Warrant shall, unless otherwise stated, refer to
this Warrant as a whole and not to any particular provision of this Warrant. All
references to "$" in this Warrant and the other agreements contemplated hereby
shall refer to United States dollars (unless otherwise specified expressly). Any
reference to any gender includes the other genders.
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25. Assignability. Subject to Section 2, this Warrant is fully
assignable at any time.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the
date set forth below.
Dated: September 28, 2007
THINKENGINE NETWORKS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President and CEO
Attest: /s/ Xxxx X. Xxxxxxxxxxx
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: THINKENGINE NETWORKS, INC.
[The undersigned, the Holder of the within Warrant, hereby
irrevocably elects to exercise the purchase right represented by such Warrant
for, and to purchase thereunder, * shares of Common Stock of ThinkEngine
Networks, Inc., and herewith makes payment of $__________ and requests that the
certificates for such shares be issued in the name of, and delivered to,
___________________, whose address is _______________________.]
[The undersigned hereby elects to convert the attached Warrant
into Common Stock of ThinkEngine Networks, Inc. through "cashless exercise" in
the manner specified in the Warrant. This conversion is exercised with respect
to _____________________ of the shares of Common Stock covered by the Warrant as
set forth in calculations attached hereto.].
The undersigned represents that the undersigned is acquiring such
securities for its own account for investment and not with a view to or for sale
in connection with any distribution thereof (except for any resale pursuant to,
and in accordance with a valid registration statement effective under the
Securities Act of 1933). Dated:
------------------------------------------
(Signature must conform in all respects to
the name of the Holder as specified on the
face of the Warrant)
------------------------------------------
(Address)
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised).
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FORM OF ASSIGNMENT
(To be signed by the Holder only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto _________________________ the right represented by the within
Warrant to purchase _________ shares of Common Stock of ThinkEngine Networks,
Inc. to which the within Warrant relates, and hereby does irrevocably constitute
and appoint ______________________________ Attorney to transfer such right on
the books of ThinkEngine Networks, Inc. with full power of substitution in the
premises.
Dated: _____________
------------------------------------------
(Signature must conform in all respects to
name of Xxxxxx as specified on the face of
the Warrant)
------------------------------------------
(Address)
Signature guaranteed by a bank or
trust company having its principal
office in New York City or by a
Member Firm of the New York Stock
Exchange or American Stock Exchange
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