EXHIBIT 4.3
WARRANT AGREEMENT
BETWEEN
I-SECTOR CORPORATION
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
DATED AS OF MAY __, 2004
WARRANT AGREEMENT
This Agreement, dated as of May __, 2004, is between I-Sector
Corporation, a Delaware corporation (the "Company") and American Stock Transfer
& Trust Company, a New York corporation (the "Warrant Agent").
RECITALS
A. The Company, at or about the time that it is entering into
this Agreement, proposes to issue and sell to public investors up to 575,000
Units (together with the additional units issuable as provided herein, the
"Units"). Each Unit consists of two shares of common stock, $0.01 par value, of
the Company (the "Common Stock") and one warrant (a "Warrant"). Each Warrant is
exercisable to purchase one share of Common Stock upon the terms and conditions
and subject to adjustment in certain circumstances, all as set forth in this
Agreement.
B. The Company proposes to issue to the Representative of the
Underwriters in the public offering of Units referred to above warrants to
purchase up to 50,000 additional Units.
C. The Company wishes to retain the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of the certificates
evidencing the Warrants to be issued under this Agreement (the "Warrant
Certificates") and the exercise of the Warrants;
D. The Company and the Warrant Agent wish to enter into this
Agreement to set forth the terms and conditions of the Warrants and the rights
of the holders thereof ("Warrantholders") and to set forth the respective rights
and obligations of the Company and the Warrant Agent. Each Warrantholder is an
intended beneficiary of this Agreement with respect to the rights of
Warrantholders herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions in
this Agreement and the Warrant Agent accepts such appointment.
2. Date, Denomination and Execution of Warrant Certificates.
(a) The Warrant Certificates (and the Form of Election to
Purchase and the Form of Assignment to be printed on the reverse thereof) shall
be in registered form only and shall be substantially of the tenor and purport
recited in Exhibit A hereto, and may have such letters, numbers or other marks
of identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law, or with any rule or regulation made pursuant
thereto, or with any rule or regulation of any stock exchange on which the
Common Stock or the Warrants may be listed or
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any automated quotation system, or to conform to usage. Each Warrant Certificate
shall entitle the registered holder thereof, subject to the provisions of this
Agreement and of the Warrant Certificate, to purchase, on or after ____________,
2004 and on or before the close of business on _________, 2009 (the "Expiration
Date"), one fully paid and non-assessable share of Common Stock for each Warrant
evidenced by such Warrant Certificate for $_____. The exercise price of the
Warrants (the "Exercise Price") is subject to adjustments as provided in Section
6 hereof. Each Warrant Certificate issued as a part of a Unit offered to the
public as described in the recitals, above, shall be dated _____________, 2004;
each other Warrant Certificate shall be dated the date on which the Warrant
Agent receives valid issuance instructions from the Company or a transferring
holder of a Warrant Certificate or, if such instructions specify another date,
such other date.
(b) For purposes of this Agreement, the term "close of
business" on any given date shall mean 5:00 p.m., Eastern time, on such date;
provided, however, that if such date is not a business day, it shall mean 5:00
p.m., Eastern time, on the next succeeding business day. For purposes of this
Agreement, the term "business day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in New York, New York or in the
State in which the Warrant Agent maintains the principal office in which it
conducts business related to the Warrants are authorized or obligated by law to
be closed.
(c) Each Warrant Certificate shall be executed on behalf
of the Company by the Chairman of the Board, is Chief Executive Officer, its
President or a Vice President, either manually or by facsimile signature printed
thereon, and have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. Each Warrant Certificate
shall be countersigned (either manually or by facsimile signature printed
thereon) by the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
Warrant Certificate shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof by the
Company, such Warrant Certificate, nevertheless, may be countersigned by the
Warrant Agent, issued and delivered with the same force and effect as though the
person who signed such Warrant Certificate had not ceased to be such officer of
the Company.
3. Subsequent Issue of Warrant Certificates. Subsequent to their
original issuance, no Warrant Certificates shall be reissued except (i) Warrant
Certificates issued upon transfer thereof in accordance with Section 4 hereof,
(ii) Warrant Certificates issued upon any combination, split-up or exchange of
Warrant Certificates pursuant to Section 4 hereof, (iii) Warrant Certificates
issued in replacement of mutilated, destroyed, lost or stolen Warrant
Certificates pursuant to Section 5 hereof, (iv) Warrant Certificates issued upon
the partial exercise of Warrant Certificates pursuant to Section 7 hereof, and
(v) Warrant Certificates issued to reflect any adjustment or change in the
Exercise Price or the number or kind of shares purchasable thereunder pursuant
to Section 22 hereof. The Warrant Agent is hereby irrevocably authorized to
countersign and deliver, in accordance with the provisions of said Sections 4,
5, 7 and 22, the new Warrant Certificates required for purposes thereof, and the
Company, whenever required by the Warrant Agent, will supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such
purposes.
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4. Transfers and Exchanges of Warrant Certificates.
(a) The Warrant Agent will keep or cause to be kept books
for registration of ownership and transfer of the Warrant Certificates issued
hereunder. Such registers shall show the names and addresses of the respective
holders of the Warrant Certificates and the kind and number of Warrants
evidenced by each such Warrant Certificate.
(b) The Warrant Agent shall, from time to time, register
the transfer of any outstanding Warrants upon the books to be maintained by the
Warrant Agent for that purpose, upon surrender of the Warrant Certificate
evidencing such Warrants, with the Form of Assignment duly filled in and
executed with such signature guaranteed by an eligible institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program pursuant to SEC Rule 17Ad-15)
or NASD member and such supporting documentation as the Warrant Agent or the
Company may reasonably require, to the Warrant Agent at its stock transfer
office in Manhattan, New York, at any time on or before the Expiration Date of
such Warrant, and upon payment to the Warrant Agent for the account of the
Company of an amount equal to any applicable transfer tax. Payment of the amount
of such tax may be made in cash, or by certified or official bank check, payable
in lawful money of the United States of America to the order of the Company.
(c) Upon receipt of a Warrant Certificate, with the Form
of Assignment duly filled in and executed, accompanied by payment of an amount
equal to any applicable transfer tax, the Warrant Agent shall promptly cancel
the surrendered Warrant Certificate and countersign and deliver to the
transferee a new Warrant Certificate for the number of full Warrants transferred
to such transferee; provided, however, that in case the registered holder of any
Warrant Certificate shall elect to transfer fewer than all of the Warrants
evidenced by such Warrant Certificate, the Warrant Agent in addition shall
promptly countersign and deliver to such registered holder a new Warrant
Certificate or Certificates for the number of full Warrants not so transferred.
(d) Any Warrant Certificate or Certificates may be
exchanged at the option of the holder thereof for another Warrant Certificate or
Certificates of different denominations, of like tenor and representing in the
aggregate the same kind and number of Warrants, upon surrender of such Warrant
Certificate or Certificates, with the Form of Assignment duly filled in and
executed, to the Warrant Agent, at any time or from time to time after the close
of business on the date hereof and prior to the close of business on the
Expiration Date relating to such Warrant. The Warrant Agent shall promptly
cancel the surrendered Warrant Certificate and deliver the new Warrant
Certificate pursuant to the provisions of this Section.
5. Mutilated, Destroyed, Lost or Stolen Warrant Certificates.
Upon receipt by the Company and the Warrant Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of any
Warrant Certificate, and in the case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to them of all
reasonable expenses incidental thereto, and, in the case of mutilation, upon
surrender and cancellation of the Warrant Certificate, the Warrant Agent shall
countersign and deliver a new Warrant Certificate of like tenor for the same
kind and number of Warrants.
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6. Adjustments of Number and Kind of Shares Purchasable and
Exercise Price. The number and kind of securities or other property purchasable
upon exercise of a Warrant shall be subject to adjustment from time to time upon
the occurrence, after the date hereof, of any of the following events:
(a) In case the Company shall (1) pay a dividend in, or
make a distribution of, shares of capital stock on its outstanding Common Stock,
(2) subdivide its outstanding shares of Common Stock into a greater number of
such shares or (3) combine its outstanding shares of Common Stock into a smaller
number of such shares, the total number of shares of Common Stock purchasable
upon the exercise of each Warrant outstanding immediately prior thereto shall be
adjusted so that the holder of any Warrant Certificate thereafter surrendered
for exercise shall be entitled to receive at the same aggregate Exercise Price
the number of shares of capital stock (of one or more classes) which such holder
would have owned or have been entitled to receive immediately following the
happening of any of the events described above had such Warrant been exercised
in full immediately prior to the record date with respect to such event. Any
adjustment made pursuant to this Subsection shall, in the case of a stock
dividend or distribution, become effective as of the record date therefor and,
in the case of a subdivision or combination, be made as of the effective date
thereof. If, as a result of an adjustment made pursuant to this Subsection, the
holder of any Warrant Certificate thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose determination shall be
conclusive and shall be evidenced by a Board resolution filed with the Warrant
Agent) shall determine the allocation of the adjusted Exercise Price between or
among shares of such classes of capital stock.
(b) In the event of a capital reorganization or a
reclassification of the Common Stock (except as provided in Subsection (a) above
or Subsection (d) below), any Warrantholder, upon exercise of Warrants, shall be
entitled to receive, in substitution for the Common Stock to which he would have
become entitled upon exercise immediately prior to such reorganization or
reclassification, the shares (of any class or classes) or other securities or
property of the Company (or cash) that he would have been entitled to receive at
the same aggregate Exercise Price upon such reorganization or reclassification
if such Warrants had been exercised immediately prior to the record date with
respect to such event; and in any such case, appropriate provision (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and shall be evidenced by a certified Board resolution filed with
the Warrant Agent) shall be made for the application of this Section 6 with
respect to the rights and interests thereafter of the Warrantholders (including
but not limited to the allocation of the Exercise Price between or among shares
of classes of capital stock), to the end that this Section 6 (including the
adjustments of the number of shares of Common Stock or other securities
purchasable and the Exercise Price thereof) shall thereafter be reflected, as
nearly as reasonably practicable, in all subsequent exercises of the Warrants
for any shares or securities or other property (or cash) thereafter deliverable
upon the exercise of the Warrants.
(c) Whenever the number of shares of Common Stock or
other securities purchasable upon exercise of a Warrant is adjusted as provided
in this Section 6, the Company will promptly file with the Warrant Agent a
certificate signed by a Chairman or co-Chairman of the Board or the President or
a Vice President of the Company and by the Treasurer or Chief Financial Officer
or an Assistant Treasurer or the Secretary or an Assistant Secretary of the
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Company setting forth the number and kind of securities or other property
purchasable upon exercise of a Warrant, as so adjusted, stating that such
adjustments in the number or kind of shares or other securities or property
conform to the requirements of this Section 6, and setting forth a brief
statement of the facts accounting for such adjustments. Promptly after receipt
of such certificate, the Company, or the Warrant Agent at the Company's request,
will deliver, by first-class, postage prepaid mail, a brief summary thereof (to
be supplied by the Company) to the registered holders of the outstanding Warrant
Certificates; provided, however, that failure to file or to give any notice
required under this Subsection, or any defect therein, shall not affect the
legality or validity of any such adjustments under this Section 6; and provided,
further, that, where appropriate, such notice may be given in advance and
included as part of the notice required to be given pursuant to Section 12
hereof.
(d) In case of any consolidation of the Company with, or
merger of the Company into, another corporation (other than a consolidation or
merger which does not result in any reclassification or change of the
outstanding Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the corporation formed by such consolidation or merger or the
corporation which shall have acquired such assets, as the case may be, shall
execute and deliver to the Warrant Agent a supplemental warrant agreement
providing that the holder of each Warrant then outstanding shall have the right
thereafter (until the expiration of such Warrant) to receive, upon exercise of
such Warrant, solely the kind and amount of shares of stock and other securities
and property (or cash) receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the Company for
which such Warrant might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental warrant agreement
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section. The above provision of
this Subsection shall similarly apply to successive consolidations, mergers,
sales or transfers.
The Warrant Agent shall not be under any responsibility to determine
the correctness of any provision contained in any such supplemental warrant
agreement relating to either the kind or amount of shares of stock or securities
or property (or cash) purchasable by holders of Warrant Certificates upon the
exercise of their Warrants after any such consolidation, merger, sale or
transfer or of any adjustment to be made with respect thereto, but subject to
the provisions of Section 20 hereof, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, a
certificate of a firm of independent certified public accountants (who may be
the accountants regularly employed by the Company) with respect thereto.
(e) Irrespective of any adjustments in the number or kind
of shares issuable upon exercise of Warrants, Warrant Certificates theretofore
or thereafter issued may continue to express the same price and number and kind
of shares as are stated in the similar Warrant Certificates initially issuable
pursuant to this Warrant Agreement.
(f) The Company may retain a firm of independent public
accountants of recognized standing, which may be the firm regularly retained by
the Company, selected by the Board of Directors of the Company or the Executive
Committee of said Board, and not disapproved by the Warrant Agent, to make any
computation required under this Section, and a
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certificate signed by such firm shall, in the absence of fraud or gross
negligence, be conclusive evidence of the correctness of any computation made
under this Section.
(g) For the purpose of this Section, the term "Common
Stock" shall mean (i) the Common Stock or (ii) any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value. In the event that at any time as a result of an
adjustment made pursuant to this Section, the holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any 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 this
Section, and all other provisions of this Agreement, with respect to the Common
Stock, shall apply on like terms to any such other shares.
(h) The Company may, from time to time and to the extent
permitted by law, reduce the Exercise Price of the Warrants by any amount for a
period of not less than 20 days. If the Company so reduces the Exercise Price of
such Warrants, it will give not less than 15 days' notice of such decrease,
which notice may be in the form of a press release, and shall take such other
steps as may be required under applicable law in connection with any offers or
sales of securities at the reduced price.
7. Exercise and Redemption of Warrants. Unless the Warrants have
been redeemed as provided in this Section 7, the registered holder of any
Warrant Certificate may exercise the Warrants evidenced thereby, in whole at any
time or in part from time to time at or prior to the close of business, on the
Expiration Date relating to such Warrant, subject to the provisions of Section
8, at which time the Warrant Certificates shall be and become wholly void and of
no value. Warrants may be exercised by their holders or redeemed by the Company
as follows:
(a) Exercise of Warrants shall be accomplished upon
surrender of the Warrant Certificate evidencing such Warrants, with the Form of
Election to Purchase on the reverse side thereof duly filled in and executed, to
the Warrant Agent at its stock transfer office in Manhattan, New York, together
with payment to the Company of the Exercise Price (as of the date of such
surrender) of the Warrants then being exercised and an amount equal to any
applicable transfer tax and, if requested by the Company, any other taxes or
governmental charges which the Company may be required by law to collect in
respect of such exercise. Payment of the Exercise Price and other amounts may be
made by wire transfer of good funds, or by certified or bank cashier's check,
payable in lawful money of the United States of America to the order of the
Company. No adjustment shall be made for any cash dividends, whether paid or
declared, on any securities issuable upon exercise of a Warrant.
(b) Upon receipt of a Warrant Certificate, with the Form
of Election to Purchase duly filled in and executed, accompanied by payment of
the Exercise Price of the Warrants being exercised (and of an amount equal to
any applicable taxes or government charges as aforesaid), the Warrant Agent
shall promptly request from the Transfer Agent with respect to the securities to
be issued and deliver to or upon the order of the registered holder of such
Warrant Certificate, in such name or names as such registered holder may
designate, a certificate
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or certificates for the number of full shares of the securities to be purchased,
together with cash made available by the Company pursuant to Section 8 hereof in
respect of any fraction of a share of such securities otherwise issuable upon
such exercise. If the Warrant is then exercisable to purchase property other
than securities, the Warrant Agent shall take appropriate steps to cause such
property to be delivered to or upon the order of the registered holder of such
Warrant Certificate. In addition, if it is required by law and upon instruction
by the Company, the Warrant Agent will deliver to each Warrantholder a
prospectus which complies with the provisions of Section 10 of the Securities
Act of 1933 and the Company agrees to supply Warrant Agent with sufficient
number of prospectuses to effectuate that purpose.
(c) In case the registered holder of any Warrant
Certificate shall exercise fewer than all of the Warrants evidenced by such
Warrant Certificate, the Warrant Agent shall promptly countersign and deliver to
the registered holder of such Warrant Certificate, or to his duly authorized
assigns, a new Warrant Certificate or Certificates evidencing the number of
Warrants that were not so exercised.
(d) Each person in whose name any certificate for
securities is issued upon the exercise of Warrants shall for all purposes be
deemed to have become the holder of record of the securities represented thereby
as of, and such certificate shall be dated, the date upon which the Warrant
Certificate was duly surrendered in proper form and payment of the Exercise
Price (and of any applicable taxes or other governmental charges) was made;
provided, however, that if the date of such surrender and payment is a date on
which the stock transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares as of, and the
certificate for such shares shall be dated, the next succeeding business day on
which the stock transfer books of the Company are open (whether before, on or
after the Expiration Date relating to such Warrant) and the Warrant Agent shall
be under no duty to deliver the certificate for such shares until such date. The
Company covenants and agrees that it shall not cause its stock transfer books to
be closed for a period of more than 20 consecutive business days except upon
consolidation, merger, sale of all or substantially all of its assets,
dissolution or liquidation or as otherwise provided by law.
(e) At any time after the date that is 180 days after the
date of this Warrant Agreement, the Warrants outstanding at the time of a
redemption may be redeemed at the option of the Company, in whole or in part on
a pro-rata basis, by giving not less than 30 days prior notice as provided in
Section 7(f) below, which notice may not be given before, but may be given at
any time after, the last reported sale price of the Common Stock on the
principal exchange on which it is then traded has equaled or exceeded $______
per share on each of five consecutive trading days. The price at which Warrants
may be redeemed (the "Redemption Price") is $0.25 per Warrant. On and after the
redemption date the holders of record of redeemed Warrants shall be entitled to
payment of the Redemption Price upon surrender of such redeemed Warrants to the
Company at the office of the Warrant Agent designated for that purpose.
(f) Notice of redemption of Warrants shall be given at
least 30 days prior to the redemption date by mailing by first class mail,
postage prepaid, a copy of such notice to the Warrant Agent and to all of the
holders of record of Warrants at their respective addresses appearing on the
books or transfer records of the Company or such other address designated in
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writing by the holder of record to the Warrant Agent not less than 40 days prior
to the redemption date.
(g) From and after the redemption date, all rights of the
Warrantholders (except the right to receive the Redemption Price) shall
terminate, but only if (i) no later than one day prior to the redemption date
the Company shall have irrevocably deposited with the Warrant Agent as paying
agent a sufficient amount to pay on the redemption date the Redemption Price for
all Warrants called for redemption and (ii) the notice of redemption shall have
stated the name and address of the Warrant Agent and the intention of the
Company to deposit such amount with the Warrant Agent no later than one day
prior to the redemption date.
(h) On the Redemption Date, the Warrant Agent shall pay
to the holders of record of redeemed Warrants all monies received by the Warrant
Agent for the redemption of Warrants to which the holders of record of such
redeemed Warrants who shall have surrendered their Warrants are entitled. The
Warrant Agent shall have no obligation to pay for the redemption of the warrants
except to the extent that funds for such payment have been provided to it by the
Company.
(i) Any amounts deposited with the Warrant Agent that are
not required for redemption of Warrants may be withdrawn by the Company. Any
amounts deposited with the Warrant Agent that shall be unclaimed after six
months after the redemption date shall be redelivered back to the Company, and
thereafter the holders of the Warrants called for redemption for which such
funds were deposited shall look solely to the Company for payment. The Company
shall be entitled to the interest, if any, on funds deposited with the Warrant
Agent and the holders of redeemed Warrants shall have no right to any such
interest. At the instruction of the Company, the Warrant agent shall deposit or
invest any and all funds deposited with it by the Company in connection with any
redemption in interest bearing accounts with a financial institution or
institutions typically used by the Warrant Agent for such purpose, and the
Warrant Agent shall have no liability with respect to the performance of any
such investments other than, in the case of funds deposited in accounts
maintained by the Warrant Agent, the liability of the Warrant Agent to its
depositors in such accounts, generally.
(j) If the Company fails to make a sufficient deposit
with the Warrant Agent as provided above, the holder of any Warrants called for
redemption may at the option of the holder, and as such holder's exclusive
remedy, either (i) by notice to the Company declare the notice of redemption a
nullity as to such holder, or (ii) maintain an action against the Company for
the Redemption Price. If the holder brings such an action, the Company will pay
reasonable attorneys' fees of the holder. If the holder fails to bring an action
against the Company for the Redemption Price within 60 days after the redemption
date, the holder shall be deemed to have elected to declare the notice of
redemption to be a nullity as to such holder and such notice shall be without
any force or effect as to such holder. Except as otherwise specifically provided
in this Section 7(j), a notice of redemption, once mailed by the Company as
provided in Section 7(f) shall be irrevocable.
8. Fractional Interests. The Company shall not be required to
issue any Warrant Certificate evidencing a fraction of a Warrant or to issue
fractions of shares of securities on the exercise of the Warrants. If any
fraction (calculated to the nearest one-hundredth) of a Warrant
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or a share of securities would, except for the provisions of this Section, be
issuable on the exercise of any Warrant, the Company shall, at its option,
either purchase such fraction for an amount in cash equal to the current value
of such fraction computed on the basis of the closing market price (as quoted on
the principal exchange on which the Common Stock is traded) on the trading day
immediately preceding the day upon which such Warrant Certificate was
surrendered for exercise in accordance with Section 7 hereof or issue the
required fractional Warrant or share. By accepting a Warrant Certificate, the
holder thereof expressly waives any right to receive a Warrant Certificate
evidencing any fraction of a Warrant or to receive any fractional share of
securities upon exercise of a Warrant, except as expressly provided in this
Section 8.
9. Reservation of Equity Securities. The Company covenants that
it will at all times reserve and keep available, free from any pre-emptive
rights, out of its authorized and unissued equity securities, solely for the
purpose of issue upon exercise of the Warrants, such number of shares of equity
securities of the Company as shall then be issuable upon the exercise of all
outstanding Warrants ("Equity Securities"). The Company covenants that all
Equity Securities which shall be so issuable shall, upon such issue, be duly
authorized, validly issued, fully paid and non-assessable.
The Company covenants that if any equity securities, required to be
reserved for the purpose of issue upon exercise of the Warrants hereunder,
require registration with or approval of any governmental authority under any
federal or state law before such shares may be issued upon exercise of Warrants,
the Company will use all commercially reasonable efforts to cause such
securities to be duly registered, or approved, as the case may be, and, to the
extent practicable, take all such action in anticipation of and prior to the
exercise of the Warrants, including, without limitation, filing or maintaining
an appropriate registration statement, necessary to permit a public offering of
the securities underlying the Warrants at any and all times during the term of
this Agreement, provided, however, that in no event shall such securities be
issued, and the Company is authorized to refuse to honor the exercise of any
Warrant, if such exercise would result in the opinion of the Company's Board of
Directors, upon advice of counsel, in the violation of any law; and provided
further that, in the case of a Warrant exercisable solely for securities listed
on a securities exchange or for which there are at least three independent
market makers, in lieu of obtaining such registration or approval, the Company
may elect to redeem Warrants submitted to the Warrant Agent for exercise for a
price equal to the difference between the aggregate low asked price, or closing
price, as the case may be, of the securities for which such Warrant is
exercisable on the date of such submission and the Exercise Price of such
Warrants; in the event of such redemption, the Company will pay to the holder of
such Warrants the above-described redemption price in cash within 10 business
days after receipt of notice from the Warrant Agent that such Warrants have been
submitted for exercise.
10. Reduction of Conversion Price Below Par Value. Before taking
any action that would cause an adjustment pursuant to Section 6 hereof reducing
the portion of the Exercise Price required to purchase one share of capital
stock below the then par value (if any) of a share of such capital stock, the
Company will use its best efforts to take any corporate action which, in the
opinion of its counsel, may be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such capital stock.
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11. Payment of Taxes. The Company covenants and agrees that it
will pay when due and payable any and all federal and state documentary stamp
and other original issue taxes which may be payable in respect of the original
issuance of the Warrant Certificates, or any shares of Common Stock or other
securities upon the exercise of Warrants. The Company shall not, however, be
required (a) to pay any tax which may be payable in respect of any transfer
involved in the transfer and delivery of Warrant Certificates or the issuance or
delivery of certificates for Common Stock or other securities in a name other
than that of the registered holder of the Warrant Certificate surrendered for
purchase or (b) to issue or deliver any certificate for shares of Common Stock
or other securities upon the exercise of any Warrant Certificate until any such
tax shall have been paid, all such tax being payable by the holder of such
Warrant Certificate at the time of surrender.
12. Notice of Certain Corporate Action. In case the Company after
the date hereof shall propose (a) to offer to the holders of Common Stock,
generally, rights to subscribe to or purchase any additional shares of any class
of its capital stock, any evidences of its indebtedness or assets, or any other
rights or options or (b) to effect any reclassification of Common Stock (other
than a reclassification involving merely the subdivision or combination of
outstanding shares of Common Stock) or any capital reorganization, or any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company is required, or any sale, transfer or other
disposition of its property and assets substantially as an entirety, or the
liquidation, voluntary or involuntary dissolution or winding-up of the Company,
then, in each such case, the Company shall file with the Warrant Agent and the
Company, or the Warrant Agent on its behalf, shall mail (by first-class, postage
prepaid mail) to all registered holders of the Warrant Certificates notice of
such proposed action, which notice shall specify the date on which the books of
the Company shall close or a record be taken for such offer of rights or
options, or the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation, voluntary
or involuntary dissolution or winding-up shall take place or commence, as the
case may be, and which shall also specify any record date for determination of
holders of Common Stock entitled to vote thereon or participate therein and
shall set forth such facts with respect thereto as shall be reasonably necessary
to indicate any adjustments in the Exercise Price and the number or kind of
shares or other securities purchasable upon exercise of Warrants which will be
required as a result of such action. Such notice shall be filed and mailed in
the case of any action covered by clause (a) above, at least ten days prior to
the record date for determining holders of the Common Stock for purposes of such
action or, if a record is not to be taken, the date as of which the holders of
shares of Common Stock of record are to be entitled to such offering; and, in
the case of any action covered by clause (b) above, at least 20 days prior to
the earlier of the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation, voluntary
or involuntary dissolution or winding-up is expected to become effective and the
date on which it is expected that holders of shares of Common Stock of record on
such date shall be entitled to exchange their shares for securities or other
property deliverable upon such reclassification, reorganization, consolidation,
merger, sale, transfer, other disposition, liquidation, voluntary or involuntary
dissolution or winding-up.
Failure to give any such notice or any defect therein shall not affect
the legality or validity of any transaction listed in this Section 12.
10
13. Disposition of Proceeds on Exercise of Warrant Certificates,
etc. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all moneys received by
the Warrant Agent for the purchase of securities or other property through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement available for
inspection by Warrantholders during normal business hours at its stock transfer
office. Copies of this Agreement may be obtained upon written request addressed
to the Warrant Agent at its stock transfer office in Manhattan, New York.
14. Warrantholder Not Deemed a Stockholder. No Warrantholder, as
such, shall be entitled to vote, receive dividends or be deemed the holder of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Warrants represented thereby for any purpose
whatever, nor shall anything contained herein or in any Warrant Certificate be
construed to confer upon any Warrantholder, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance or otherwise), or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 12 hereof), or to receive dividend or subscription rights,
or otherwise, until such Warrant Certificate shall have been exercised in
accordance with the provisions hereof and the receipt of the Exercise Price and
any other amounts payable upon such exercise by the Warrant Agent.
15. Right of Action. All rights of action in respect to this
Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
consent of the Warrant Agent or of any other holder of a Warrant Certificate,
may, in his own behalf for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce,
or otherwise in respect of, his right to exercise the Warrants evidenced by such
Warrant Certificate, for the purchase of shares of the Common Stock in the
manner provided in the Warrant Certificate and in this Agreement.
16. Agreement of Holders of Warrant Certificates. Every holder of
a Warrant Certificate by accepting the same consents and agrees with the
Company, the Warrant Agent and with every other holder of a Warrant Certificate
that:
(a) the Warrant Certificates are transferable on the
registry books of the Warrant Agent only upon the terms and conditions set forth
in this Agreement; and
(b) the Company and the Warrant Agent may deem and treat
the person in whose name the Warrant Certificate is registered as the absolute
owner of the Warrant (notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Company or the Warrant Agent) for all
purposes whatever and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
11
17. Cancellation of Warrant Certificates. In the event that the
Company shall purchase or otherwise acquire any Warrant Certificate or
Certificates after the issuance thereof, such Warrant Certificate or
Certificates shall thereupon be delivered to the Warrant Agent and be canceled
by it and retired. The Warrant Agent shall also cancel any Warrant Certificate
delivered to it for exercise, in whole or in part, or delivered to it for
transfer, split-up, combination or exchange. Warrant Certificates so canceled
shall be retained by the Warrant Agent as required by law.
18. Concerning the Warrant Agent. The Company agrees to pay to the
Warrant Agent from time to time, on demand of the Warrant Agent, reasonable
compensation for all services rendered by it hereunder and also its reasonable
expenses, including counsel fees, and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Warrant Agent
for, and to hold it harmless against, any loss, liability or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Warrant Agent, arising out of or in connection with the acceptance and
administration of this Agreement.
19. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent under
the provisions of Section 21 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor Warrant Agent; and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates and in this
Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignature under its prior
name and deliver Warrant Certificates so countersigned; and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name; and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.
20. Duties of Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrant Certificates,
by their acceptance thereof, shall be bound:
12
(a) The Warrant Agent may consult with counsel
satisfactory to it (who may be counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Warrant
Agent as to any action taken, suffered or omitted by it in good faith and in
accordance with such opinion; provided, however, that the Warrant Agent shall
have exercised reasonable care in the selection of such counsel. Fees and
expenses of such counsel, to the extent reasonable, shall be paid by the
Company.
(b) Whenever in the performance of its duties under this
Agreement, the Warrant Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a Chairman or co-Chairman of
the Board, the Chief Executive Officer, the President or a Vice President or the
Secretary of the Company and delivered to the Warrant Agent; and such
certificate shall be full authorization to the Warrant Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Warrant Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
(d) The Warrant Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement
or in the Warrant Certificates (except its countersignature on the Warrant
Certificates and such statements or recitals as describe the Warrant Agent or
action taken or to be taken by it) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Warrant Certificate; nor shall it be responsible for the making of any change in
the number of shares of Common Stock for which a Warrant is exercisable required
under the provisions of Section 6 or responsible for the manner, method or
amount of any such change or the ascertaining of the existence of facts that
would require any such adjustment or change (except with respect to the exercise
of Warrant Certificates after actual notice of any adjustment of the Exercise
Price); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Common Stock
to be issued pursuant to this Agreement or any Warrant Certificate or as to
whether any shares of Common Stock will, when issued, be validly issued, fully
paid and non-assessable.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or take any other action likely
to involve expense unless the Company or one or more registered holders of
Warrant Certificates shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be incurred. All rights of
action under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrants or the production
thereof at any trial or
13
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent,
and any recovery of judgment shall be for the ratable benefit of the registered
holders of the Warrant Certificates, as their respective rights or interests may
appear.
(g) The Warrant Agent and any stockholder, director,
officer or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from a Chairman or co-Chairman of the Board, the President, the Chief Financial
Officer, a Vice President or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with the Warrant Agent's
duties, and it shall not be liable for any action taken or suffered or omitted
by it in good faith in accordance with instructions of any such officer.
(i) The Warrant Agent will not be responsible for any
failure of the Company to comply with any of the covenants contained in this
Agreement or in the Warrant Certificates to be complied with by the Company.
(j) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys, agents or employees and the Warrant Agent shall
not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys, agents or employees or for any loss to the Company resulting
from such neglect or misconduct; provided, however, that reasonable care shall
have been exercised in the selection and continued employment of such attorneys,
agents and employees.
(k) The Warrant Agent will not incur any liability or
responsibility to the Company or to any holder of any Warrant Certificate for
any action taken, or any failure to take action, in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument reasonably believed by the Warrant Agent to be genuine and to have
been signed, sent or presented by the proper party or parties.
(l) The Warrant Agent will act hereunder solely as agent
of the Company in a ministerial capacity, and its duties will be determined
solely by the provisions hereof. The Warrant Agent will not be liable for
anything which it may do or refrain from doing in connection with this Agreement
except for its own gross negligence, bad faith or willful conduct.
21. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement upon 30 days' prior notice in
writing mailed, by registered or certified mail, to the Company. The Company may
remove the Warrant Agent or any successor warrant agent upon 30 days' prior
notice in writing, mailed to the Warrant Agent or successor warrant agent, as
the case may be, by registered or certified mail. If the Warrant Agent
14
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Warrant Agent and shall, within 15 days
following such appointment, give notice thereof in writing to each registered
holder of the Warrant Certificates. If the Company shall fail to make such
appointment within a period of 15 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent, then the Company agrees to perform the
duties of the Warrant Agent hereunder until a successor Warrant Agent is
appointed. After appointment and execution of a copy of this Agreement in effect
at that time, the successor Warrant Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Warrant Agent without further act or deed; but the former Warrant Agent shall
deliver and transfer to the successor Warrant Agent, within a reasonable time,
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section, however, or any defect therein
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be.
22. Issuance of New Warrant Certificates. Notwithstanding any of
the provisions of this Agreement or the several Warrant Certificates to the
contrary, the Company may, at its option, issue new Warrant Certificates in such
form as may be approved by its Board of Directors to reflect any adjustment or
change in the Exercise Price or the number or kind of shares purchasable under
the several Warrant Certificates made in accordance with the provisions of this
Agreement.
23. Notices. Notice or demand pursuant to this Agreement to be
given or made on the Company by the Warrant Agent or by the registered holder of
any Warrant Certificate shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:
I-Sector Corporation
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Subject to the provisions of Section 21, any notice pursuant to this
Agreement to be given or made by the Company or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made if
sent by first-class or registered mail, postage prepaid, addressed (until
another address is filed in writing by the Warrant Agent with the Company) as
follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Executive Vice President
Any notice or demand authorized to be given or made to the registered
holder of any Warrant Certificate under this Agreement shall be sufficiently
given or made if sent by first-class
15
or registered mail, postage prepaid, to the last address of such holder as it
shall appear on the registers maintained by the Warrant Agent.
24. Modification of Agreement. The Warrant Agent may, without the
consent or concurrence of the Warrantholders, by supplemental agreement or
otherwise, concur with the Company in making any changes or corrections in this
Agreement that the Warrant Agent shall have been advised by counsel (who may be
counsel for the Company) are necessary or desirable to cure any ambiguity or to
correct any defective or inconsistent provision or clerical omission or mistake
or manifest error herein contained, or to make any other provisions in regard to
matters or questions arising hereunder and which shall not be inconsistent with
the provisions of the Warrant Certificates and which shall not materially and
adversely affect the interests of the Warrantholders. As of the date hereof,
this Agreement contains the entire and only agreement, understanding,
representation, condition, warranty or covenant between the parties hereto with
respect to the matters herein, supersedes any and all other agreements between
the parties hereto relating to such matters, and may be modified or amended only
by a written agreement signed by both parties hereto pursuant to the authority
granted by the first sentence of this Section.
25. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
26. Delaware Contract. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be construed in accordance with the
laws of said State.
27. Termination. This Agreement shall terminate as of the close of
business on the Expiration Date, or such earlier date upon which all Warrants
shall have been exercised or redeemed, except that the Warrant Agent shall
account to the Company as to all Warrants outstanding and all cash held by it as
of the close of business on the Expiration Date.
28. Benefits of this Agreement. Nothing in this Agreement or in
the Warrant Certificates shall be construed to give to any person or corporation
other than the Company, the Warrant Agent, and their respective successors and
assigns hereunder and the registered holders of the Warrant Certificates any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent, their respective successors and assigns hereunder and the
registered holders of the Warrant Certificates.
29. Descriptive Headings. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
30. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
I-SECTOR CORPORATION
By: _____________________________________
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: _____________________________________
Name:
Title:
17
EXHIBIT A
VOID AFTER 5 P.M. PACIFIC TIME ON _________________, 2009
WARRANTS TO PURCHASE COMMON STOCK
W_____ _________ Warrants
I-SECTOR CORPORATION
(a Delaware corporation)
CUSIP 45031W 11 5
THIS CERTIFIES THAT
or registered assigns, is the registered holder of the number of Warrants
("Warrants") set forth above. Each Warrant, unless and until redeemed by the
Company as provided in the Warrant Agreement, hereinafter more fully described
(the "Warrant Agreement") entitles the holder thereof to purchase from I-Sector
Corporation, a corporation incorporated under the laws of the State of Delaware
("Company"), subject to the terms and conditions set forth hereinafter and in
the Warrant Agreement, at any time on or after ___________, 2004 and before the
close of business on ________, 2009 ("Expiration Date"), one fully paid and
non-assessable share of Common Stock of the Company ("Common Stock") upon
presentation and surrender of this Warrant Certificate, with the instructions
for the registration and delivery of Common Stock filled in, at the stock
transfer office in Manhattan, New York, of American Stock Transfer & Trust
Company, Warrant Agent of the Company ("Warrant Agent") or of its successor
warrant agent or, if there be no successor warrant agent, at the corporate
offices of the Company, and upon payment of the Exercise Price (as defined in
the Warrant Agreement) and any applicable taxes paid either in cash, or by
certified or official bank check, payable in lawful money of the United States
of America to the order of the Company. Each Warrant initially entitles the
holder to purchase one share of Common Stock for $____. The number and kind of
securities or other property for which the Warrants are exercisable are subject
to adjustment in certain events, such as mergers, splits, stock dividends,
splits and the like, to prevent dilution. The Company may redeem any or all
outstanding and unexercised warrants by giving not less than 30 days prior
notice at any time after _____________, _____ and after the closing price of the
Common Stock on the principal exchange on which it is traded has equaled or
exceeded $______ per share on each of five consecutive trading days. The
Redemption Price is $0.25 per Warrant. All Warrants not theretofore exercised
will expire on the Expiration Date.
1
This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of ________________, 2004, between
the Company and the Warrant Agent, to all of which terms, provisions and
conditions the registered holder of this Warrant Certificate consents by
acceptance hereof. The Warrant Agreement is incorporated herein by reference and
made a part hereof and reference is made to the Warrant Agreement for a full
description of the rights, limitations of rights, obligations, duties and
immunities of the Warrant Agent, the Company and the holders of the Warrant
Certificates. Copies of the Warrant Agreement are available for inspection at
the stock transfer office of the Warrant Agent or may be obtained upon written
request addressed to the Company at I-Sector Corporation, 0000 Xxxxxxxxx
Xxxxxxx, Xxxxxxx, XX 00000, Attention: Chief Financial Officer.
The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of Warrants, Common
Stock or other securities, but shall make adjustment therefor in cash on the
basis of the current market value of any fractional interest as provided in the
Warrant Agreement.
In certain cases, the sale of securities by the Company upon exercise
of Warrants would violate the securities laws of the United States, certain
states thereof or other jurisdictions. The Company has agreed to use all
commercially reasonable efforts to cause a registration statement to continue to
be effective during the term of the Warrants with respect to such sales under
the Securities Act of 1933, and to take such action under the laws of various
states as may be required to cause the sale of securities upon exercise to be
lawful. However, the Company will not be required to honor the exercise of
Warrants if, in the opinion of the Board of Directors, upon advice of counsel,
the sale of securities upon such exercise would be unlawful. In certain cases,
the Company may, but is not required to, purchase Warrants submitted for
exercise for a cash price equal to the difference between the market price of
the securities obtainable upon such exercise and the exercise price of such
Warrants.
This Warrant Certificate, with or without other Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or Certificates
so surrendered. If the Warrants evidenced by this Warrant Certificate shall be
exercised in part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Certificates evidencing the number of
Warrants not so exercised.
No holder of this Warrant Certificate, as such, shall be entitled to
vote, receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or give or withhold consent to any corporate
action (whether upon any matter submitted to stockholders at any meeting
thereof, or give or withhold consent to any merger, recapitalization, issuance
of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, conveyance or otherwise) or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Warrant Agreement) or to receive
2
dividends or subscription rights or otherwise until the Warrants evidenced by
this Warrant Certificate shall have been exercised and the Common Stock
purchasable upon the exercise thereof shall have become deliverable as provided
in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Company's Common Stock or
other class of stock purchasable upon the exercise of the Warrants evidenced by
this Warrant Certificate are closed for any purpose, the Company shall not be
required to make delivery of certificates for shares purchasable upon such
transfer until the date of the reopening of said transfer books.
Every holder of this Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent, and with every other holder of a
Warrant Certificate that:
(a) this Warrant Certificate is transferable on the registry books of
the Warrant Agent only upon the terms and conditions set forth in the Warrant
Agreement, and
(b) the Company and the Warrant Agent may deem and treat the person in
whose name this Warrant Certificate is registered as the absolute owner hereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone other than the Company or the Warrant Agent) for all purposes whatever
and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary. The Company shall not be required to issue or deliver any
certificate for shares of Common Stock or other securities upon the exercise of
Warrants evidenced by this Warrant Certificate until any tax which may be
payable in respect thereof by the holder of this Warrant Certificate pursuant to
the Warrant Agreement shall have been paid, such tax being payable by the holder
of this Warrant Certificate at the time of surrender.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
(Remainder of page intentionally left blank; signature page follows)
3
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated: _______________
I-SECTOR CORPORATION
By: _____________________________________
Name:
Title: Chief Executive Officer
Attest: _________________________________
Secretary
Countersigned:
By: ______________________________________
Authorized Officer
4
[TO BE PRINTED ON BACK OF CERTIFICATE]
FORM OF ELECTION TO PURCHASE
The undersigned holder hereby exercises the right to purchase _________________
of the shares of common stock (the "Warrant Shares") of I-SECTOR CORPORATION, a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Warrant.
1. Payment of Warrant Exercise Price. The holder has paid in
connection with this exercise the sum of $______ to the Company in accordance
with the terms of the Warrant.
2. Delivery of Warrant Shares. The Company shall deliver to the
holder __________ Warrant Shares in accordance with the terms of the Warrant.
Dated: _____________ __, ______
_________________________________________
(Name of Registered Holder)
By: ________________________________
Name:
Title:
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the common stock of I-SECTOR CORPORATION, a Delaware
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.
Dated: _____________ __, ______
_________________________________________
(Name of Registered Holder)
By: ________________________________
Name:
Title:
5
