THIS PURCHASE OPTION HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THIS PURCHASE OPTION AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS PURCHASE OPTION MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR PURSUANT TO AN
EXEMPTION THEREFROM UNDER THE ACT AND SUCH LAWS, SUPPORTED BY AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
THIS PURCHASE OPTION MAY NOT, IN ANY EVENT, BE TRANSFERRED TO ANY PERSON OR
ENTITY THAT IS NOT AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501,
PROMULGATED UNDER THE ACT.
UNIT PURCHASE OPTION
FOR THE PURCHASE OF
_______ UNITS
OF
TII INDUSTRIES, INC.
(A DELAWARE CORPORATION)
1. Purchase Option.
---------------
THIS CERTIFIES THAT, in consideration of $________ and other
good and valuable consideration duly paid by or on behalf of
_________________________ ("Holder"), as registered owner of this Purchase
Option, to TII Industries, Inc. ("Company"), Holder is entitled, at any time or
from time to time at or after December 9, 2000 ("Commencement Date"), and at or
before 5:00 p.m., Eastern time, December 8, 2004 ("Expiration Date"), but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to
____ Units, each Unit consisting of one share of the Company's common stock, par
value $.01 per share (the "Common Stock"), and one Redeemable Common Stock
Purchase Warrant ("Warrant") to purchase one share of Common Stock. The Units
and the shares of Common Stock and Warrants comprising the Units, including the
"Extra Warrants" (as described in Section 5 hereof), are sometimes collectively
referred to herein as the "Securities." If the Expiration Date is a day on which
banking institutions are authorized by law to close, then this Purchase Option
may be exercised on the next succeeding day that is not such a day in accordance
with the terms herein. During the period ending on the Expiration Date, the
Company agrees not to take any action that would terminate this Purchase Option.
This Purchase Option is initially exercisable at a per Unit purchase price equal
to $2.69; provided, however, that upon the occurrence of any of the events
specified in Section 6 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of shares of Common Stock, Warrants
and Extra Warrants, if any, to be received upon such exercise, shall be adjusted
as therein specified. The term "Exercise Price" shall mean the initial exercise
price or the adjusted exercise price, depending on the context. This Purchase
Option is one of a series of Purchase Options, which, in the aggregate, entitle
the Holders thereof to purchase 414,000 Units and are being issued in connection
with the issuance and sale by the Company of identical Units to investors in a
private placement for which M.H. Meyerson & Co., Inc. has acted as placement
agent ("TII-MHM Private Placement").
<PAGE>
2. Exercise.
--------
2.1. Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to the Company, together with this Purchase Option and payment of the Exercise
Price (except as provided in Section 2.3 hereof) in cash or by certified check
or official bank check for the Units being purchased. If the subscription rights
represented hereby shall not be exercised at or before 5:00 p.m., Eastern time,
on the Expiration Date, except as otherwise provided in Section 1 hereof, this
Purchase Option shall become null and be void without further force or effect,
and all rights represented hereby shall cease and expire.
2.2. Legend. The Warrants and any Extra Warrants purchased under this
Purchase Option shall bear the legends contained on the Warrants (and Extra
Warrants) issued to investors in the TII-MHM Private Placement. Each certificate
for Common Stock purchased under this Purchase Option shall bear a legend
substantially as follows unless the issuance of such Securities by the Company
have been registered under the Securities Act of 1933, as amended ("Securities
Act"):
This security has been acquired for investment and has not
been registered under the Securities Act of 1933, as amended,
or applicable state securities laws. The securities may not be
sold, pledged or transferred in the absence of such
registration or an exemption therefrom under said Act and such
laws, supported by an opinion of counsel, reasonably
satisfactory to the Company and its counsel, that such
registration is not required.
1.1. Conversion Right.
----------------
2.2.1. Determination of Amount. In lieu of the payment of the Exercise
Price (and in lieu of being entitled to receive Common Stock (except as provided
below), Warrants or Extra Warrants) in the manner required by Section 2.1, the
Holder shall have the right (but not the obligation) to convert any exercisable
but unexercised portion of this Purchase Option into Common Stock ("Conversion
Right") as follows: upon exercise of the Conversion Right, the Company shall
deliver to the Holder (without payment by the Holder of any portion of the
Exercise Price in cash) that number of shares of Common Stock equal to the
quotient obtained by dividing (x) the "Value" (as determined below) of the
portion of the Purchase Option being converted by (y) the Market Price (as
defined below) on the second trading day prior to the date the Company receives
this Purchase Option for conversion pursuant to Section 2.3.2 hereof. The
"Value" of the portion of the Purchase Option being converted shall equal the
remainder derived from subtracting (a) (i) the Exercise Price multiplied by (ii)
the number of Units underlying the portion of this Purchase Option being
converted from (b) the product derived from multiplying (i) two multiplied by
the remainder derived from subtracting the exercise price of the Warrant from
the Market Price of the Common Stock by (ii) the number of Units underlying the
portion of this Purchase Option being converted. If any Extra Warrants are
issuable upon exercise of this Purchase Option, then there shall be added to
"value" an amount equal to the remainder derived from subtracting (a) the
Exercise Price of the Extra Warrants from (b) the Market Price of the Common
Stock, multiplied by the number of Extra Warrants issuable upon exercise of this
Purchase Option. As used herein, the term "Market Price" at any date shall be
deemed to be the average last reported sale price of the Common Stock for the
five trading days immediately preceding such date, as officially reported by the
principal securities
2
<PAGE>
exchange on which the Common Stock is listed or admitted to trading, or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange or if any such exchange on which the Common Stock is listed is not the
principal trading market for the Common Stock, the average last reported sale
price of the Common Stock for the five trading days immediately preceding such
date as furnished by the National Association of Securities Dealers, Inc.
("NASD") through the Nasdaq National Market or the Nasdaq SmallCap, or, if
applicable, the OTC Bulletin Board, or if the Common Stock is not listed or
admitted to trading on the Nasdaq National Market or the Nasdaq SmallCap or OTC
Bulletin Board or similar organization, as determined in good faith by
resolution of the Board of Directors of the Company, based on the best
information available to it.
2.2.2. Mechanics of Conversion Right. The Conversion Right may be
exercised by the Holder on any business day on or after the Commencement Date
and not later than the Expiration Date, except as otherwise provided in Section
1 hereof, by delivering to the Company this Purchase Option with a duly executed
exercise form attached hereto with the conversion section completed exercising
the Conversion Right.
3. Transfer.
--------
3.1. General Restrictions; Accredited Investors Only. The Holder of this
Purchase Option, by its acceptance hereof, agrees that it will not sell,
transfer or assign or hypothecate this Purchase Option to anyone except upon
compliance with, or pursuant to exemptions from, applicable securities laws and
only if the transferee shall certify to the Company that the transferee is an
"accredited investor" as defined in Rule 501 promulgated under the Securities
Act. In order to make any permitted assignment, the Holder must deliver to the
Company the assignment form attached hereto duly executed and completed both by
the Holder and the transferee as applicable, together with this Purchase Option
and payment of all transfer taxes, if any, payable in connection therewith. The
Company shall immediately transfer this Purchase Option on the books of the
Company and shall execute and deliver a new Purchase Option or Purchase Options
of like tenor to the appropriate assignee(s) expressly evidencing the right to
purchase the aggregate number of shares of Common Stock purchasable hereunder or
such portion of such number as shall be contemplated by any such assignment.
3.2. Restrictions Imposed by the Securities Act. This Purchase Option and
the Securities underlying this Purchase Option shall not be transferred unless
and until (i) the Company has received the opinion of counsel for the Holder
that this Purchase Option or the Securities, as the case may be, may be
transferred pursuant to an exemption from registration under the Securities Act
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Purchase Option or Securities, as the case may be, has been
filed by the Company and declared effective by the Securities and Exchange
Commission ("Commission") and remains effective and current and is in compliance
with applicable state law.
3
<PAGE>
4. New Purchase Options to be Issued.
---------------------------------
4.1. Partial Exercise or Transfer. Subject to the restrictions in Section
3 hereof, this Purchase Option may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Purchase Option for cancellation, together with the duly executed
exercise or assignment form and funds sufficient to pay any Exercise Price
and/or transfer tax, the Company shall cause to be delivered to the Holder
without charge a new Purchase Option of like tenor to this Purchase Option in
the name of the Holder evidencing the right of the Holder to purchase the
aggregate number of Units purchasable hereunder as to which this Purchase Option
has not been exercised or assigned.
4.2. Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Purchase Option and of reasonably satisfactory indemnification, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of the Company.
5. Registration Obligation.
-----------------------
5.1. The Holder of this Purchase Option shall be entitled to the same
registration rights with respect to (i) this Purchase Option, (ii) the Common
Stock and Warrants comprising the Units issuable upon exercise of this Purchase
Option, (iii) the Extra Warrants referred to below, and (iv) the Common Stock
issuable upon exercise of the Warrants included in the Units and the Extra
Warrants referred to below (collectively, the "Registrable Securities") as the
Company has granted to investors in the TII-MHM Private Placement as set forth
in the Subscription Agreement and Investor Information Statement entered into by
the Company and each such investor ("Subscription Agreement"), including,
without limitation and subject to the limitations and obligations set forth
therein, the mandatory registration obligation set forth in Section 7.1.1(a) of
Schedule 1 to the Subscription Agreement and the provisions relating thereto as
set forth in Section 7.1 of Schedule 1 to the Subscription Agreement; provided,
however, that if the registration statement referred to in Section 7.1.1.(a) of
Schedule 1 to the Subscription Agreement is not declared effective by the
Securities and Exchange Commission by the Target Date referred to therein, then
in lieu of the actual issuance of additional Warrants to the Holder (as the
Company has agreed to issue to investors in the TII-MHM Private Placement), on
the Target Date and on each monthly anniversary of the Target Date until the
earlier of the effective date of such registration statement or the nineteenth
monthly anniversary of the Target Date, the number of Warrants purchasable upon
exercise of this Purchase Option shall be increased (without any increase in the
Exercise Price of this Purchase Option) by 5% of the number of Warrants
purchasable hereunder prior to the first such adjustment made on the Target Date
(such increase in the number of Warrants purchasable hereunder being referred to
herein as the "Extra Warrants"). In connection with the registration statements
to be filed by the Company as provided in the Subscription Agreement, the
Company shall register for resale under the Securities Act this Purchase Option,
the Common Stock and Warrants comprising the Units, the Extra Warrants and the
Common Stock issuable upon exercise of the Warrants and Extra Warrants and,
alternatively, if permitted by the Securities and Exchange Commission, the
Company shall register the issuance by the Company of the Common Stock, Warrants
and Extra Warrants, if any, upon exercise of this Purchase Option, and the
issuance by the Company of the Common Stock upon exercise of the Warrants and
Extra Warrants, if any.
4
<PAGE>
5.2. Successors and Assigns. The registration rights granted to the
Holders inure to the benefit of all the Holders' successors, heirs, pledgees,
assignees, transferees and purchasers of the Registrable Securities.
6. Adjustments.
-----------
6.1. Adjustments to Exercise Price and Number of Securities. The Exercise
Price and the number of Units (as well as the number of any Extra Warrants
issuable hereunder) underlying the Purchase Option shall be subject to
adjustment from time to time as hereinafter set forth:
6.1.1. Stock Dividends, Recapitalization, Reclassification,
Split-Ups. If after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
(but not the Warrants or Extra Warrants issuable upon exercise of the Purchase
Options since adjustments made under the anti-dilution of such Warrants and
Extra Warrants are deemed made for events occurring after the date of original
issuance of this Purchase Option) issuable on exercise of this Purchase Option
shall be increased in proportion to such increase in outstanding shares. For
example, if the Company declares a two-for-one stock dividend and at the time of
such dividend this Purchase Option is for the purchase of 1,000 Units at $2.20
per Unit and 50 Extra Warrants will be issued upon exercise of this Purchase
Option, upon effectiveness of the dividend, this Purchase Option will be
adjusted to allow for the purchase, at $1.10 per Unit, of 2,000 shares of Common
Stock, 1,000 Warrants (which Warrants would entitle the holder, under the
anti-dilution provisions thereof, to purchase 2,000 shares of Common Stock) and
50 Extra Warrants (which Extra Warrants would entitle the holders, under the
anti-dilution provisions thereof, to purchase 100 shares of Common Stock).
6.1.2. Aggregation of Shares. If after the date hereof, and subject
to the provisions of Section 6.2, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination or reclassification of shares
of Common Stock or other similar event, then, upon the effective date thereof,
the number of shares of Common Stock (but not the Warrants or Extra Warrants
issuable upon exercise of the Purchase Options since adjustments made under the
anti-dilution of such Warrants and Extra Warrants are deemed made for events
occurring after the date of original issuance of this Purchase Option) issuable
on exercise of this Purchase Option shall be decreased in proportion to such
decrease in outstanding shares.
6.1.3. Adjustments in Exercise Price. Whenever the number of shares
issuable upon exercise of this Purchase Option is adjusted, as provided in this
Section 6.1, the Exercise Price shall be adjusted (to the nearest cent) by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of shares purchasable
upon the exercise of this Purchase Option immediately prior to such adjustment,
and (y) the denominator of which shall be the number of shares so purchasable
immediately thereafter.
6.1.4. Replacement of Securities upon Reorganization, etc. In case
of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change covered by Section 6.1.1 or 6.1.2 hereof or that
solely affects the par value of such
5
<PAGE>
shares of Common Stock), or in the case of any merger or consolidation of the
Company with or into another corporation (other than a consolidation or merger
in which the Company is the continuing corporation and that does not result in
any reclassification or reorganization of the outstanding shares of Common
Stock), or in the case of any sale or conveyance to another corporation or
entity of the property of the Company as an entirety or substantially as an
entirety in connection with which the Company is dissolved, the Holder of this
Purchase Option shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Option) to receive upon the exercise hereof,
for the same aggregate Exercise Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities or
property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or other
transfer, by a Holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Purchase Option immediately prior to such
event. The provisions of this Section 6.1.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
6.1.5. Changes in Form of Purchase Option. This form of Purchase
Option need not be changed because of any change pursuant to this Section, and
Purchase Options issued after such change may state the same Exercise Price and
the same number of Units as are stated in the Purchase Options initially issued
pursuant to this Purchase Option. The acceptance by any Holder of the issuance
of new Purchase Options reflecting a required or permissive change shall not be
deemed to waive any rights to a prior adjustment or the computation thereof.
6.2. Redemption of Warrants. Notwithstanding anything to the contrary
contained in the form of Warrants issued to investors in the TII-MHM Private
Placement, the Warrants and Extra Warrants, if any, issuable upon exercise of
this Purchase Option cannot, under any circumstances, be redeemed by the Company
until such time as they have been issued to the Holder.
6.3. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of a share of Common Stock
issuable upon the exercise or transfer of this Purchase Option, nor shall it be
required to issue scrip or pay cash in lieu of any fractional interests, it
being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up or down to the nearest whole number of
shares of Common Stock or other securities, properties or rights.
6.4. Notice of Adjustment. Upon the happening of any event requiring an
adjustment of the Exercise Price hereunder, the Company shall forthwith give
written notice thereof to the Holders stating the adjusted Exercise Price and
the adjusted number of shares of Common Stock issuable upon exercise of this
Purchase Option resulting from such event and setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Purchase Option and the Warrants and Extra
Warrants, if any, issuable upon exercise of this Purchase Option, such number of
shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Purchase Options and payment of the Exercise Price therefor, all
6
<PAGE>
shares of Common Stock and other securities issuable upon such exercise shall be
duly and validly issued, fully paid and non-assessable and not subject to
preemptive rights of any stockholder. As long as the Purchase Options shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon exercise of the Purchase Options to be listed
(subject to official notice of issuance) on all securities exchanges (or, if
applicable, on Nasdaq) on which the Common Stock is then listed and/or quoted.
8. Notices of Record Date. In case:
----------------------
(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Purchase Option) for the purpose of entitling or enabling them to receive any
dividend or other distribution, or to receive any right to subscribe for or
purchase any shares of any class or any other securities, or to receive any
other right, or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company, or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company will deliver
or cause to be delivered to the Holder a notice specifying, as the case may be,
(i) the date on which a 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, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Purchase Option) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least fifteen (15) days prior to the
record date or effective date for the event specified in such notice, provided
that the failure to mail such notice shall not affect the legality or validity
of any such action.
8.1. Transmittal of Notices. All notices, requests, consents and other
communications under this Purchase Option shall be in writing and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier, with acknowledgment of receipt to the party to whom
notice is given, or on the fifth day after mailing if mailed to the party to
whom notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the books of the Company, or (ii) if to the Company, to its principal
executive office.
9. Miscellaneous.
-------------
9.1. Amendments. The Company and M.H. Meyerson & Co., Inc. ("MHM") may
from time to time supplement or amend this Purchase Option without the approval
of any of the Holders in order to cure any ambiguity, to correct or supplement
any provision contained herein
7
<PAGE>
which may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising hereunder
that the Company and MHM may deem necessary or desirable and that the Company
and MHM deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of the party
against whom enforcement of the modification or amendment is sought.
9.2. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.
9.3. Entire Agreement. This Purchase Option (together with the
registration rights provisions in the Subscription Agreement referred to in this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
9.4. Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and the Company and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
9.5. Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. Each of the
Company and the Holder hereby agrees that any action, proceeding or claim
against it arising out of, or relating in any way to this Purchase Option shall
be brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submits
to such jurisdiction, which jurisdiction shall be exclusive. Each of the Company
and the Holder hereby waives any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum. Any process or summons to be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at its principal business offices. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The prevailing party(ies) in any such action shall be
entitled to recover from the other party(ies) all of its reasonable attorneys'
fees and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
9.6. Waiver, Etc. The failure of the Company or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of the
Company or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
9.7. Exchange Agreement. As a condition of the Holder's receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete exercise of this
8
<PAGE>
Purchase Option by Holder, if the Company and Meyerson enter into an agreement
("Exchange Agreement") pursuant to which they agree that all outstanding
Purchase Options will be exchanged for securities or cash or a combination of
both, then Holder shall agree to such exchange and become a party to the
Exchange Agreement.
IN WITNESS WHEREOF, the Company has caused this Purchase Option to be
signed by its duly authorized officer as of the 8th day of June, 2000.
TII INDUSTRIES, INC.
By: /s/ Paul G. Sebetic
-----------------------------
Name: Paul G. Sebetic
Title: Vice President-Finance
9
<PAGE>
NOTICE OF EXERCISE
To Be Executed by the Registered Holder
In Order to Exercise this Unit Purchase Option
The undersigned registered Holder hereby irrevocably elects to exercise
the attached Purchase Option and to purchase ___ Units of TII Industries, Inc.
(and to receive any Extra Warrants issuable upon such exercise) and hereby makes
payment of $________ (at the rate of $____ per Unit) in payment of the Exercise
Price pursuant thereto. Please issue the securities comprising the Units as to
which this Purchase Option is exercised in accordance with the instructions
given below.
or
The undersigned Registered Holder hereby irrevocably elects to exercise
the attached Purchase Option and to purchase ___ Units of TII Industries, Inc.
(and to receive any Extra Warrants issuable upon such exercise) by surrender of
the unexercised portion of the attached Purchase Option (with a "Value" of
$______ based on a "Market Price" of $______). Please issue the securities
comprising the Units as to which this Purchase Option is exercised in accordance
with the instructions given below.
PLEASE ISSUE CERTIFICATES AS FOLLOWS:
PLEASE INSERT SOCIAL SECURITY OR OTHER
[ ] IDENTIFYING NUMBER
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(please print or type name and address)
and be delivered to
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(please print or type name and address)
and if such number of Units exercised shall not be all the Units evidenced by
the attached Purchase Option, that a new Purchase Option for the balance of such
Purchase Option be registered in the name of, and delivered to, the registered
Holder at the address stated below.
Dated:_____________ _______________________________________
(Signature of Registered Holder)
---------------------------------------
---------------------------------------
(Address)
---------------------------------------
(Taxpayer Identification Number)
---------------------------------------
Signature Guaranteed
10
<PAGE>
ASSIGNMENT FORM
To be executed by the Registered Holder
In order to Assign Purchase Option
FOR VALUE RECEIVED,____________________________________ hereby sell, assigns and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR
[ ] OTHER IDENTIFYING NUMBER
-----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(please print or type name and address)
______________________ of the Purchase Options represented by the attached
instrument, and hereby irrevocably constitutes and appoints
________________________ Attorney to transfer these Purchase Options on the
books of the Company, with full power of substitution in the premises.
Dated:________________ X__________________________________
(Signature of Registered Holder)
-----------------------------------
(Signature Guaranteed)
THE SIGNATURE ON THE ASSIGNMENT OR THE PURCHASE FORM MUST CORRESPOND TO THE NAME
AS WRITTEN UPON THE FACE OF THIS PURCHASE OPTION CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
CERTIFICATION OF STATUS OF TRANSFEREE
TO BE EXECUTED BY THE TRANSFEREE OF THIS PURCHASE OPTION
The undersigned transferee hereby certifies to the registered Holder
and to TII Industries, Inc. that the transferee is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act of 1933, as amended.
Dated:________________ X__________________________________
(Signature of Transferee)
11
