FINANCIAL ADVISORY AND INVESTMENT BANKING AGREEMENT
This Agreement ("Agreement") is made and entered into as of the 2nd
day of January, 2001 between Salomon Grey Financial Corporation (the
"Consultant"), with its principal executive office at 5430 LBJ Freeway, Suite
1626, Dallas, Texas 75240 and Vizacom Inc., a Delaware corporation (the
"Company"), with its principal executive office at 300 Frank W. Burr Blvd., 7th
floor, Teaneck, New Jersey 07666.
WITNESSETH:
WHEREAS, the Consultant is engaged in the business of providing financial
advisory advice and investment banking services; and
WHEREAS, the Company is desirous of retaining the Consultant for the
purpose of obtaining financial advisory advice and investment banking services.
NOW THEREFORE:
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Term. This Agreement shall commence on January 2, 2001 and
continue for a term of one (1) year; provided, that the Company shall have
the right to terminate this Agreement upon notice to Consultant at any time.
2. Services. (a) The Company hereby engages Consultant for the term
specified in Paragraph 1 hereof to render such financial advisory and investment
banking services and advice to the Company as the Company may request. The
Company acknowledges the Consultant's ability to relate information regarding
the Company's activities is directly related to the activities of the Company
and the information provided by Company to Consultant. Consultant's duties may
include, but will not necessarily be limited to, providing recommendations
concerning the following financial and related matters:
(1) Rendering advice with regard to internal operations, including:
(i) the formation of corporate goals and their implementation;
(ii) the Company's financial structure and its divisions or
subsidiaries;
(iii) securing, when and if necessary and possible, additional
financing through banks and/or insurance companies; and
(iv) corporate organization and personnel; and
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(2) Rendering advice and/or providing investment
banking services with regard to any of the following corporate
finance and other matters:
(i) changes in the capitalization of the Company;
(ii) changes in the Company's corporate structure;
(iii) redistribution of shareholdings of the Company's stock;
(iv) offerings of securities in public and private
transactions;
(v) alternative uses of corporate assets;
(vi) sales of stock by insiders pursuant to Rule 144 or
otherwise;
(vii) structure and use of debt;
(viii) the acquisition of and/or merger with other companies,
the sale of the Company itself, or any of its assets,
subsidiaries or affiliates, or similar type of
transaction; and
(ix) corporate communications and relations with stockholders.
(b) Consultant will have no obligation whatsoever to provide to or for
the benefit of the Company any securities analysts' reports or any market
making activities.
3. Compensation.
In consideration of the services to be provided by Consultant
hereunder, the Company shall pay to Consultant a total of $300,000, payable in
equal monthly installments of $25,000 on the last day of each calendar month
during the term hereof. The Company, at its option, may elect to pay all, but
not less than all, of such amount in shares of common stock, par value $.001 per
share ("Common Stock"), of the Company and warrants ("Warrants") to purchase
Common Stock, as follows: Upon execution and delivery of this Agreement, the
Company shall issue to Consultant 450,000 shares (the "Shares") of Common Stock
and Warrants to purchase 600,000 shares of Common Stock. Of the Shares, 200,000
shall be deposited into escrow with Kaufman & Moomjian, LLC, as escrow agent
(the "Escrow Agent") pursuant to the terms of an escrow agreement ("Escrow
Agreement") of even date herewith among the Company, the Consultant and the
Escrow Agent. The Escrow Agent shall release to Consultant 75,000 Shares on
February 15, 2001, 75,000 Shares on June 30, 2001, and 50,000 shares on December
31, 2001, in each case in accordance with the terms and conditions of the Escrow
Agreement and so long as this Agreement remains in effect. Of the Warrants,
200,000 shall have an exercise price of $.25 and be in the form of Exhibit A
hereto, 100,000 shall have an exercise price of $.50 and be in the form of
Exhibit B hereto, 100,000 shall have an exercise price of $1.00 and be in the
form of Exhibit C hereto, and 200,000 shall have an exercise price of $1.00 and
be in the form of Exhibit D hereto. Of the Warrants, those issued in the form of
Exhibits B, C and D shall be placed in escrow with the Escrow Agent pursuant to
the Escrow Agreement. The Warrants issued in the form of Exhibit B shall be
released by the Escrow Agent to Consultant on February 15, 2001, the Warrants
issued in the form of Exhibit C shall be released by the Escrow Agent to
Consultant on June 30, 2001, and the Warrants issued in the form of Exhibit D
shall be released by the Escrow Agent to Consultant on December 31, 2001, in
each case in accordance with the terms and conditions of the Escrow Agreement
and so long as this Agreement remains in effect.
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The Company shall use its commercially reasonable best efforts to
register the Shares and the shares of Common Stock to be issued upon exercise of
the Warrants (the "Warrant Shares") in a Registration Statement on Form S-3 for
resale by Consultant.
4. Expenses. In addition to the fees payable hereunder, the Company
shall reimburse Consultant for all reasonable travel and out-of-pocket expenses
incurred in connection with the services performed by Consultant pursuant to
this Agreement, promptly after submission to the Company of appropriate evidence
of such expenditures. All such expenditures in excess of $200 will be submitted
to the Company for approval in advance.
5. Representations and Warranties. Consultant hereby represents,
warrants and acknowledges to and covenants and agrees with the Company as
follows:
(a) Investment Intent. Consultant is acquiring the Shares and Warrants
and will acquire the Warrant Shares, for its own account, for investment only
and not with a view to, or for sale in connection with, a distribution thereof
or any part thereof, within the meaning of the Securities Act, and the rules and
regulations promulgated thereunder, or any applicable state securities or
blue-sky laws;
(b) Investor Status. Consultant is an accredited investor as
such term is defined under Rule 501 of Regulation D promulgated pursuant to the
Securities Act ("Regulation D");
(c) Intent to Transfer. Consultant is not a party to or subject
to or bound by any contract, undertaking, agreement or arrangement with any
person to sell, transfer or pledge the Shares, Warrants or Warrant Shares or any
part thereof to any person, and has no present intention to enter into such a
contract, undertaking, agreement or arrangement;
(d) Offering Exempt from Registration; Company's Reliance.
(i) The Company has advised Consultant that the Shares,
Warrants and Warrant Shares have not been registered under the
Securities Act or under the laws of any state on the
basis that the issuance thereof is exempt from such registration;
(ii) The Company's reliance on the availability
of such exemption is, in part, based upon the accuracy and
truthfulness of Consultant's representations contained
herein;
(iii) As a result of such lack of registration,
none of the Shares, Warrants or Warrant Shares may be resold
or otherwise transferred or disposed of without
registration pursuant to or an exemption therefrom available
under the Securities Act and such state securities laws; and
(iv) In furtherance of the provisions of this paragraph (d),
all of
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the certificate(s) representing the Shares and Warrant
Shares shall bear a restrictive legend substantially in the
following form:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SHARES TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND SUCH STATE
SECURITIES LAWS;"
the certificates representing the Warrants shall bear a legend
substantially in the following form:
"NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT
CERTIFICATE NOR THE SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS HAVE BEEN ACQUIRED,
AND ANY SHARES OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON
EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR SUCH
SHARES OR OTHER SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF SUCH WARRANTS AND SUCH SHARES OR OTHER
SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS;"
the stock certificates subject to escrow shall also bear a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS OF AN ESCROW AGREEMENT DATED AS OF JANUARY 2, 2001
AMONG THE COMPANY, SALOMON GREY
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FINANCIAL CORPORATION AND KAUFMAN & MOOMJIAN, LLC, AS ESCROW AGENT;"
and the certificates representing the Warrants subject to escrow shall
also bear a legend substantially in the following form:
"THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE
ARE SUBJECT TO THE TERMS OF AN ESCROW AGREEMENT DATED AS OF JANUARY
2, 2001 AMONG THE COMPANY, SALOMON GREY FINANCIAL CORPORATION AND
KAUFMAN & MOOMJIAN, LLC, AS ESCROW AGENT."
(e) Sophistication of Consultant. Consultant has evaluated the
merits and risks of acquiring the Shares, Warrants and Warrant Shares and has
such knowledge and experience in financial and business matters that the
undersigned is capable of evaluating the merits and risks of such acquisition,
is aware of and has considered the financial risks and financial hazards of
acquiring the Shares, Warrants and Warrant Shares, and is able to bear the
economic risk of acquiring the Shares, Warrants and Warrant Shares, including
the possibility of a complete loss with respect thereto;
(f) Access to Information. Consultant has had access to such
information regarding the business and finances of the Company, the receipt and
careful reading of which is hereby acknowledged by Consultant, and has been
provided the opportunity to discuss with the Company's management the business,
affairs and financial condition of the Company and such other matters with
respect to the Company as would concern a reasonable person considering the
transactions contemplated by this Agreement and/or concerned with the operations
of the Company including, without limitation, pursuant to a meeting and/or
discussions with management of the Company;
(g) No Guarantees. It never has been represented, guaranteed or
warranted to Consultant by the Company, or any of its officers, directors,
agents, representatives or employees, or any other person, expressly or by
implication, that:
(i) Any gain will be realized by the undersigned from
Consultant's investment in the Shares, Warrants or Warrant
Shares;
(ii) There will be any approximate or exact length of time
that Consultant will be required to remain as a holder of
Shares, Warrants or Warrant Shares; or
(iii) The past performance or experience on the part of
the Company, its predecessors or of any other person, will in
any way indicate any future results of the Company;
(h) No Other Representations, Warranties, Covenants or Agreements
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of the Company. Except as set forth in this Agreement, the Company has not made
any representation, warranty, covenant or agreement with respect to the matters
contained herein, and Consultant has not and will not rely on any
representation, warranty, covenant or agreement except as set forth in this
Agreement;
(i) High Degree of Investment Risk. The investment in the Shares,
Warrants and Warrant Shares involves a high degree of risk and may result in a
loss of the entire amount invested; there is no assurance that the Company's
operations will be profitable in the future; and there is no assurance that a
public market for shares of Common Stock will continue to exist;
(j) State of Principal Place of Business. The address set forth
herein is Consultant's true and correct principal place of business, and
Consultant has no present intention of relocating its principal place of
business to any other country, state or jurisdiction;
(k) No Purchaser Representative. Consultant has not authorized
any person or institution to act as the undersigned's "purchaser
representative" (as such term is defined in Rule 501 of Regulation D) in
connection with Consultant's investment in Shares, Warrants or Warrant Shares;
and
(l) No General Solicitation. Consultant has not received any
general solicitation or general advertising regarding the purchase of any
of the Shares, Warrants or Warrant Shares.
6. Company Information. The Company acknowledges that all opinions and
advice (written or oral) given by Consultant to the Company in connection with
Consultant's engagement are intended solely for the benefit and use of the
Company (including its officers and directors) in considering the transaction to
which they relate, and the Company agrees that no person or entity other than
the Company (including its officers and directors) shall be entitled to make use
of or rely upon the advice of Consultant to be given hereunder, and no such
opinion or advice shall be used for any manner or for any purpose, nor may the
Company make any public references to Consultant, or use the Consultant's name
in any annual reports or any other reports or releases of the Company, without
Consultant's prior written consent. The Company recognizes and confirms that, in
advising the Company hereunder, Consultant will use and rely on data, material
and other information furnished to Consultant by the Company, without
independently verifying the accuracy, completeness or veracity of same.
7. Confidentiality. Consultant will, and will direct its directors,
officers, employees, representatives, agents and advisors ("Representatives")
to, hold in confidence and not use or disclose any confidential information of
the Company. Notwithstanding the foregoing, Consultant shall not be required to
maintain confidentiality with respect to information (i) which is or becomes
part of the public domain not due to the breach of this Agreement by Consultant,
(ii) of which it had independent knowledge prior to disclosure; (iii) which
comes into the possession of Consultant in the normal and routine course of its
own business from and through independent non-confidential sources; or (iv)
which is required to be disclosed by Consultant by
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laws, rules or regulators. If Consultant is requested or required to
disclose any confidential information supplied to it by the Company, Consultant
shall, unless prohibited by law, promptly notify the Company of such request(s)
so that the Company may seek an appropriate protective order. In addition,
Consultant acknowledges that it is aware, and that it will advise its
Representatives who receive confidential information, that the United States
securities laws prohibit any person who has material, non-public information
from purchasing or selling securities of the Company (and options, warrants and
rights relating thereto) and from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person (including, without limitation, any of your Representatives) is likely to
purchase or sell such securities.
8. Other Consulting Clients. The Company acknowledges that Consultant
or its affiliates are in the business of providing services and consulting
advice to others. Nothing herein contained shall be construed to limit or
restrict Consultant in conducting such business with others, or in rendering
such advice to others, provided that Consultant shall not take any action, to
the best of its knowledge and belief, that would be contrary to the interests of
the Company.
9. Indemnification. (a) The Company agrees to indemnify and hold
harmless Consultant, its employees, directors, officers, agents, representatives
and controlling persons from and against any and all losses, claims, damages,
liabilities, suits, actions, proceedings, costs and expenses (collectively,
"Damages"), including, without limitation, reasonable attorney fees and
expenses, as and when incurred, if such Damages were directly caused by,
relating to, based upon or arising out of the rendering by Consultant of
services pursuant to this Agreement, so long as Consultant shall not have
engaged in illegal, intentional or willful misconduct, or shall have acted
grossly negligently, in connection with the services provided which form the
basis of the claim for indemnification. This paragraph shall survive the
termination of this Agreement.
(b) The Consultant agrees to indemnify and hold harmless the Company,
its employees, directors, officers, agents, representatives and controlling
persons from and against any and all Damages, including, without limitation,
reasonable attorney fees and expenses, as and when incurred, if such Damages
were directly caused by, relating to, based upon or arising out of the rendering
by Consultant of services pursuant to this Agreement, if Consultant shall have
engaged in illegal, intentional or willful misconduct, or shall have acted
grossly negligently, in connection with the services provided which form the
basis of the claim for indemnification. This paragraph shall survive the
termination of this Agreement.
10. Independent Contractor. Consultant shall perform its services
hereunder as an independent contractor and not as an employee or agent of the
Company or any affiliate thereof. Consultant shall have no authority to act for,
represent or bind the Company or any affiliate thereof in any manner, except as
may be expressly agreed to by the Company in writing from time to time.
11. Arbitration. In the event of any dispute under this Agreement,
then and in
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such event, each party agrees that the same shall be submitted to
the American Arbitration association ("AAA") in the City of New York or nearest
city, for its decision and determination in accordance with its rules and
regulations then in effect. Each of the parties agrees that the decision and/or
award made by the AAA may be entered as judgment of the Courts of the State of
New York, and shall be enforceable as such.
12. Notices. Any notice to be given by either party to the other
hereunder shall be sufficient if in writing and sent by (a) nationally
recognized overnight courier, (b) facsimile transmission electronically
confirmed, (c) hand delivery against receipt, (d) registered or certified mail,
return receipt requested, in each case addressed to such party at the address
specified on the first page of this Agreement or such other address as either
party may have given to the other in writing.
13. Miscellaneous. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. No provision of
this Agreement may be amended, modified or waived, except in writing signed by
both parties. This Agreement shall be binding upon and inure to the benefit of
each of the parties and their respective successors, legal representatives and
assigns. This Agreement shall not be assigned by either party without the
written consent of the other party. This Agreement may be executed in
counterparts. This Agreement shall be construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the day of the year first above written.
VIZACOM INC.
By: /s/ Alan Schoenbart
-----------------------------
Name: Alan Schoenbart
Title: CFO
SALOMON GREY FINANCIAL
CORPORATION
By: /s/ Paul Koupas
-----------------------------
Name: Paul Koupas
Title: CEO
<PAGE>
Exhibit A
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NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE
NOR THE SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY
OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF SUCH WARRANTS AND SUCH SHARES OR OTHER SECURITIES
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. ON DECEMBER 31, 2003
VIZACOM INC.
WARRANT CERTIFICATE
200,000 COMMON STOCK PURCHASE WARRANTS
Teaneck, New Jersey
Warrant Certificate No. SGFC-1 January 2, 2001
THIS IS TO CERTIFY THAT, for value received, Salomon Grey Financial
Corporation or registered assigns (the "Warrantholder") permitted by the terms
of this Warrant Certificate, is the registered owner of the number of Common
Stock Purchase Warrants (each, a "Warrant") set forth above, each Warrant
entitling the owner thereof to purchase from Vizacom Inc., a Delaware
corporation (the "Company"), at any time on or prior to 5:00 P.M., New York City
time, on December 31, 2003 (the "Expiration Time"), one duly authorized, validly
issued, fully paid and nonassessable share (each, a "Warrant Share") of the
common stock, par value $.001 per share ("Common Stock"), of the Company, at a
price of $.25 per share (the "Exercise Price"), all subject to the terms and
conditions contained herein. The number of Warrants evidenced by this Warrant
Certificate (and the number and kind of securities which may be purchased upon
exercise hereof) set forth above, and the Exercise Price per share set forth
above, are as of the date hereof.
As provided herein, the Exercise Price and the number of shares of
Common Stock or other securities which may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment.
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This Warrant Certificate, together with any warrant certificate(s)
issued in replacement or substitution hereof (as provided for herein) evidencing
all or part of the Warrants evidenced hereby, are sometimes collectively
referred to herein as the "Warrant Certificates."
The rights of the registered holder of this Warrant Certificate shall
be subject to the following further terms and conditions:
1. EXERCISE OF WARRANTS.
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(a) The Warrants may be exercised, in whole or in part, on or prior to
the Expiration Time by surrendering this Warrant Certificate, with the purchase
form provided for herein duly executed by the Warrantholder or by the
Warrantholder's duly authorized attorney-in-fact, at the principal office of the
Company, presently located at Glenpointe Centre East, 300 Frank W. Burr
Boulevard - 7th Floor, Teaneck, New Jersey 07666, or at such other office or
agency in the United States as the Company may designate by notice in writing to
the Warrantholder (in either event, the "Company Offices"), accompanied by
payment in full, either in the form of cash, bank cashier's check or certified
check payable to the order of the Company, of the Exercise Price payable in
respect of the Warrants being exercised. If fewer than all of the Warrants are
exercised, the Company shall, upon each exercise prior to the Expiration Time,
execute and deliver to the Warrantholder a new Warrant Certificate (dated as of
the date hereof) evidencing the balance of the Warrants that remain exercisable.
(b) Notwithstanding Section 1(a) above, the Warrants may be exercised,
in whole or in part, on a "cashless" basis, by stating in the attached exercise
purchase form provided herein such intention and the maximum number (the
"Maximum Number") of shares of Common Stock the Warrantholder desires to
purchase (and lose the right to purchase) in consideration of cancellation of
Warrants in payment for such exercise. The number of shares of Common Stock the
Warrantholder shall receive upon such exercise shall equal the difference
between the Maximum Number and the quotient that is obtained when the product of
the Maximum Number and the then current Exercise Price is divided by the then
current Market Price per share (as hereinafter defined).
(c) On the date of exercise of the Warrants, the Warrantholder
exercising same shall be deemed to have become the holder of record for all
purposes of the Warrant Shares to which the exercise relates.
(d) As soon as practicable after the exercise of all or part of the
Warrants evidenced by this Warrant Certificate, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to be
issued in the name of and delivered to the Warrantholder a certificate or
certificates evidencing the number of duly authorized, validly issued, fully
paid and nonassessable Warrant Shares to which the Warrantholder shall be
entitled upon such exercise.
(e) No certificates for fractional Warrant Shares shall be issued upon
the exercise of any of the Warrants but, in lieu thereof, the Company shall,
upon exercise of all the Warrants, round up any fractional Warrant Share to the
nearest whole share of Common Stock.
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2. ISSUANCE OF COMMON STOCK; RESERVATION OF SHARES.
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(a) The Company covenants and agrees that all Warrant Shares which may
be issued upon the exercise of all or part of the Warrants will, upon issuance
in accordance with the terms hereof, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.
(b) The Company further covenants and agrees that if any shares of
Common Stock to be reserved for the purpose of the issuance of Warrant Shares
upon the exercise of Warrants require registration with, or approval of, any
governmental authority under any federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will promptly use
its best efforts to effect such registration or obtain such approval, as the
case may be.
3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND CHARACTER OF WARRANT SHARES, AND
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NUMBER OF WARRANTS.
------------------
The Exercise Price and the number and kind of securities purchasable
upon the exercise of each Warrant shall be subject to adjustment from time to
time upon the happening of the events enumerated in this Section 3.
(a) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In case the
Company shall at any time on or before the Expiration Time:
(i) pay a dividend in shares of Common Stock or other stock of
the Company or make a distribution in shares of Common Stock or such other
stock to holders of all its outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock; or
(iv) issue by reclassification of its shares of Common Stock
other securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation),
then the number and kind of Warrant Shares purchasable upon exercise of each
Warrant outstanding immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which the Warrantholder would
have owned or have been entitled to receive after the happening of any of the
events described above had such Warrant been exercised in full immediately prior
to the earlier of the happening of such event or any record date in respect
thereto. In the event of any adjustment of the number of Warrant Shares
purchasable upon the exercise of each then outstanding Warrants pursuant to this
Paragraph 3(a), the Exercise Price shall be adjusted to be the amount resulting
from
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dividing the number of shares of Common Stock (including fractional shares
of Common Stock) covered by such Warrant immediately after such adjustment into
the total amount payable upon exercise of such Warrant in full immediately prior
to such adjustment. An adjustment made pursuant to this Paragraph 3(a) shall
become effective immediately after the effective date of such event retroactive
to the record date for any such event. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) EXTRAORDINARY DIVIDENDS. In case the Company shall at any time on
or before the Expiration Time fix a record date for the issuance of rights,
options, or warrants to all holders of its outstanding shares of Common Stock,
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase shares of Common Stock (or securities exchangeable for
or convertible into shares of Common Stock) at a price per share of Common Stock
(or having an exchange or conversion price per share of Common Stock, with
respect to a security exchangeable for or convertible into shares of Common
Stock) which is lower than the current Market Price per share of Common Stock
(as defined in Paragraph 3(d) below) on such record date, then the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, of which (i) the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial exchange or
conversion price of the exchangeable or convertible securities so to be offered)
would purchase at such current Market Price and (ii) the denominator shall be
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock to be offered for subscription or
purchase (or into which the exchangeable or convertible securities so to be
offered are initially exchangeable or convertible). Such adjustment shall become
effective at the close of business on such record date; however, to the extent
that shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock) are not delivered after the expiration of such rights,
options, or warrants, the Exercise Price shall be readjusted (but only with
respect to Warrants exercised after such expiration) to the Exercise Price which
would then be in effect had the adjustments made upon the issuance of such
rights, options, or warrants been made upon the basis of delivery of only the
number of shares of Common Stock (or securities exchangeable for or convertible
into shares of Common Stock) actually issued. In case any subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company and shall be described in a statement
mailed to the Warrantholder. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation.
(c) EXTRAORDINARY DISTRIBUTIONS. In case the Company shall at any time
after the original date of issuance of the Warrants distribute to all holders of
its shares of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) evidences of its indebtedness or assets (excluding cash dividends
and distributions payable out of consolidated net income or earned surplus in
accordance with Delaware law and dividends or distributions payable in shares of
stock described in Paragraph 3(a) above) or rights, options, or warrants or
exchangeable or convertible securities containing the right to subscribe for or
purchase shares of Common Stock (or securities exchangeable for or
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<PAGE>
convertible into shares of Common Stock), then the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for such distribution by a fraction, of which (i) the numerator
shall be the current Market Price per share of Common Stock (as defined in
Paragraph 3(d)) on such record date, less the fair market value (as determined
by the Board of Directors of the Company, whose determination shall be
conclusive, and described in a notice to the Warrantholders) of the portion of
the evidences of indebtedness or assets so to be distributed or of such rights,
options or warrants applicable to one share of Common Stock and (ii) the
denominator shall be such current Market Price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
such transaction.
(d) CURRENT MARKET PRICE DEFINED. For the purpose of any computation
under Paragraphs 1(b), 3(b) and/or 3(c), the current Market Price per share of
Common Stock at any date shall be deemed to be the average daily Closing Price
of the shares of Common Stock for twenty consecutive trading days ending within
fifteen days before the date in question. The term "Closing Price" of the shares
of Common Stock for a day or days shall mean (i) if the shares of Common Stock
are listed or admitted for trading on a national securities exchange, the last
reported sales price regular way, or, in case no such reported sale takes place
on such day or days, the average of the reported closing bid and asked prices
regular way, in either case on the principal national securities exchange on
which the shares of the Common Stock are listed or admitted for trading, or (ii)
if the shares of Common Stock are not listed or admitted for trading on a
national securities exchange, (A) the last transaction price for the Common
Stock on The Nasdaq Stock Market ("Nasdaq") or, in the case no such reported
transaction takes place on such day or days, the average of the reported closing
bid and asked prices thereof quoted on Nasdaq, or (B) if the shares of Common
Stock are not quoted on Nasdaq, the average of the closing bid and asked prices
of the Common Stock as quoted on the Over-The-Counter Bulletin Board maintained
by the National Association of Securities Dealers, Inc. (the "Bulletin Board"),
or (C) if the shares of Common Stock are not quoted on Nasdaq nor on the
Bulletin Board, the average of the closing bid and asked prices of the common
stock in the over-the-counter market, as reported by Pinksheets.com, Inc., or
an equivalent generally accepted reporting service, or (iii) if on any such
trading day or days the shares of Common Stock are not quoted by any such
organization, the fair market value of the shares of Common Stock on such day or
days, as determined in good faith by the Board of Directors of the Company,
shall be used.
(e) MINIMUM ADJUSTMENT. Except as hereinafter provided, no adjustment
of the Exercise Price hereunder shall be made if such adjustment results in a
change of the Exercise Price then in effect of less than five cents ($.05) per
share. Any adjustment of less than five cents ($.05) per share of any Exercise
Price shall be carried forward and shall be made at the time of and together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to five cents ($.05) per share or more. However, upon
exercise of this Warrant Certificate, the Company shall make all necessary
adjustments (to the nearest cent) not theretofore made to the Exercise Price up
to and including the effective date upon which this Warrant Certificate is
exercised.
(f) NOTICE OF ADJUSTMENTS. Whenever the Exercise Price shall be
adjusted pursuant to this Section 3, the Company shall promptly deliver a
certificate signed by the President
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<PAGE>
or a Vice President and by the Chief Financial Officer, Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company,
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors of the
Company made any determination hereunder), by first class mail postage prepaid
to each Warrantholder.
(g) CAPITAL REORGANIZATIONS AND OTHER RECLASSIFICATIONS. In case of
any capital reorganization of the Company, or of any reclassification of the
shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in Paragraph 3(a)), or in case
of the consolidation of the Company with, or the merger of the Company with, or
merger of the Company into, any other corporation (other than a reclassification
of the shares of Common Stock referred to in Paragraph 3(a) or a consolidation
or merger which does not result in any reclassification or change of the
outstanding shares of Common Stock) or of the sale of the properties and assets
of the Company as, or substantially as, an entirety to any other corporation or
entity, each Warrant shall, after such capital reorganization, reclassification
of shares of Common Stock, consolidation, merger, or sale, be exercisable, upon
the terms and conditions specified in this Warrant Certificate, for the kind,
amount and number of shares or other securities, assets, or cash to which a
holder of the number of shares of Common Stock purchasable (at the time of such
capital reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale) upon exercise of such Warrant would have been
entitled to receive upon such capital reorganization, reclassification of shares
of Common Stock, consolidation, merger, or sale; and in any such case, if
necessary, the provisions set forth in this Section 3 with respect to the rights
and interests thereafter of the Warrantholder shall be appropriately adjusted so
as to be applicable, as nearly equivalent as possible, to any shares or other
securities, assets, or cash thereafter deliverable on the exercise of the
Warrants. The Company shall not effect any such consolidation, merger, or sale,
unless prior to or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Company) resulting from such
consolidation or merger or the corporation or entity purchasing such assets or
other appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the Warrantholder such shares, securities, assets, or
cash as, in accordance with the foregoing provisions, such holders may be
entitled to purchase and the other obligations hereunder. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a reclassification of the
shares of Common Stock for purposes of this Paragraph 3(e).
(h) ADJUSTMENTS TO OTHER SECURITIES. In the event that at any time, as
a result of an adjustment made pursuant to this Section 3, the Warrantholder
shall become entitled to purchase any shares or securities of the Company other
than the shares of Common Stock, thereafter the number of such other shares or
securities so purchasable upon exercise of each Warrant and the exercise price
for such shares or securities shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as possible to the provisions with
respect to the shares of Common Stock contained in Paragraphs 3(a) through (e),
inclusive.
(i) DEFERRAL OF ISSUANCE OF ADDITIONAL SHARES IN CERTAIN
CIRCUMSTANCES. In any case in which this Section 3 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
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<PAGE>
event issuing to the Warrantholder exercised after such record date the shares
of Common Stock, if any, issuable upon such exercise over and above the Warrant
Shares, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver as soon as practicable to such holder a due bill or other appropriate
instrument provided by the Company evidencing such holder's right to receive
such additional shares of Common Stock upon the occurrence of the event
requiring such adjustment.
4. DEFINITION OF COMMON STOCK.
--------------------------
The Common Stock issuable upon exercise of the Warrants shall be the
Common Stock as constituted on the date hereof except as otherwise provided in
Section 3.
5. REPLACEMENT OF SECURITIES.
-------------------------
If this Warrant Certificate shall be lost, stolen, mutilated or
destroyed, the Company shall, on such terms as to indemnity or otherwise as the
Company may in its discretion reasonably impose, issue a new certificate of like
tenor or date representing in the aggregate the right to subscribe for and
purchase the number of shares of Common Stock which may be subscribed for and
purchased hereunder. Any such new certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone.
6. REGISTRATION.
------------
This Warrant Certificate, as well as all other warrant certificates
representing Warrants shall be numbered and shall be registered in a register
(the "Warrant Register") maintained at the Company Offices as they are issued.
The Warrant Register shall list the name, address and Social Security or other
Federal Identification Number, if any, of all Warrantholders. The Company shall
be entitled to treat the Warrantholder as set forth in the Warrant Register as
the owner in fact of the Warrants as set forth therein for all purposes and
shall not be bound to recognize any equitable or other claim to or interest in
such Warrants on the part of any other person, and shall not be liable for any
registration of transfer of Warrants that are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer, or with such knowledge of such facts
that its participation therein amounts to bad faith.
7. TRANSFER.
--------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES
OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR
INVESTMENT PURPOSES AND NOT WITH A
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<PAGE>
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH WARRANTS AND SUCH SHARES
OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
8. EXCHANGE OF WARRANT CERTIFICATES.
--------------------------------
This Warrant Certificate may be exchanged for another certificate or
certificates entitling the Warrantholder thereof to purchase a like aggregate
number of Warrant Shares as this Warrant Certificate entitles such Warrantholder
to purchase. A Warrantholder desiring to so exchange this Warrant Certificate
shall make such request in writing delivered to the Company, and shall surrender
this Warrant Certificate therewith. Thereupon, the Company shall execute and
deliver to the person entitled thereto a new certificate or certificates, as the
case may be, as so requested.
9. NOTICES.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and, if to the Company, at the Company Offices or such other address as the
Company shall give notice thereof to the Warrantholder in accordance with this
Section 9.
10. MISCELLANEOUS.
-------------
This Warrant Certificate and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This certificate is deemed to have been delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State, without regard to its conflicts of laws principles. The
headings in this Warrant Certificate are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
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<PAGE>
11. EXPIRATION.
----------
Unless as hereinafter provided, the right to exercise these Warrants
shall expire at the Expiration Time.
Dated: January 2, 2001
VIZACOM INC.
By:
-----------------------------------
Name:
Title:
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<PAGE>
EXERCISE FORM
Dated: ,
--------------- ----
TO: VIZACOM INC.:
Complete if paying Exercise Price in cash or by check
-----------------------------------------------------
The undersigned hereby irrevocably elects to exercise the within
Warrant, to the extent of purchasing _________________ shares of Common Stock,
and hereby makes payment of $_____________ in payment of the actual Exercise
Price thereof.
Complete if paying Exercise Price through cashless exercise
-----------------------------------------------------------
The undersigned hereby irrevocably elects to exercise the within
Warrant, and elects to pay the Exercise Price by means of cancellation of
Warrants. The Maximum Number of shares of Common Stock the undersigned desires
to purchase (and lose the right to purchase) is .
--------
------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
---------------------------------------------------------
(Please type or print in block letters)
Taxpayer
Identification
Number:
----------------------------------------------------------
Address:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
------------------
Signature:
----------------------------------------------------------
(Signature must conform in all respects to the name of
the Warrantholder as set forth on the face of this
Warrant Certificate.)
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED,
---------------------------------------
(Please type or print in block letters)
hereby sells, assigns and transfers unto:
Name:
---------------------------------------------------------
(Please type or print in block letters)
Taxpayer
Identification
Number:
----------------------------------------------------------
Address:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
this Warrant Certificate and the Warrants represented by this Warrant
Certificate to the extent of ________________ Warrants and does hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Dated:
---------------------------
Signature:
--------------------------------------------------------------
(Signature must conform in all respects to the name of the
Warrantholder as set forth on the face of this Warrant
Certificate.)
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<PAGE>
Exhibit B
---------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE
NOR THE SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY
OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF SUCH WARRANTS AND SUCH SHARES OR OTHER SECURITIES
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE ARE
SUBJECT TO THE TERMS OF AN ESCROW AGREEMENT DATED AS OF
JANUARY 2, 2001 AMONG THE COMPANY, SALOMON GREY FINANCIAL
CORPORATION AND KAUFMAN & MOOMJIAN, LLC, AS ESCROW AGENT
VOID AFTER 5:00 P.M. ON DECEMBER 31, 2003
VIZACOM INC.
WARRANT CERTIFICATE
100,000 COMMON STOCK PURCHASE WARRANTS
Teaneck, New Jersey
Warrant Certificate No. SGFC-2 January 2, 2001
THIS IS TO CERTIFY THAT, for value received, Salomon Grey Financial
Corporation or registered assigns (the "Warrantholder") permitted by the terms
of this Warrant Certificate, is the registered owner of the number of Common
Stock Purchase Warrants (each, a "Warrant") set forth above, each Warrant
entitling the owner thereof to purchase from Vizacom Inc., a Delaware
corporation (the "Company"), at any time on or after February 15, 2001 and on or
prior to 5:00 P.M., New York City time, on December 31, 2003 (the "Expiration
Time"), one duly authorized, validly issued, fully paid and nonassessable share
(each, a "Warrant Share") of the common stock, par value $.001 per share
("Common Stock"), of the Company, at a price of $.50 per share (the "Exercise
Price"), all subject to the terms and conditions contained herein. The number of
Warrants evidenced by this Warrant Certificate (and the number and kind of
securities which may
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<PAGE>
be purchased upon exercise hereof) set forth above, and the Exercise Price per
share set forth above, are as of the date hereof.
As provided herein, the Exercise Price and the number of shares of
Common Stock or other securities which may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment.
This Warrant Certificate, together with any warrant certificate(s)
issued in replacement or substitution hereof (as provided for herein) evidencing
all or part of the Warrants evidenced hereby, are sometimes collectively
referred to herein as the "Warrant Certificates."
The rights of the registered holder of this Warrant Certificate shall
be subject to the following further terms and conditions:
1. EXERCISE OF WARRANTS.
--------------------
(a) The Warrants may be exercised, in whole or in part, on or after
February 15, 2001 and on or prior to the Expiration Time by surrendering this
Warrant Certificate, with the purchase form provided for herein duly executed by
the Warrantholder or by the Warrantholder's duly authorized attorney-in-fact, at
the principal office of the Company, presently located at Glenpointe Centre
East, 300 Frank W. Burr Boulevard - 7th Floor, Teaneck, New Jersey 07666, or at
such other office or agency in the United States as the Company may designate by
notice in writing to the Warrantholder (in either event, the "Company Offices"),
accompanied by payment in full, either in the form of cash, bank cashier's check
or certified check payable to the order of the Company, of the Exercise Price
payable in respect of the Warrants being exercised. If fewer than all of the
Warrants are exercised, the Company shall, upon each exercise prior to the
Expiration Time, execute and deliver to the Warrantholder a new Warrant
Certificate (dated as of the date hereof) evidencing the balance of the Warrants
that remain exercisable.
(b) Notwithstanding Section 1(a) above, the Warrants may be exercised,
in whole or in part, on a "cashless" basis, by stating in the attached exercise
purchase form provided herein such intention and the maximum number (the
"Maximum Number") of shares of Common Stock the Warrantholder desires to
purchase (and lose the right to purchase) in consideration of cancellation of
Warrants in payment for such exercise. The number of shares of Common Stock the
Warrantholder shall receive upon such exercise shall equal the difference
between the Maximum Number and the quotient that is obtained when the product of
the Maximum Number and the then current Exercise Price is divided by the then
current Market Price per share (as hereinafter defined).
(c) On the date of exercise of the Warrants, the Warrantholder
exercising same shall be deemed to have become the holder of record for all
purposes of the Warrant Shares to which the exercise relates.
(d) As soon as practicable after the exercise of all or part of the
Warrants evidenced by this Warrant Certificate, the Company, at its expense
(including the payment by it of
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<PAGE>
any applicable issue taxes), will cause to be issued in the name of and
delivered to the Warrantholder a certificate or certificates evidencing the
number of duly authorized, validly issued, fully paid and nonassessable Warrant
Shares to which the Warrantholder shall be entitled upon such exercise.
(e) No certificates for fractional Warrant Shares shall be issued upon
the exercise of any of the Warrants but, in lieu thereof, the Company shall,
upon exercise of all the Warrants, round up any fractional Warrant Share to the
nearest whole share of Common Stock.
2. ISSUANCE OF COMMON STOCK; RESERVATION OF SHARES.
-----------------------------------------------
(a) The Company covenants and agrees that all Warrant Shares which may
be issued upon the exercise of all or part of the Warrants will, upon issuance
in accordance with the terms hereof, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.
(b) The Company further covenants and agrees that if any shares of
Common Stock to be reserved for the purpose of the issuance of Warrant Shares
upon the exercise of Warrants require registration with, or approval of, any
governmental authority under any federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will promptly use
its best efforts to effect such registration or obtain such approval, as the
case may be.
3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND CHARACTER OF WARRANT SHARES, AND
---------------------------------------------------------------------------
NUMBER OF WARRANTS.
------------------
The Exercise Price and the number and kind of securities purchasable
upon the exercise of each Warrant shall be subject to adjustment from time to
time upon the happening of the events enumerated in this Section 3.
(a) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In case the
Company shall at any time on or before the Expiration Time:
(i) pay a dividend in shares of Common Stock or other stock
of the Company or make a distribution in shares of Common Stock or such
other stock to holders of all its outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock; or
(iv) issue by reclassification of its shares of Common Stock
other securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation),
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<PAGE>
then the number and kind of Warrant Shares purchasable upon exercise of each
Warrant outstanding immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which the Warrantholder would
have owned or have been entitled to receive after the happening of any of the
events described above had such Warrant been exercised in full immediately prior
to the earlier of the happening of such event or any record date in respect
thereto. In the event of any adjustment of the number of Warrant Shares
purchasable upon the exercise of each then outstanding Warrants pursuant to this
Paragraph 3(a), the Exercise Price shall be adjusted to be the amount resulting
from dividing the number of shares of Common Stock (including fractional shares
of Common Stock) covered by such Warrant immediately after such adjustment into
the total amount payable upon exercise of such Warrant in full immediately prior
to such adjustment. An adjustment made pursuant to this Paragraph 3(a) shall
become effective immediately after the effective date of such event retroactive
to the record date for any such event. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) EXTRAORDINARY DIVIDENDS. In case the Company shall at any time on
or before the Expiration Time fix a record date for the issuance of rights,
options, or warrants to all holders of its outstanding shares of Common Stock,
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase shares of Common Stock (or securities exchangeable for
or convertible into shares of Common Stock) at a price per share of Common Stock
(or having an exchange or conversion price per share of Common Stock, with
respect to a security exchangeable for or convertible into shares of Common
Stock) which is lower than the current Market Price per share of Common Stock
(as defined in Paragraph 3(d) below) on such record date, then the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, of which (i) the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial exchange or
conversion price of the exchangeable or convertible securities so to be offered)
would purchase at such current Market Price and (ii) the denominator shall be
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock to be offered for subscription or
purchase (or into which the exchangeable or convertible securities so to be
offered are initially exchangeable or convertible). Such adjustment shall become
effective at the close of business on such record date; however, to the extent
that shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock) are not delivered after the expiration of such rights,
options, or warrants, the Exercise Price shall be readjusted (but only with
respect to Warrants exercised after such expiration) to the Exercise Price which
would then be in effect had the adjustments made upon the issuance of such
rights, options, or warrants been made upon the basis of delivery of only the
number of shares of Common Stock (or securities exchangeable for or convertible
into shares of Common Stock) actually issued. In case any subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company and shall be described in a statement
mailed to the Warrantholder. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation.
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<PAGE>
(c) EXTRAORDINARY DISTRIBUTIONS. In case the Company shall at any time
after the original date of issuance of the Warrants distribute to all holders of
its shares of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) evidences of its indebtedness or assets (excluding cash dividends
and distributions payable out of consolidated net income or earned surplus in
accordance with Delaware law and dividends or distributions payable in shares of
stock described in Paragraph 3(a) above) or rights, options, or warrants or
exchangeable or convertible securities containing the right to subscribe for or
purchase shares of Common Stock (or securities exchangeable for or convertible
into shares of Common Stock), then the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the record date
for such distribution by a fraction, of which (i) the numerator shall be the
current Market Price per share of Common Stock (as defined in Paragraph 3(d)) on
such record date, less the fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and described
in a notice to the Warrantholders) of the portion of the evidences of
indebtedness or assets so to be distributed or of such rights, options or
warrants applicable to one share of Common Stock and (ii) the denominator shall
be such current Market Price per share of Common Stock. Such adjustment shall be
made whenever any such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for such transaction.
(d) CURRENT MARKET PRICE DEFINED. For the purpose of any computation
under Paragraphs 1(b), 3(b) and/or 3(c), the current Market Price per share of
Common Stock at any date shall be deemed to be the average daily Closing Price
of the shares of Common Stock for twenty consecutive trading days ending within
fifteen days before the date in question. The term "Closing Price" of the shares
of Common Stock for a day or days shall mean (i) if the shares of Common Stock
are listed or admitted for trading on a national securities exchange, the last
reported sales price regular way, or, in case no such reported sale takes place
on such day or days, the average of the reported closing bid and asked prices
regular way, in either case on the principal national securities exchange on
which the shares of the Common Stock are listed or admitted for trading, or (ii)
if the shares of Common Stock are not listed or admitted for trading on a
national securities exchange, (A) the last transaction price for the Common
Stock on The Nasdaq Stock Market ("Nasdaq") or, in the case no such reported
transaction takes place on such day or days, the average of the reported closing
bid and asked prices thereof quoted on Nasdaq, or (B) if the shares of Common
Stock are not quoted on Nasdaq, the average of the closing bid and asked prices
of the Common Stock as quoted on the Over-The-Counter Bulletin Board maintained
by the National Association of Securities Dealers, Inc. (the "Bulletin Board"),
or (C) if the shares of Common Stock are not quoted on Nasdaq nor on the
Bulletin Board, the average of the closing bid and asked prices of the common
stock in the over-the-counter market, as reported by Pinksheets.com, Inc., or
an equivalent generally accepted reporting service, or (iii) if on any such
trading day or days the shares of Common Stock are not quoted by any such
organization, the fair market value of the shares of Common Stock on such day or
days, as determined in good faith by the Board of Directors of the Company,
shall be used.
(e) MINIMUM ADJUSTMENT. Except as hereinafter provided, no adjustment
of the Exercise Price hereunder shall be made if such adjustment results in a
change of the Exercise Price then in effect of less than five cents ($.05) per
share. Any adjustment of less than five cents ($.05) per share of any Exercise
Price shall be carried forward and shall be made at the time of and together
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<PAGE>
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to five cents ($.05) per share or more. However, upon
exercise of this Warrant Certificate, the Company shall make all necessary
adjustments (to the nearest cent) not theretofore made to the Exercise Price up
to and including the effective date upon which this Warrant Certificate is
exercised.
(f) NOTICE OF ADJUSTMENTS. Whenever the Exercise Price shall be
adjusted pursuant to this Section 3, the Company shall promptly deliver a
certificate signed by the President or a Vice President and by the Chief
Financial Officer, Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary of the Company, setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated (including a description of the basis on
which the Board of Directors of the Company made any determination hereunder),
by first class mail postage prepaid to each Warrantholder.
(g) CAPITAL REORGANIZATIONS AND OTHER RECLASSIFICATIONS. In case of
any capital reorganization of the Company, or of any reclassification of the
shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in Paragraph 3(a)), or in case
of the consolidation of the Company with, or the merger of the Company with, or
merger of the Company into, any other corporation (other than a reclassification
of the shares of Common Stock referred to in Paragraph 3(a) or a consolidation
or merger which does not result in any reclassification or change of the
outstanding shares of Common Stock) or of the sale of the properties and assets
of the Company as, or substantially as, an entirety to any other corporation or
entity, each Warrant shall, after such capital reorganization, reclassification
of shares of Common Stock, consolidation, merger, or sale, be exercisable, upon
the terms and conditions specified in this Warrant Certificate, for the kind,
amount and number of shares or other securities, assets, or cash to which a
holder of the number of shares of Common Stock purchasable (at the time of such
capital reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale) upon exercise of such Warrant would have been
entitled to receive upon such capital reorganization, reclassification of shares
of Common Stock, consolidation, merger, or sale; and in any such case, if
necessary, the provisions set forth in this Section 3 with respect to the rights
and interests thereafter of the Warrantholder shall be appropriately adjusted so
as to be applicable, as nearly equivalent as possible, to any shares or other
securities, assets, or cash thereafter deliverable on the exercise of the
Warrants. The Company shall not effect any such consolidation, merger, or sale,
unless prior to or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Company) resulting from such
consolidation or merger or the corporation or entity purchasing such assets or
other appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the Warrantholder such shares, securities, assets, or
cash as, in accordance with the foregoing provisions, such holders may be
entitled to purchase and the other obligations hereunder. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a reclassification of the
shares of Common Stock for purposes of this Paragraph 3(e).
(h) ADJUSTMENTS TO OTHER SECURITIES. In the event that at any time, as
a result of an adjustment made pursuant to this Section 3, the Warrantholder
shall become entitled to purchase any shares or securities of the Company other
than the shares of Common Stock, thereafter the
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<PAGE>
number of such other shares or securities so purchasable upon exercise of
each Warrant and the exercise price for such shares or securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as possible to the provisions with respect to the shares of Common
Stock contained in Paragraphs 3(a) through (e), inclusive.
(i) DEFERRAL OF ISSUANCE OF ADDITIONAL SHARES IN CERTAIN
CIRCUMSTANCES. In any case in which this Section 3 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event issuing to the Warrantholder exercised after such record date the shares
of Common Stock, if any, issuable upon such exercise over and above the Warrant
Shares, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver as soon as practicable to such holder a due bill or other appropriate
instrument provided by the Company evidencing such holder's right to receive
such additional shares of Common Stock upon the occurrence of the event
requiring such adjustment.
4. DEFINITION OF COMMON STOCK.
--------------------------
The Common Stock issuable upon exercise of the Warrants shall be the
Common Stock as constituted on the date hereof except as otherwise provided in
Section 3.
5. REPLACEMENT OF SECURITIES.
-------------------------
If this Warrant Certificate shall be lost, stolen, mutilated or
destroyed, the Company shall, on such terms as to indemnity or otherwise as the
Company may in its discretion reasonably impose, issue a new certificate of like
tenor or date representing in the aggregate the right to subscribe for and
purchase the number of shares of Common Stock which may be subscribed for and
purchased hereunder. Any such new certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone.
6. REGISTRATION.
------------
This Warrant Certificate, as well as all other warrant certificates
representing Warrants shall be numbered and shall be registered in a register
(the "Warrant Register") maintained at the Company Offices as they are issued.
The Warrant Register shall list the name, address and Social Security or other
Federal Identification Number, if any, of all Warrantholders. The Company shall
be entitled to treat the Warrantholder as set forth in the Warrant Register as
the owner in fact of the Warrants as set forth therein for all purposes and
shall not be bound to recognize any equitable or other claim to or interest in
such Warrants on the part of any other person, and shall not be liable for any
registration of transfer of Warrants that are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer, or with such knowledge of such facts
that its participation therein amounts to bad faith.
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<PAGE>
7. TRANSFER.
--------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES
OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT
BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES OR OTHER
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH
WARRANTS AND SUCH SHARES OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS.
8. EXCHANGE OF WARRANT CERTIFICATES.
--------------------------------
This Warrant Certificate may be exchanged for another certificate or
certificates entitling the Warrantholder thereof to purchase a like aggregate
number of Warrant Shares as this Warrant Certificate entitles such Warrantholder
to purchase. A Warrantholder desiring to so exchange this Warrant Certificate
shall make such request in writing delivered to the Company, and shall surrender
this Warrant Certificate therewith. Thereupon, the Company shall execute and
deliver to the person entitled thereto a new certificate or certificates, as the
case may be, as so requested.
9. NOTICES.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and, if to the Company, at the Company Offices or such other address as the
Company shall give notice thereof to the Warrantholder in accordance with this
Section 9.
10. MISCELLANEOUS.
-------------
This Warrant Certificate and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This certificate is deemed to have been delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State, without regard to its conflicts of laws principles. The
headings in this Warrant Certificate are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
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<PAGE>
11. EXPIRATION.
----------
Unless as hereinafter provided, the right to exercise these Warrants
shall expire at the Expiration Time.
Dated: January 2, 2001
VIZACOM INC.
By:
------------------------------------
Name:
Title:
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<PAGE>
EXERCISE FORM
Dated: ,
--------------- ----
TO: VIZACOM INC.:
Complete if paying Exercise Price in cash or by check
-----------------------------------------------------
The undersigned hereby irrevocably elects to exercise the within
Warrant, to the extent of purchasing _________________ shares of Common Stock,
and hereby makes payment of $_____________ in payment of the actual Exercise
Price thereof.
Complete if paying Exercise Price through cashless exercise
-----------------------------------------------------------
The undersigned hereby irrevocably elects to exercise the within
Warrant, and elects to pay the Exercise Price by means of cancellation of
Warrants. The Maximum Number of shares of Common Stock the undersigned desires
to purchase (and lose the right to purchase) is .
--------
------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
---------------------------------------------------------
(Please type or print in block letters)
Taxpayer
Identification
Number:
----------------------------------------------------------
Address:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
------------------
Signature:
----------------------------------------------------------
(Signature must conform in all respects to the name of
the Warrantholder as set forth on the face of this
Warrant Certificate.)
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED,
---------------------------------------
(Please type or print in block letters)
hereby sells, assigns and transfers unto:
Name:
---------------------------------------------------------
(Please type or print in block letters)
Taxpayer
Identification
Number:
----------------------------------------------------------
Address:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
this Warrant Certificate and the Warrants represented by this Warrant
Certificate to the extent of ________________ Warrants and does hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Dated:
---------------------------
Signature:
--------------------------------------------------------------
(Signature must conform in all respects to the name of the
Warrantholder as set forth on the face of this Warrant
Certificate.)
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<PAGE>
Exhibit C
---------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE
NOR THE SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY
OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF SUCH WARRANTS AND SUCH SHARES OR OTHER SECURITIES
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE ARE
SUBJECT TO THE TERMS OF AN ESCROW AGREEMENT DATED AS OF
JANUARY 2, 2001 AMONG THE COMPANY, SALOMON GREY FINANCIAL
CORPORATION AND KAUFMAN & MOOMJIAN, LLC, AS ESCROW AGENT
VOID AFTER 5:00 P.M. ON DECEMBER 31, 2003
VIZACOM INC.
WARRANT CERTIFICATE
100,000 COMMON STOCK PURCHASE WARRANTS
Teaneck, New Jersey
Warrant Certificate No. SGFC-3 January 2, 2001
THIS IS TO CERTIFY THAT, for value received, Salomon Grey Financial
Corporation or registered assigns (the "Warrantholder") permitted by the terms
of this Warrant Certificate, is the registered owner of the number of Common
Stock Purchase Warrants (each, a "Warrant") set forth above, each Warrant
entitling the owner thereof to purchase from Vizacom Inc., a Delaware
corporation (the "Company"), at any time on or after June 30, 2001 and on or
prior to 5:00 P.M., New York City time, on December 31, 2003 (the "Expiration
Time"), one duly authorized, validly issued, fully paid and nonassessable share
(each, a "Warrant Share") of the common stock, par value $.001 per share
("Common Stock"), of the Company, at a price of $1.00 per share (the "Exercise
Price"), all subject to the terms and conditions contained herein. The number of
Warrants evidenced by this Warrant Certificate (and the number and kind of
securities
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<PAGE>
which may be purchased upon exercise hereof) set forth above, and the
Exercise Price per share set forth above, are as of the date hereof.
As provided herein, the Exercise Price and the number of shares of
Common Stock or other securities which may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment.
This Warrant Certificate, together with any warrant certificate(s)
issued in replacement or substitution hereof (as provided for herein) evidencing
all or part of the Warrants evidenced hereby, are sometimes collectively
referred to herein as the "Warrant Certificates."
The rights of the registered holder of this Warrant Certificate shall
be subject to the following further terms and conditions:
1. EXERCISE OF WARRANTS.
--------------------
(a) The Warrants may be exercised, in whole or in part, on or after
June 30, 2001 and on or prior to the Expiration Time by surrendering this
Warrant Certificate, with the purchase form provided for herein duly executed by
the Warrantholder or by the Warrantholder's duly authorized attorney-in-fact, at
the principal office of the Company, presently located at Glenpointe Centre
East, 300 Frank W. Burr Boulevard - 7th Floor, Teaneck, New Jersey 07666, or at
such other office or agency in the United States as the Company may designate by
notice in writing to the Warrantholder (in either event, the "Company Offices"),
accompanied by payment in full, either in the form of cash, bank cashier's check
or certified check payable to the order of the Company, of the Exercise Price
payable in respect of the Warrants being exercised. If fewer than all of the
Warrants are exercised, the Company shall, upon each exercise prior to the
Expiration Time, execute and deliver to the Warrantholder a new Warrant
Certificate (dated as of the date hereof) evidencing the balance of the Warrants
that remain exercisable.
(b) On the date of exercise of the Warrants, the Warrantholder
exercising same shall be deemed to have become the holder of record for all
purposes of the Warrant Shares to which the exercise relates.
(c) As soon as practicable after the exercise of all or part of the
Warrants evidenced by this Warrant Certificate, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to be
issued in the name of and delivered to the Warrantholder a certificate or
certificates evidencing the number of duly authorized, validly issued, fully
paid and nonassessable Warrant Shares to which the Warrantholder shall be
entitled upon such exercise.
(d) No certificates for fractional Warrant Shares shall be issued upon
the exercise of any of the Warrants but, in lieu thereof, the Company shall,
upon exercise of all the Warrants, round up any fractional Warrant Share to the
nearest whole share of Common Stock.
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<PAGE>
2. ISSUANCE OF COMMON STOCK; RESERVATION OF SHARES.
-----------------------------------------------
(a) The Company covenants and agrees that all Warrant Shares which may
be issued upon the exercise of all or part of the Warrants will, upon issuance
in accordance with the terms hereof, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.
(b) The Company further covenants and agrees that if any shares of
Common Stock to be reserved for the purpose of the issuance of Warrant Shares
upon the exercise of Warrants require registration with, or approval of, any
governmental authority under any federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will promptly use
its best efforts to effect such registration or obtain such approval, as the
case may be.
3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND CHARACTER OF WARRANT SHARES, AND
---------------------------------------------------------------------------
NUMBER OF WARRANTS.
------------------
The Exercise Price and the number and kind of securities purchasable
upon the exercise of each Warrant shall be subject to adjustment from time to
time upon the happening of the events enumerated in this Section 3.
(a) STOCK DIVIDENDS, SUBDIVISIONS A ND COMBINATIONS. In case the
Company shall at any time on or before the Expiration Time:
(i) pay a dividend in shares of Common Stock or other stock
of the Company or make a distribution in shares of Common Stock or such
other stock to holders of all its outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock; or
(iv) issue by reclassification of its shares of Common Stock
other securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation),
then the number and kind of Warrant Shares purchasable upon exercise of each
Warrant outstanding immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which the Warrantholder would
have owned or have been entitled to receive after the happening of any of the
events described above had such Warrant been exercised in full immediately prior
to the earlier of the happening of such event or any record date in respect
thereto. In the event of any adjustment of the number of Warrant Shares
purchasable upon the exercise of each then outstanding Warrants pursuant to this
Paragraph 3(a), the Exercise Price shall be adjusted to be the amount resulting
from
-3-
<PAGE>
dividing the number of shares of Common Stock (including fractional shares
of Common Stock) covered by such Warrant immediately after such adjustment into
the total amount payable upon exercise of such Warrant in full immediately prior
to such adjustment. An adjustment made pursuant to this Paragraph 3(a) shall
become effective immediately after the effective date of such event retroactive
to the record date for any such event. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) EXTRAORDINARY DIVIDENDS. In case the Company shall at any time on
or before the Expiration Time fix a record date for the issuance of rights,
options, or warrants to all holders of its outstanding shares of Common Stock,
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase shares of Common Stock (or securities exchangeable for
or convertible into shares of Common Stock) at a price per share of Common Stock
(or having an exchange or conversion price per share of Common Stock, with
respect to a security exchangeable for or convertible into shares of Common
Stock) which is lower than the current Market Price per share of Common Stock
(as defined in Paragraph 3(d) below) on such record date, then the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, of which (i) the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial exchange or
conversion price of the exchangeable or convertible securities so to be offered)
would purchase at such current Market Price and (ii) the denominator shall be
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock to be offered for subscription or
purchase (or into which the exchangeable or convertible securities so to be
offered are initially exchangeable or convertible). Such adjustment shall become
effective at the close of business on such record date; however, to the extent
that shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock) are not delivered after the expiration of such rights,
options, or warrants, the Exercise Price shall be readjusted (but only with
respect to Warrants exercised after such expiration) to the Exercise Price which
would then be in effect had the adjustments made upon the issuance of such
rights, options, or warrants been made upon the basis of delivery of only the
number of shares of Common Stock (or securities exchangeable for or convertible
into shares of Common Stock) actually issued. In case any subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company and shall be described in a statement
mailed to the Warrantholder. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation.
(c) EXTRAORDINARY DISTRIBUTIONS. In case the Company shall at any time
after the original date of issuance of the Warrants distribute to all holders of
its shares of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) evidences of its indebtedness or assets (excluding cash dividends
and distributions payable out of consolidated net income or earned surplus in
accordance with Delaware law and dividends or distributions payable in shares of
stock described in Paragraph 3(a) above) or rights, options, or warrants or
exchangeable or convertible securities containing the right to subscribe for or
purchase shares of Common Stock (or securities exchangeable for or
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<PAGE>
convertible into shares of Common Stock), then the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for such distribution by a fraction, of which (i) the numerator
shall be the current Market Price per share of Common Stock (as defined in
Paragraph 3(d)) on such record date, less the fair market value (as determined
by the Board of Directors of the Company, whose determination shall be
conclusive, and described in a notice to the Warrantholders) of the portion of
the evidences of indebtedness or assets so to be distributed or of such rights,
options or warrants applicable to one share of Common Stock and (ii) the
denominator shall be such current Market Price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
such transaction.
(d) CURRENT MARKET PRICE DEFINED. For the purpose of any computation
under Paragraphs 3(b) and/or 3(c), the current Market Price per share of Common
Stock at any date shall be deemed to be the average daily Closing Price of the
shares of Common Stock for twenty consecutive trading days ending within fifteen
days before the date in question. The term "Closing Price" of the shares of
Common Stock for a day or days shall mean (i) if the shares of Common Stock are
listed or admitted for trading on a national securities exchange, the last
reported sales price regular way, or, in case no such reported sale takes place
on such day or days, the average of the reported closing bid and asked prices
regular way, in either case on the principal national securities exchange on
which the shares of the Common Stock are listed or admitted for trading, or (ii)
if the shares of Common Stock are not listed or admitted for trading on a
national securities exchange, (A) the last transaction price for the Common
Stock on The Nasdaq Stock Market ("Nasdaq") or, in the case no such reported
transaction takes place on such day or days, the average of the reported closing
bid and asked prices thereof quoted on Nasdaq, or (B) if the shares of Common
Stock are not quoted on Nasdaq, the average of the closing bid and asked prices
of the Common Stock as quoted on the Over-The-Counter Bulletin Board maintained
by the National Association of Securities Dealers, Inc. (the "Bulletin Board"),
or (C) if the shares of Common Stock are not quoted on Nasdaq nor on the
Bulletin Board, the average of the closing bid and asked prices of the common
stock in the over-the-counter market, as reported by Pinksheets.com, Inc., or
an equivalent generally accepted reporting service, or (iii) if on any such
trading day or days the shares of Common Stock are not quoted by any such
organization, the fair market value of the shares of Common Stock on such day or
days, as determined in good faith by the Board of Directors of the Company,
shall be used.
(e) MINIMUM ADJUSTMENT. Except as hereinafter provided, no adjustment
of the Exercise Price hereunder shall be made if such adjustment results in a
change of the Exercise Price then in effect of less than five cents ($.05) per
share. Any adjustment of less than five cents ($.05) per share of any Exercise
Price shall be carried forward and shall be made at the time of and together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to five cents ($.05) per share or more. However, upon
exercise of this Warrant Certificate, the Company shall make all necessary
adjustments (to the nearest cent) not theretofore made to the Exercise Price up
to and including the effective date upon which this Warrant Certificate is
exercised.
(f) NOTICE OF ADJUSTMENTS. Whenever the Exercise Price shall be
adjusted pursuant to this Section 3, the Company shall promptly deliver a
certificate signed by the President
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<PAGE>
or a Vice President and by the Chief Financial Officer, Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company,
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors of the
Company made any determination hereunder), by first class mail postage prepaid
to each Warrantholder.
(g) CAPITAL REORGANIZATIONS AND OTHER RECLASSIFICATIONS. In case of
any capital reorganization of the Company, or of any reclassification of the
shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in Paragraph 3(a)), or in case
of the consolidation of the Company with, or the merger of the Company with, or
merger of the Company into, any other corporation (other than a reclassification
of the shares of Common Stock referred to in Paragraph 3(a) or a consolidation
or merger which does not result in any reclassification or change of the
outstanding shares of Common Stock) or of the sale of the properties and assets
of the Company as, or substantially as, an entirety to any other corporation or
entity, each Warrant shall, after such capital reorganization, reclassification
of shares of Common Stock, consolidation, merger, or sale, be exercisable, upon
the terms and conditions specified in this Warrant Certificate, for the kind,
amount and number of shares or other securities, assets, or cash to which a
holder of the number of shares of Common Stock purchasable (at the time of such
capital reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale) upon exercise of such Warrant would have been
entitled to receive upon such capital reorganization, reclassification of shares
of Common Stock, consolidation, merger, or sale; and in any such case, if
necessary, the provisions set forth in this Section 3 with respect to the rights
and interests thereafter of the Warrantholder shall be appropriately adjusted so
as to be applicable, as nearly equivalent as possible, to any shares or other
securities, assets, or cash thereafter deliverable on the exercise of the
Warrants. The Company shall not effect any such consolidation, merger, or sale,
unless prior to or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Company) resulting from such
consolidation or merger or the corporation or entity purchasing such assets or
other appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the Warrantholder such shares, securities, assets, or
cash as, in accordance with the foregoing provisions, such holders may be
entitled to purchase and the other obligations hereunder. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a reclassification of the
shares of Common Stock for purposes of this Paragraph 3(e).
(h) ADJUSTMENTS TO OTHER SECURITIES. In the event that at any time, as
a result of an adjustment made pursuant to this Section 3, the Warrantholder
shall become entitled to purchase any shares or securities of the Company other
than the shares of Common Stock, thereafter the number of such other shares or
securities so purchasable upon exercise of each Warrant and the exercise price
for such shares or securities shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as possible to the provisions with
respect to the shares of Common Stock contained in Paragraphs 3(a) through (e),
inclusive.
(i) DEFERRAL OF ISSUANCE OF ADDITIONAL SHARES IN CERTAIN
CIRCUMSTANCES. In any case in which this Section 3 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
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<PAGE>
event issuing to the Warrantholder exercised after such record date the shares
of Common Stock, if any, issuable upon such exercise over and above the Warrant
Shares, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver as soon as practicable to such holder a due bill or other appropriate
instrument provided by the Company evidencing such holder's right to receive
such additional shares of Common Stock upon the occurrence of the event
requiring such adjustment.
4. DEFINITION OF COMMON STOCK.
--------------------------
The Common Stock issuable upon exercise of the Warrants shall be the
Common Stock as constituted on the date hereof except as otherwise provided in
Section 3.
5. REPLACEMENT OF SECURITIES.
-------------------------
If this Warrant Certificate shall be lost, stolen, mutilated or
destroyed, the Company shall, on such terms as to indemnity or otherwise as the
Company may in its discretion reasonably impose, issue a new certificate of like
tenor or date representing in the aggregate the right to subscribe for and
purchase the number of shares of Common Stock which may be subscribed for and
purchased hereunder. Any such new certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone.
6. REGISTRATION.
------------
This Warrant Certificate, as well as all other warrant certificates
representing Warrants shall be numbered and shall be registered in a register
(the "Warrant Register") maintained at the Company Offices as they are issued.
The Warrant Register shall list the name, address and Social Security or other
Federal Identification Number, if any, of all Warrantholders. The Company shall
be entitled to treat the Warrantholder as set forth in the Warrant Register as
the owner in fact of the Warrants as set forth therein for all purposes and
shall not be bound to recognize any equitable or other claim to or interest in
such Warrants on the part of any other person, and shall not be liable for any
registration of transfer of Warrants that are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer, or with such knowledge of such facts
that its participation therein amounts to bad faith.
7. TRANSFER.
--------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES
OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR
INVESTMENT PURPOSES AND NOT WITH A
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<PAGE>
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH WARRANTS AND SUCH SHARES
OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
8. EXCHANGE OF WARRANT CERTIFICATES.
--------------------------------
This Warrant Certificate may be exchanged for another certificate or
certificates entitling the Warrantholder thereof to purchase a like aggregate
number of Warrant Shares as this Warrant Certificate entitles such Warrantholder
to purchase. A Warrantholder desiring to so exchange this Warrant Certificate
shall make such request in writing delivered to the Company, and shall surrender
this Warrant Certificate therewith. Thereupon, the Company shall execute and
deliver to the person entitled thereto a new certificate or certificates, as the
case may be, as so requested.
9. NOTICES.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and, if to the Company, at the Company Offices or such other address as the
Company shall give notice thereof to the Warrantholder in accordance with this
Section 9.
10. MISCELLANEOUS.
-------------
This Warrant Certificate and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This certificate is deemed to have been delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State, without regard to its conflicts of laws principles. The
headings in this Warrant Certificate are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
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<PAGE>
11. EXPIRATION.
----------
Unless as hereinafter provided, the right to exercise these Warrants
shall expire at the Expiration Time.
Dated: January 2, 2001
VIZACOM INC.
By:
------------------------------------
Name:
Title:
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<PAGE>
EXERCISE FORM
Dated: ,
--------------- ----
TO: VIZACOM INC.:
Complete if paying Exercise Price in cash or by check
-----------------------------------------------------
The undersigned hereby irrevocably elects to exercise the within
Warrant, to the extent of purchasing _________________ shares of Common Stock,
and hereby makes payment of $_____________ in payment of the actual Exercise
Price thereof.
Complete if paying Exercise Price through cashless exercise
-----------------------------------------------------------
The undersigned hereby irrevocably elects to exercise the within
Warrant, and elects to pay the Exercise Price by means of cancellation of
Warrants. The Maximum Number of shares of Common Stock the undersigned desires
to purchase (and lose the right to purchase) is .
--------
------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
---------------------------------------------------------
(Please type or print in block letters)
Taxpayer
Identification
Number:
----------------------------------------------------------
Address:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
------------------
Signature:
----------------------------------------------------------
(Signature must conform in all respects to the name of
the Warrantholder as set forth on the face of this
Warrant Certificate.)
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED,
---------------------------------------
(Please type or print in block letters)
hereby sells, assigns and transfers unto:
Name:
---------------------------------------------------------
(Please type or print in block letters)
Taxpayer
Identification
Number:
----------------------------------------------------------
Address:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
this Warrant Certificate and the Warrants represented by this Warrant
Certificate to the extent of ________________ Warrants and does hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Dated:
---------------------------
Signature:
--------------------------------------------------------------
(Signature must conform in all respects to the name of the
Warrantholder as set forth on the face of this Warrant
Certificate.)
-11-
<PAGE>
Exhibit D
---------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE
NOR THE SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY
OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF SUCH WARRANTS AND SUCH SHARES OR OTHER SECURITIES
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE ARE
SUBJECT TO THE TERMS OF AN ESCROW AGREEMENT DATED AS OF
JANUARY 2, 2001 AMONG THE COMPANY, SALOMON GREY FINANCIAL
CORPORATION AND KAUFMAN & MOOMJIAN, LLC, AS ESCROW AGENT
VOID AFTER 5:00 P.M. ON DECEMBER 31, 2003
VIZACOM INC.
WARRANT CERTIFICATE
200,000 COMMON STOCK PURCHASE WARRANTS
Teaneck, New Jersey
Warrant Certificate No. SGFC-4 January 2, 2001
THIS IS TO CERTIFY THAT, for value received, Salomon Grey Financial
Corporation or registered assigns (the "Warrantholder") permitted by the terms
of this Warrant Certificate, is the registered owner of the number of Common
Stock Purchase Warrants (each, a "Warrant") set forth above, each Warrant
entitling the owner thereof to purchase from Vizacom Inc., a Delaware
corporation (the "Company"), at any time on or after December 31, 2001 and on or
prior to 5:00 P.M., New York City time, on December 31, 2003 (the "Expiration
Time"), one duly authorized, validly issued, fully paid and nonassessable share
(each, a "Warrant Share") of the common stock, par value $.001 per share
("Common Stock"), of the Company, at a price of $1.00 per share (the "Exercise
Price"), all subject to the terms and conditions contained herein. The number of
Warrants evidenced by this Warrant Certificate (and the number and kind of
securities
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<PAGE>
which may be purchased upon exercise hereof) set forth above, and the
Exercise Price per share set forth above, are as of the date hereof.
As provided herein, the Exercise Price and the number of shares of
Common Stock or other securities which may be purchased upon the exercise of the
Warrants evidenced by this Warrant Certificate are, upon the happening of
certain events, subject to modification and adjustment.
This Warrant Certificate, together with any warrant certificate(s)
issued in replacement or substitution hereof (as provided for herein) evidencing
all or part of the Warrants evidenced hereby, are sometimes collectively
referred to herein as the "Warrant Certificates."
The rights of the registered holder of this Warrant Certificate shall
be subject to the following further terms and conditions:
1. EXERCISE OF WARRANTS.
--------------------
(a) The Warrants may be exercised, in whole or in part, on or after
December 31, 2001 and on or prior to the Expiration Time by surrendering this
Warrant Certificate, with the purchase form provided for herein duly executed by
the Warrantholder or by the Warrantholder's duly authorized attorney-in-fact, at
the principal office of the Company, presently located at Glenpointe Centre
East, 300 Frank W. Burr Boulevard - 7th Floor, Teaneck, New Jersey 07666, or at
such other office or agency in the United States as the Company may designate by
notice in writing to the Warrantholder (in either event, the "Company Offices"),
accompanied by payment in full, either in the form of cash, bank cashier's check
or certified check payable to the order of the Company, of the Exercise Price
payable in respect of the Warrants being exercised. If fewer than all of the
Warrants are exercised, the Company shall, upon each exercise prior to the
Expiration Time, execute and deliver to the Warrantholder a new Warrant
Certificate (dated as of the date hereof) evidencing the balance of the Warrants
that remain exercisable.
(b) On the date of exercise of the Warrants, the Warrantholder
exercising same shall be deemed to have become the holder of record for all
purposes of the Warrant Shares to which the exercise relates.
(c) As soon as practicable after the exercise of all or part of the
Warrants evidenced by this Warrant Certificate, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to be
issued in the name of and delivered to the Warrantholder a certificate or
certificates evidencing the number of duly authorized, validly issued, fully
paid and nonassessable Warrant Shares to which the Warrantholder shall be
entitled upon such exercise.
(d) No certificates for fractional Warrant Shares shall be issued upon
the exercise of any of the Warrants but, in lieu thereof, the Company shall,
upon exercise of all the Warrants, round up any fractional Warrant Share to the
nearest whole share of Common Stock.
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<PAGE>
2. ISSUANCE OF COMMON STOCK; RESERVATION OF SHARES.
-----------------------------------------------
(a) The Company covenants and agrees that all Warrant Shares which may
be issued upon the exercise of all or part of the Warrants will, upon issuance
in accordance with the terms hereof, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof.
(b) The Company further covenants and agrees that if any shares of
Common Stock to be reserved for the purpose of the issuance of Warrant Shares
upon the exercise of Warrants require registration with, or approval of, any
governmental authority under any federal or state law before such shares may be
validly issued or delivered upon exercise, then the Company will promptly use
its best efforts to effect such registration or obtain such approval, as the
case may be.
3. ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND CHARACTER OF WARRANT SHARES, AND
---------------------------------------------------------------------------
NUMBER OF WARRANTS.
------------------
The Exercise Price and the number and kind of securities purchasable
upon the exercise of each Warrant shall be subject to adjustment from time to
time upon the happening of the events enumerated in this Section 3.
(a) Stock Dividends, Subdivisions and Combinations. In case the
Company shall at any time on or before the Expiration Time:
(i) pay a dividend in shares of Common Stock or other stock
of the Company or make a distribution in shares of Common Stock or such
other stock to holders of all its outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock; or
(iv) issue by reclassification of its shares of Common Stock
other securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation),
then the number and kind of Warrant Shares purchasable upon exercise of each
Warrant outstanding immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which the Warrantholder would
have owned or have been entitled to receive after the happening of any of the
events described above had such Warrant been exercised in full immediately prior
to the earlier of the happening of such event or any record date in respect
thereto. In the event of any adjustment of the number of Warrant Shares
purchasable upon the exercise of each then outstanding Warrants pursuant to this
Paragraph 3(a), the Exercise Price shall be adjusted to be the amount resulting
from
-3-
<PAGE>
dividing the number of shares of Common Stock (including fractional shares
of Common Stock) covered by such Warrant immediately after such adjustment into
the total amount payable upon exercise of such Warrant in full immediately prior
to such adjustment. An adjustment made pursuant to this Paragraph 3(a) shall
become effective immediately after the effective date of such event retroactive
to the record date for any such event. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) EXTRAORDINARY DIVIDENDS. In case the Company shall at any time on
or before the Expiration Time fix a record date for the issuance of rights,
options, or warrants to all holders of its outstanding shares of Common Stock,
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase shares of Common Stock (or securities exchangeable for
or convertible into shares of Common Stock) at a price per share of Common Stock
(or having an exchange or conversion price per share of Common Stock, with
respect to a security exchangeable for or convertible into shares of Common
Stock) which is lower than the current Market Price per share of Common Stock
(as defined in Paragraph 3(d) below) on such record date, then the Exercise
Price shall be adjusted by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, of which (i) the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial exchange or
conversion price of the exchangeable or convertible securities so to be offered)
would purchase at such current Market Price and (ii) the denominator shall be
the number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock to be offered for subscription or
purchase (or into which the exchangeable or convertible securities so to be
offered are initially exchangeable or convertible). Such adjustment shall become
effective at the close of business on such record date; however, to the extent
that shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock) are not delivered after the expiration of such rights,
options, or warrants, the Exercise Price shall be readjusted (but only with
respect to Warrants exercised after such expiration) to the Exercise Price which
would then be in effect had the adjustments made upon the issuance of such
rights, options, or warrants been made upon the basis of delivery of only the
number of shares of Common Stock (or securities exchangeable for or convertible
into shares of Common Stock) actually issued. In case any subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company and shall be described in a statement
mailed to the Warrantholder. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation.
(c) EXTRAORDINARY DISTRIBUTIONS. In case the Company shall at any time
after the original date of issuance of the Warrants distribute to all holders of
its shares of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation) evidences of its indebtedness or assets (excluding cash dividends
and distributions payable out of consolidated net income or earned surplus in
accordance with Delaware law and dividends or distributions payable in shares of
stock described in Paragraph 3(a) above) or rights, options, or warrants or
exchangeable or convertible securities containing the right to subscribe for or
purchase shares of Common Stock (or securities exchangeable for or
-4-
<PAGE>
convertible into shares of Common Stock), then the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date for such distribution by a fraction, of which (i) the numerator
shall be the current Market Price per share of Common Stock (as defined in
Paragraph 3(d)) on such record date, less the fair market value (as determined
by the Board of Directors of the Company, whose determination shall be
conclusive, and described in a notice to the Warrantholders) of the portion of
the evidences of indebtedness or assets so to be distributed or of such rights,
options or warrants applicable to one share of Common Stock and (ii) the
denominator shall be such current Market Price per share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
such transaction.
(d) CURRENT MARKET PRICE DEFINED. For the purpose of any computation
under Paragraphs 3(b) and/or 3(c), the current Market Price per share of Common
Stock at any date shall be deemed to be the average daily Closing Price of the
shares of Common Stock for twenty consecutive trading days ending within fifteen
days before the date in question. The term "Closing Price" of the shares of
Common Stock for a day or days shall mean (i) if the shares of Common Stock are
listed or admitted for trading on a national securities exchange, the last
reported sales price regular way, or, in case no such reported sale takes place
on such day or days, the average of the reported closing bid and asked prices
regular way, in either case on the principal national securities exchange on
which the shares of the Common Stock are listed or admitted for trading, or (ii)
if the shares of Common Stock are not listed or admitted for trading on a
national securities exchange, (A) the last transaction price for the Common
Stock on The Nasdaq Stock Market ("Nasdaq") or, in the case no such reported
transaction takes place on such day or days, the average of the reported closing
bid and asked prices thereof quoted on Nasdaq, or (B) if the shares of Common
Stock are not quoted on Nasdaq, the average of the closing bid and asked prices
of the Common Stock as quoted on the Over-The-Counter Bulletin Board maintained
by the National Association of Securities Dealers, Inc. (the "Bulletin Board"),
or (C) if the shares of Common Stock are not quoted on Nasdaq nor on the
Bulletin Board, the average of the closing bid and asked prices of the common
stock in the over-the-counter market, as reported by Pinksheets.com, Inc., or
an equivalent generally accepted reporting service, or (iii) if on any such
trading day or days the shares of Common Stock are not quoted by any such
organization, the fair market value of the shares of Common Stock on such day or
days, as determined in good faith by the Board of Directors of the Company,
shall be used.
(e) MINIMUM ADJUSTMENT. Except as hereinafter provided, no adjustment
of the Exercise Price hereunder shall be made if such adjustment results in a
change of the Exercise Price then in effect of less than five cents ($.05) per
share. Any adjustment of less than five cents ($.05) per share of any Exercise
Price shall be carried forward and shall be made at the time of and together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to five cents ($.05) per share or more. However, upon
exercise of this Warrant Certificate, the Company shall make all necessary
adjustments (to the nearest cent) not theretofore made to the Exercise Price up
to and including the effective date upon which this Warrant Certificate is
exercised.
(f) NOTICE OF ADJUSTMENTS. Whenever the Exercise Price shall be
adjusted pursuant to this Section 3, the Company shall promptly deliver a
certificate signed by the President
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<PAGE>
or a Vice President and by the Chief Financial Officer, Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company,
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Board of Directors of the
Company made any determination hereunder), by first class mail postage prepaid
to each Warrantholder.
(g) CAPITAL REORGANIZATIONS AND OTHER RECLASSIFICATIONS. In case of
any capital reorganization of the Company, or of any reclassification of the
shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in Paragraph 3(a)), or in case
of the consolidation of the Company with, or the merger of the Company with, or
merger of the Company into, any other corporation (other than a reclassification
of the shares of Common Stock referred to in Paragraph 3(a) or a consolidation
or merger which does not result in any reclassification or change of the
outstanding shares of Common Stock) or of the sale of the properties and assets
of the Company as, or substantially as, an entirety to any other corporation or
entity, each Warrant shall, after such capital reorganization, reclassification
of shares of Common Stock, consolidation, merger, or sale, be exercisable, upon
the terms and conditions specified in this Warrant Certificate, for the kind,
amount and number of shares or other securities, assets, or cash to which a
holder of the number of shares of Common Stock purchasable (at the time of such
capital reorganization, reclassification of shares of Common Stock,
consolidation, merger or sale) upon exercise of such Warrant would have been
entitled to receive upon such capital reorganization, reclassification of shares
of Common Stock, consolidation, merger, or sale; and in any such case, if
necessary, the provisions set forth in this Section 3 with respect to the rights
and interests thereafter of the Warrantholder shall be appropriately adjusted so
as to be applicable, as nearly equivalent as possible, to any shares or other
securities, assets, or cash thereafter deliverable on the exercise of the
Warrants. The Company shall not effect any such consolidation, merger, or sale,
unless prior to or simultaneously with the consummation thereof the successor
corporation or entity (if other than the Company) resulting from such
consolidation or merger or the corporation or entity purchasing such assets or
other appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the Warrantholder such shares, securities, assets, or
cash as, in accordance with the foregoing provisions, such holders may be
entitled to purchase and the other obligations hereunder. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a reclassification of the
shares of Common Stock for purposes of this Paragraph 3(e).
(h) ADJUSTMENTS TO OTHER SECURITIES. In the event that at any time, as
a result of an adjustment made pursuant to this Section 3, the Warrantholder
shall become entitled to purchase any shares or securities of the Company other
than the shares of Common Stock, thereafter the number of such other shares or
securities so purchasable upon exercise of each Warrant and the exercise price
for such shares or securities shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as possible to the provisions with
respect to the shares of Common Stock contained in Paragraphs 3(a) through (e),
inclusive.
(i) DEFERRAL OF ISSUANCE OF ADDITIONAL SHARES IN CERTAIN
CIRCUMSTANCES. In any case in which this Section 3 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
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<PAGE>
event issuing to the Warrantholder exercised after such record date the shares
of Common Stock, if any, issuable upon such exercise over and above the Warrant
Shares, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver as soon as practicable to such holder a due bill or other appropriate
instrument provided by the Company evidencing such holder's right to receive
such additional shares of Common Stock upon the occurrence of the event
requiring such adjustment.
4. DEFINITION OF COMMON STOCK.
--------------------------
The Common Stock issuable upon exercise of the Warrants shall be the
Common Stock as constituted on the date hereof except as otherwise provided in
Section 3.
5. REPLACEMENT OF SECURITIES.
-------------------------
If this Warrant Certificate shall be lost, stolen, mutilated or
destroyed, the Company shall, on such terms as to indemnity or otherwise as the
Company may in its discretion reasonably impose, issue a new certificate of like
tenor or date representing in the aggregate the right to subscribe for and
purchase the number of shares of Common Stock which may be subscribed for and
purchased hereunder. Any such new certificate shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant Certificate shall be at any time
enforceable by anyone.
6. REGISTRATION.
------------
This Warrant Certificate, as well as all other warrant certificates
representing Warrants shall be numbered and shall be registered in a register
(the "Warrant Register") maintained at the Company Offices as they are issued.
The Warrant Register shall list the name, address and Social Security or other
Federal Identification Number, if any, of all Warrantholders. The Company shall
be entitled to treat the Warrantholder as set forth in the Warrant Register as
the owner in fact of the Warrants as set forth therein for all purposes and
shall not be bound to recognize any equitable or other claim to or interest in
such Warrants on the part of any other person, and shall not be liable for any
registration of transfer of Warrants that are registered or to be registered in
the name of a fiduciary or the nominee of a fiduciary unless made with the
actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer, or with such knowledge of such facts
that its participation therein amounts to bad faith.
7. TRANSFER.
--------
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES
OF COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR
INVESTMENT PURPOSES AND NOT WITH A
-7-
<PAGE>
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES OR OTHER SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH WARRANTS AND SUCH SHARES
OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
8. EXCHANGE OF WARRANT CERTIFICATES.
--------------------------------
This Warrant Certificate may be exchanged for another certificate or
certificates entitling the Warrantholder thereof to purchase a like aggregate
number of Warrant Shares as this Warrant Certificate entitles such Warrantholder
to purchase. A Warrantholder desiring to so exchange this Warrant Certificate
shall make such request in writing delivered to the Company, and shall surrender
this Warrant Certificate therewith. Thereupon, the Company shall execute and
deliver to the person entitled thereto a new certificate or certificates, as the
case may be, as so requested.
9. NOTICES.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and, if to the Company, at the Company Offices or such other address as the
Company shall give notice thereof to the Warrantholder in accordance with this
Section 9.
10. MISCELLANEOUS.
-------------
This Warrant Certificate and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This certificate is deemed to have been delivered in the State of New
York and shall be construed and enforced in accordance with and governed by the
laws of such State, without regard to its conflicts of laws principles. The
headings in this Warrant Certificate are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
-8-
<PAGE>
11. EXPIRATION.
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Unless as hereinafter provided, the right to exercise these Warrants
shall expire at the Expiration Time.
Dated: January 2, 2001
VIZACOM INC.
By:
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Name:
Title:
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<PAGE>
EXERCISE FORM
Dated: ,
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TO: VIZACOM INC.:
Complete if paying Exercise Price in cash or by check
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The undersigned hereby irrevocably elects to exercise the within
Warrant, to the extent of purchasing _________________ shares of Common Stock,
and hereby makes payment of $_____________ in payment of the actual Exercise
Price thereof.
Complete if paying Exercise Price through cashless exercise
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The undersigned hereby irrevocably elects to exercise the within
Warrant, and elects to pay the Exercise Price by means of cancellation of
Warrants. The Maximum Number of shares of Common Stock the undersigned desires
to purchase (and lose the right to purchase) is .
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INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
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(Please type or print in block letters)
Taxpayer
Identification
Number:
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Address:
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Signature:
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(Signature must conform in all respects to the name of
the Warrantholder as set forth on the face of this
Warrant Certificate.)
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED,
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(Please type or print in block letters)
hereby sells, assigns and transfers unto:
Name:
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(Please type or print in block letters)
Taxpayer
Identification
Number:
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Address:
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this Warrant Certificate and the Warrants represented by this Warrant
Certificate to the extent of ________________ Warrants and does hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Dated:
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Signature:
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(Signature must conform in all respects to the name of the
Warrantholder as set forth on the face of this Warrant
Certificate.)
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