exv4w5



 






Exhibit 4.5





THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
FORTUNE DIVERSIFIED INDUSTRIES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.



Right to Purchase up to 13,636 Shares of Common Stock of

FORTUNE DIVERSIFIED INDUSTRIES, INC.

(subject to adjustment as provided herein)




COMMON STOCK PURCHASE WARRANT




	 	 	 
	No.                     2                    

	 	Issue Date: January ___, 2006






     FORTUNE DIVERSIFIED INDUSTRIES, INC., a corporation organized under the laws of the State of
Indiana (the “Company”), hereby certifies that, for value received, CB CAPITAL PARTNERS, INC. or
assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the
Company (as defined herein) from and after the Issue Date of this Warrant and at any time or from
time to time before 5:00 p.m., Indianapolis, Indiana time, through the close of business November
21, 2010 (the “Expiration Date”), up to 13,636 fully paid and nonassessable shares of Common Stock
(as hereinafter defined), $0.10 par value per share, at the applicable Exercise Price per share (as
defined below). The number and character of such shares of Common Stock and the applicable
Exercise Price per share are subject to adjustment as provided herein.



     As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:




     (a) The term “Company” shall include Fortune Diversified Industries, Inc. and any
corporation which shall succeed, or assume the obligations of, Fortune Diversified
Industries, Inc. hereunder.




     (b) The term “Common Stock” includes (i) the Company’s Common Stock, par value $0.10
per share; and (ii) any other securities into which or for which any of the securities
described in the preceding clause (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.




     (c) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise)



 









 






which the holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.




     (d) The “Exercise Price” applicable under this Warrant, and subject to adjustment as
set forth herein, shall be a price of $6.60 per share for the all shares acquired hereunder.



     1. Exercise of Warrant.



     1.1. Number of Shares Issuable upon Exercise. From and after the date hereof through
and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this
Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the
form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.



     1.2. Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of
Common Stock as of a particular date (the “Determination Date”) shall mean:




     (a) If the Company’s Common Stock is traded on the American Stock Exchange or another
national exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock
Market, Inc. (“NASDAQ”), then the closing or last sale price, respectively, reported for the
last business day immediately preceding the Determination Date.




     (b) If the Company’s Common Stock is not traded on the American Stock Exchange or
another national exchange or on the Nasdaq but is traded on the NASD Over the Counter
Bulletin Board, then the mean of the average of the closing bid and asked prices reported
for the last business day immediately preceding the Determination Date.




     (c) Except as provided in clause (d) below, if the Company’s Common Stock is not
publicly traded, then as the Holder and the Company agree or in the absence of agreement by
arbitration in accordance with the rules then in effect of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided.




     (d) If the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s
articles, then all amounts to be payable per share to holders of the Common Stock pursuant
to the articles in the event of such liquidation, dissolution or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation under the
articles , assuming for the purposes of this clause (d) that all of the shares of Common
Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date.



     1.3. Company Acknowledgment. The Company will, at the time of the exercise of this
Warrant, upon the request of the Holder hereof acknowledge in writing its



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continuing obligation to afford to such Holder any rights to which such Holder shall continue
to be entitled after such exercise in accordance with the provisions of this Warrant. If the
Holder shall fail to make any such request, such failure shall not affect the continuing obligation
of the Company to afford to such Holder any such rights.



        1.4. Trustee for Warrant Holders. In the event that a bank or trust company shall
have been appointed as trustee for the Holders of this Warrant pursuant to Subsection 3.2, such
bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter
described) and shall accept, in its own name for the account of the Company or such successor
person as may be entitled thereto, all amounts otherwise payable to the Company or such successor,
as the case may be, on exercise of this Warrant pursuant to this Section 1.



     2. Procedure for Exercise.



        2.1. Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares in accordance herewith. As
soon as practicable after the exercise of this Warrant in full or in part, and in any event,
subject to the Company’s receipt of approval of the required Additional Listing Application from
The American Stock Exchange, within three (3) business days thereafter 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 Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct in compliance with applicable securities laws, a certificate or
certificates for the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus,
in lieu of any fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then Fair Market Value of one full share, together with any other
stock or other securities and property (including cash, where applicable) to which such Holder is
entitled upon such exercise pursuant to Section 1 or otherwise.



        2.2. Exercise. Payment may be made in cash or by certified check payable to the
order of the Company equal to the applicable aggregate Exercise Price for the number of shares of
Common Stock specified in such Exercise Notice (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to the Holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.



     3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.



        3.1. Reorganization, Consolidation, Merger, Etc. In case at any time or from time to
time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other
person, or (c) transfer all or substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and adequate



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provision shall be made by the Company whereby the Holder, on the exercise hereof as provided
in Section 1 at any time after the consummation of such reorganization, consolidation or merger or
the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common
Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective
date, the stock and other securities and property (including cash) to which such Holder would have
been entitled upon such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.



     3.2. Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company, concurrently with
any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be
delivered to the Holder the stock and other securities and property (including cash, where
applicable) receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so instruct
the Company, to a bank or trust company specified by the Holder as trustee for the Holder (the
“Trustee”).



     3.3. Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant
shall continue in full force and effect and the terms hereof shall be applicable to the shares of
stock and other securities and property receivable on the exercise of this Warrant after the
consummation of such reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant
does not continue in full force and effect after the consummation of the transactions described in
this Section 3, then the Company’s securities and property (including cash, where applicable)
receivable by the Holder will be delivered to the Holder or the Trustee as contemplated by Section
3.2.



     4. Extraordinary Events Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding
Common Stock or any preferred stock issued by the Company (b) subdivide its outstanding shares of
Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock, then, in each such event, the Exercise Price shall, simultaneously with
the happening of such event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to
such event and the denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be the Exercise Price
then in effect. The Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4. The number of
shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the
number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the Exercise Price that would
otherwise



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(but for the provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise (taking into account the provisions of this
Section 4).



     5. Certificate as to Adjustments. In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, the
Company at its expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms of this Warrant
and prepare a certificate setting forth such adjustment or readjustment and showing in detail the
facts upon which such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of Common Stock (or
Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as
provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the
Holder and any Warrant agent of the Company (appointed pursuant to Section 11 hereof).



     6. Reservation of Stock Issuable on Exercise of Warrant. The Company will at all
times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant,
shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this
Warrant.



     7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with
the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement
Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance
with applicable securities laws, which shall include, without limitation, the provision of a legal
opinion from the Transferor’s counsel that such transfer is exempt from the registration
requirements of applicable securities laws, the Company at its expense (but with payment by the
Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the
Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the
transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock called for on the
face or faces of the Warrant so surrendered by the Transferor.



     8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver,
in lieu thereof, a new Warrant of like tenor.



     9. Registration Rights. The Holder has been granted certain registration rights by
the Company. These registration rights are set forth in a Registration Rights Agreement entered



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into by the Company and Holder dated as of the date hereof, as the same may be amended,
modified and/or supplemented from time to time.



     10. Maximum Exercise. Notwithstanding anything contained herein to the contrary, the
Holder shall not be entitled to exercise this Warrant in connection with that number of shares of
Common Stock which would exceed the difference between (i) 4.99% of the issued and outstanding
shares of Common Stock and (ii) the number of shares of Common Stock beneficially owned by the
Holder. For the purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act, as amended, and Regulation 13d-3
thereunder.



     11. Warrant Agent. The Company may, by written notice to the each Holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.



     12. Transfer on the Company’s Books. Until this Warrant is transferred on the books
of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.



     13. No Rights as Shareholder until Exercise. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof.
Upon the surrender of this Warrant and the payment of the aggregate Exercise Price, the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or payment.



     14. Notices, Etc. All notices and other communications from the Company to the Holder
shall be mailed by first class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company in writing by such Holder or, until any such Holder
furnishes to the Company an address, then to, and at the address of, the last Holder who has so
furnished an address to the Company.



     15. Miscellaneous. This Warrant 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 WARRANT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF INDIANA WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY
THIS WARRANT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF INDIANA OR IN THE FEDERAL COURTS LOCATED
IN THE STATE OF INDIANA. The individuals executing this Warrant on behalf of the Company agree to
submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorneys’ fees and costs. In the event
that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to



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conform with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of any other provision
of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any other provision
hereof.



[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]




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     IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.



	 	 	 	 	 
	 	 	FORTUNE DIVERSIFIED INDUSTRIES, INC.
	 
	 	 	 	 
	WITNESS:
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





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Exhibit A




FORM OF SUBSCRIPTION

(To Be Signed Only On Exercise Of Warrant)




	 	 	 	 	 
	TO:

	 	[Newco]	 	 
	 
	 	 	 	 
	 

	 	Attention:
	 	Chief Financial Officer






The undersigned, pursuant to the provisions set forth in the attached Warrant (No.___), hereby
irrevocably elects to purchase
                     shares of the Common Stock covered by such Warrant.



The undersigned herewith makes payment of the full Exercise Price for such shares at the price per
share provided for in such Warrant, which is $6.60. Such payment takes the form of $                     in
lawful money of the United States.



     The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to                                                                                                      whose address is
                                                                                                                                                                                    .



     The undersigned represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made pursuant to registration of
the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to
an exemption from registration under the Securities Act.



	 	 	 	 	 	 	 	 	 
	Dated:                            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform to name of holder as specified on the face
of the Warrant)
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 





A-1









 






Exhibit B




FORM OF TRANSFEROR ENDORSEMENT

(To Be Signed Only On Transfer Of Warrant)




     For value received, the undersigned hereby sells, assigns, and transfers unto the person(s)
named below under the heading “Transferees” the right represented by the within Warrant to purchase
the percentage and number of shares of Common Stock of Fortune Diversified Industries, Inc. into
which the within Warrant relates specified under the headings “Percentage Transferred” and “Number
Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person
Attorney to transfer its respective right on the books of Fortune Diversified Industries, Inc. with
full power of substitution in the premises.



	 	 	 	 	 	 	 
	 	 	 	 	Percentage	 	Number
	Transferees	 	Address	 	Transferred	 	Transferred
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 
	 	 





	 	 	 	 	 	 	 	 	 
	Dated:                            
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature must conform to name of holder as specified on the face
of the Warrant)
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 





	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SIGNED IN THE PRESENCE OF:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Name)

	ACCEPTED AND AGREED:	 	 	 	 	 	 
	[TRANSFEREE]	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Name)
	 	 	 	 	 	 






B-1