Document:

exv4w3

 

Exhibit 4.3

TESORO CORPORATION

and each of the Guarantors named herein

8% SENIOR SECURED NOTES DUE 2008

 

SUPPLEMENTAL INDENTURE

Dated November 14, 2005

 

The Bank of New York

Trustee

 

 

 

 

     This SUPPLEMENTAL INDENTURE (the “Supplemental Indenture”), dated as of November 14,
2005, is by and among Tesoro Corporation, a Delaware corporation (the “Issuer”), the direct
or indirect subsidiaries of the Issuer listed on the signature pages hereof (collectively, the
“Guarantors”) and The Bank of New York, as trustee under the indenture referred to below
(the “Trustee”).

     WHEREAS, the Issuer and certain of the Guarantors have heretofore executed and delivered to
the Trustee the indenture dated as of April 17, 2003 (as amended and supplemented and in effect,
the “Indenture”), providing for the initial original issuance of an aggregate principal
amount of $375,000,000 of 8% Senior Secured Notes due 2008 (the “Notes”);

     WHEREAS, the Issuer and the Guarantors propose to amend the Indenture (the “Proposed
Amendments”), which Proposed Amendments must be approved with the written consent of the
Holders of at least a majority in aggregate principal amount of the outstanding Notes;

     WHEREAS, the Issuer has solicited the consent of the Holders of the Notes pursuant to the
Offer to Purchase and Consent Solicitation Statement dated October 31, 2005, as amended,
supplemented or modified (the “Consent Solicitation Statement”) to the Proposed Amendments
to the Indenture upon the terms and subject to the conditions set forth therein;

     WHEREAS, pursuant to Section 9.02 of the Indenture, the Issuer and the Trustee may amend or
supplement the Indenture as contemplated hereby provided that the Holders of at least a majority in
aggregate principal amount of Notes then outstanding have consented;

     WHEREAS, the Issuer has received and delivered or caused to be delivered to the satisfaction
of the Trustee the consent of the Holders of at least a majority in aggregate principal amount of
the outstanding Notes to the Proposed Amendments pursuant to the Consent Solicitation Statement;

     WHEREAS, the Trustee is in receipt of such written consents;

     WHEREAS, the Issuer and each Guarantor has been authorized by a resolution of its respective
board of directors or board of managers to enter into this Supplemental Indenture;

     WHEREAS, all other acts and proceedings required by law, by the Indenture and by the
certificate or articles of incorporation and by-laws or similar organizational documents of the
Issuer and the Guarantors to make this Supplemental Indenture a valid and binding agreement for the
purposes expressed herein, in accordance with its terms, have been duly done and performed;

     WHEREAS, pursuant to Section 9.02 and Section 9.06 of the Indenture, the Trustee is authorized
to execute this Supplemental Indenture;

     WHEREAS, following the execution of this Supplemental Indenture, the terms hereof will become
operative (the “Operative Date”) on the first date that the Issuer purchases the Notes
validly tendered in the “Offer to Purchase” contemplated by the Consent Solicitation Statement; and

     WHEREAS, the terms of this Supplemental Indenture shall be null and void if the Operative Date
does not occur on or prior to December 15, 2005.

 

 

     NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

     That, for and in consideration of the premises herein contained and in order to effect the
Proposed Amendments contained in the Consent Solicitation Statement, pursuant to Section 9.02 of
the Indenture the Issuer and the Guarantors agree with the Trustee as follows:

ARTICLE ONE

AMENDMENT OF INDENTURE

     SECTION 1.01. Amendment of Indenture. Effective as of the Operative Date, this Supplemental
Indenture amends the Indenture as provided for herein. The Issuer and the Guarantors acknowledge
and agree that no amendment or waiver of the provisions described in Section 9.02 of the Indenture
requiring the consent of each affected Holder has been made hereby. If the Operative Date does not
occur on or prior to December 15, 2005, then the terms of this Supplemental Indenture shall be null
and void and the Indenture shall continue in full force and effect without any modification hereby.
The Issuer shall give the Trustee prompt written notice of the Operative Date.

     SECTION 1.02. Amendment of Section 1.01. Section 1.01 of the Indenture is hereby amended by
(a) deleting in their entirety the definitions of “Acquired Debt”, “Borrowing Base”, “Calculation
Date”, “Collateral Proceeds Offer”, “Consolidated Cash Flow”, “Consolidated Net Income”, “Fixed
Charge Coverage Ratio”, “Fixed Charges”, “Net Income”, “Payment Default”, “Permitted Debt”,
“Restricted Payments” and “Unrestricted Subsidiary” contained in the Indenture and (b) adding the
following defined term to Section 1.01 of the Indenture:

     "incur” means to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to any Indebtedness.

     SECTION 1.03. Amendment of Section 1.02. Section 1.02 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 1.02. Other Definitions.

	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	"Asset Sale Offer”
	 	 	3.09	 
	"DTC”
	 	 	2.03	 
	"Event of Default”
	 	 	6.01	 
	"Funding Guarantor”
	 	 	13.05	 
	"Indemnitee”
	 	 	10.07	 
	"Legal Defeasance”
	 	 	8.03	 
	"Offer Amount”
	 	 	3.09	 
	"Offer Period”
	 	 	3.09	 
	"Original Notes”
	 	 	2.02	 
	"Paying Agent”
	 	 	2.03	 
	"Processing and Sale Period”
	 	 	11.04	 
	"Purchase Date”
	 	 	3.09	 
	"Registrar”
	 	 	2.03	 
	"Suspended Covenant”
	 	 	4.19	 

 

 

     SECTION 1.04. Amendment to Section 4.02. Section 4.02 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.02. [Intentionally Omitted.]

     SECTION 1.05. Amendment to Section 4.04. Section 4.04 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.04. [Intentionally Omitted.]

     SECTION 1.06. Amendment to Section 4.05. Section 4.05 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.05. [Intentionally Omitted.]

     SECTION 1.07. Amendment to Section 4.06. Section 4.06 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.06. [Intentionally Omitted.]

     SECTION 1.08. Amendment to Section 4.07. Section 4.07 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.07. [Intentionally Omitted.]

     SECTION 1.09. Amendment to Section 4.08. Section 4.08 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.08. [Intentionally Omitted.]

     SECTION 1.10. Amendment to Section 4.09. Section 4.09 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.09. [Intentionally Omitted.]

     SECTION 1.11. Amendment to Section 4.10. Section 4.10 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.10. [Intentionally Omitted.]

     SECTION 1.12. Amendment to Section 4.11. Section 4.11 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.11. [Intentionally Omitted.]

     SECTION 1.13. Amendment to Section 4.12. Section 4.12 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.12. [Intentionally Omitted.]

 

 

     SECTION 1.14. Amendment to Section 4.13. Section 4.13 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.13. [Intentionally Omitted.]

     SECTION 1.15. Amendment to Section 4.14. Section 4.14 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.14. [Intentionally Omitted.]

     SECTION 1.16. Amendment to Section 4.15. Section 4.15 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.15. [Intentionally Omitted.]

     SECTION 1.17. Amendment to Section 4.17. Section 4.17 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.17. [Intentionally Omitted.]

     SECTION 1.18. Amendment to Section 4.18. Section 4.18 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.18. [Intentionally Omitted.]

     SECTION 1.19. Amendment to Section 4.19. Section 4.19 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 4.19. Suspension of Covenants.

     (a) In the event that at any time (i) the rating assigned to the Notes by each of S&P
and Moody’s is an Investment Grade Rating and (ii) no Default or Event of Default has
occurred and is continuing under this Indenture, then, beginning on that day and subject to
the provisions of paragraph (b) below, the Company and its Restricted Subsidiaries will no
longer be subject to Section 13.03(b)(iii) hereof (the “Suspended Covenant”); provided,
however, that all other provisions of this Indenture shall continue to be in full force and
effect.

     (b) Notwithstanding the foregoing, if the rating assigned by either Moody’s or S&P
should subsequently decline to below an Investment Grade Rating, respectively, the foregoing
covenant shall be reinstituted as of and from the date of such rating decline.

     SECTION 1.20. Amendment to Section 5.01. Section 5.01 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 5.01. [Intentionally Omitted.]

     SECTION 1.21. Amendment to Section 5.02. Section 5.02 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 5.02. [Intentionally Omitted.]

 

 

     SECTION 1.22. Amendment to Section 6.01. Section 6.01 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 6.01. Events of Default.

     An “Event of Default” occurs if:

     (a) the Company defaults in the payment when due of interest on, or Special Interest, if any,
with respect to, the Notes and such default continues for a period of 30 days;

     (b) the Company defaults in the payment when due of principal of or premium, if any, on the
Notes;

     (c) [Intentionally Omitted];

     (d) [Intentionally Omitted];

     (e) [Intentionally Omitted];

     (f) [Intentionally Omitted];

     (g) [Intentionally Omitted];

     (h) [Intentionally Omitted];

     (i) the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, when
taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of the
Bankruptcy Code:

     (i) commences a voluntary case,

     (ii) consents to the entry of an order for relief against it in an involuntary case,

     (iii) consents to the appointment of a Custodian of it or for all or substantially all
of its property,

     (iv) makes a general assignment for the benefit of its creditors, or

     (v) generally is not paying its debts as they become due;

     (j) [Intentionally Omitted]; or

     (k) [Intentionally Omitted].

     SECTION 1.23. Amendment to Section 6.03. Section 6.03 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 6.03. [Intentionally Omitted.]

     SECTION 1.24. Amendment to Section 6.08. Section 6.08 of the Indenture is hereby amended and
restated in its entirety to read as follows:

 

 

     Section 6.08. [Intentionally Omitted.]

     SECTION 1.25. Amendment to Section 8.03. Section 8.03 of the Indenture is hereby amended and
restated in its entirety to read as follows:

Section 8.03. Defeasance. The Company may defease the outstanding Notes at any time by
placing on deposit with a reputable servicing agent an amount equal to the outstanding
principal amount of all the outstanding Notes being defeased plus an amount sufficient to
cover the required interest payments and servicing fees with respect to such defeased notes,
all as shall be determined by the Company in its reasonable business judgment. Such
defeasance shall constitute a “Legal Defeasance” for all purposes of this Indenture.

     SECTION 1.26. Amendment to Section 8.04. Section 8.04 of the Indenture is hereby amended and
restated in its entirety to read as follows:

Section 8.04. Conditions to Defeasance. The Company shall have delivered to the Trustee an
Officer’s Certificate and an Opinion of Counsel, subject to customary assumptions and
exceptions, each stating that all applicable conditions precedent relating to the defeasance
have been complied with.

     SECTION 1.27. Amendment to Section 8.05. Section 8.05 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 8.05. [Intentionally Omitted.]

     SECTION 1.28. Amendment to Section 8.06. Section 8.06 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 8.06. [Intentionally Omitted.]

     SECTION 1.29. Amendment to Section 8.07. Section 8.07 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 8.07. [Intentionally Omitted.]

     SECTION 1.30. Amendment to Section 8.08. Section 8.08 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 8.08. [Intentionally Omitted.]

     SECTION 1.31. Amendment to Section 8.09. Section 8.09 of the Indenture is hereby amended and
restated in its entirety to read as follows:

     Section 8.09. [Intentionally Omitted.]

     SECTION 1.32. General Conforming Amendment. The Indenture shall hereby be deemed to be
amended to delete any and all references therein to any section or subsections deleted pursuant
hereto and to any defined terms in the Indenture that are used solely in those deleted sections or
subsections.

 

 

ARTICLE TWO

MISCELLANEOUS PROVISIONS

     SECTION 2.01. Instruments to be Read Together. This Supplemental Indenture is an indenture
supplemental to and in implementation of the Indenture, and said Indenture and this Supplemental
Indenture shall henceforth be read together.

     SECTION 2.02. Confirmation. The Indenture as amended and supplemented by this Supplemental
Indenture is in all respects confirmed and preserved.

     SECTION 2.03. Terms Defined. Capitalized terms used herein without definition shall have the
meanings assigned to them in the Indenture. For all purposes of the Indenture and this
Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise
requires, the words “herein”, “hereof” and “hereunder” and other words of similar import refer to
the Indenture and this Supplemental Indenture as a whole and not to any particular Article, Section
or subdivision.

     SECTION 2.04. Counterparts. This Supplemental Indenture may be signed in any number of
counterparts, delivered either in the original and electronically, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.

     SECTION 2.05. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.

     SECTION 2.06. Effectiveness. The provisions of this Supplemental Indenture will take effect
immediately upon execution thereof by the parties hereto and will become operative to amend the
Indenture as provided in Article One hereof on the Operative Date of this Supplemental Indenture.

     SECTION 2.07. Conflict with Trust Indenture Act. If any provision of this Supplemental
Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act of 1939, as
amended (the ''Trust Indenture Act’’), that is required under the Trust Indenture Act to be part of
and govern any provision of this Supplemental Indenture, the provision of the Trust Indenture Act
shall control. If any provision of this Supplemental Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the provision of the Trust
Indenture Act shall be deemed to apply to the Indenture as so modified or to be excluded by this
Supplemental Indenture, as the case may be.

     SECTION 2.08. Severability. In case any provision in this Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     SECTION 2.09. Benefits of Supplemental Indenture, etc. Nothing in this Supplemental
Indenture or the Notes, express or implied, shall give to any person, other than the parties hereto
and thereto and their successors hereunder and thereunder and the Holders of the Notes, any benefit
of any legal or equitable right, remedy or claim under the Indenture, this Supplemental Indenture
or the Notes.

     SECTION 2.10. Successors. All agreements of the Company in this Supplemental Indenture shall
bind its successors. All agreements of the Trustee in this Supplemental Indenture shall bind its
successors.

     SECTION 2.11. Trustee Not Responsible for Recitals. The recitals contained herein shall be
taken as the statements of the Company, and the Trustee assumes no responsibility for their
correctness.

 

 

The Trustee shall not be liable or responsible for the validity or sufficiency of this Supplemental
Indenture or the due authorization of this Supplemental Indenture by the Company.

     SECTION 2.12. Certain Duties and Responsibilities of the Trustee. In entering into this
Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the
Indenture relating to the conduct of, affecting the liability of or affording protection to the
Trustee, whether or not elsewhere herein so provided.

     SECTION 2.13. Governing Law. The laws of the State of New York shall govern this Supplemental
Indenture without regard to principles of conflicts of law.

[remainder of the page intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.

	 	 	 	 	 
	 	TESORO CORPORATION, as Issuer

 	 
	 	By:  	/s/ Gregory A. Wright
 	 
	 	 	Name:  	Gregory A. Wright 	 
	 	 	Title:  	Executive Vice President and Chief Financial
Officer 	 
	 

	 	 	 	 	 
	 	 	 	 	TESORO FAR EAST MARITIME COMPANY (f/k/a FAR EAST
MARITIME COMPANY), as Guarantor

	 	 	 	 	GOLD STAR
MARITIME COMPANY, as Guarantor

	 	 	 	 	KENAI PIPE
LINE COMPANY, as Guarantor

	 	 	 	 	SMILEY’S SUPER SERVICE, INC., as Guarantor

	 	 	 	 	TESORO ALASKA COMPANY, as Guarantor

	 	 	 	 	TESORO ALASKA PIPELINE COMPANY, as Guarantor

	 	 	 	 	TESORO AVIATION COMPANY, as Guarantor

	 	 	 	 	TESORO HIGH PLAINS PIPELINE COMPANY, as Guarantor

	 	 	 	 	TESORO MARINE SERVICES HOLDING COMPANY, as Guarantor

	 	 	 	 	TESORO MARINE SERVICES, LLC., as Guarantor

BY: Tesoro Marine Services Holding Company, as
sole Member

	 	 	 	 	TESORO MARITIME COMPANY, as Guarantor

	 	 	 	 	TESORO NORTHSTORE COMPANY, as Guarantor

	 	 	 	 	TESORO PETROLEUM COMPANIES, INC. as Guarantor

	 	 	 	 	TESORO REFINING AND MARKETING COMPANY, as Guarantor

	 	 	 	 	TESORO TECHNOLOGY COMPANY, as Guarantor

	 	 	 	 	TESORO TRADING COMPANY, as Guarantor

	 	 	 	 	TESORO VOSTOK COMPANY, as Guarantor

	 	 	 	 	TESORO WASATCH, LLC, as Guarantor

BY: Tesoro Corporation, as sole Member

	 	 	 	 	TESORO ENVIRONMENTAL RESOURCES COMPANY, as Guarantor

	 	 	 	 	VICTORY FINANCE COMPANY, as Guarantor

	 	 	 	 	 
	 	 	 
	 	By:  	                                        /s/ Gregory A. Wright
 	 
	 	 	Name:  	Gregory A. Wright 	 
	 	 	Title:  	Executive Vice President and Chief Financial
Officer 	 
	 

 

 

	 	 	 	 	 
	 	TESORO HAWAII CORPORATION, as Guarantor

 	 
	 	By:  	/s/ Gregory A. Wright
 	 
	 	 	Name:  	Gregory A. Wright 	 
	 	 	Title:  	Executive Vice President, Chief Financial
Officer and Treasurer 	 
	 
	 	DIGICOMP, INC., as Guarantor

TESORO GAS RESOURCES COMPANY, INC., as Guarantor

 	 
	 	By:  	/s/ Scott Spendlove
 	 
	 	 	Name:  	Scott Spendlove 	 
	 	 	Title:  	Vice President, Finance and Treasurer 	 
	 
	 	TESORO FINANCIAL SERVICES HOLDING
COMPANY, as Guarantor

 	 
	 	By:  	/s/ Scott Spendlove
 	 
	 	 	Name:  	Scott Spendlove 	 
	 	 	Title:  	Attorney-in-fact 	 
	 
	 	THE BANK OF NEW YORK, AS TRUSTEE

 	 
	 	By:  	/s/ John C. Stohlmann
 	 
	 	 	Name:  	John C. Stohlmann 	 
	 	 	Title:  	Vice Presidentexv4w2

 

Execution Version

Exhibit 4.2

Warrant-B

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE
WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

Ace*Comm Corporation

WARRANT

			
	Warrant No. B-[   ]
	 	Dated:   November 11, 2005

     Ace*Comm Corporation, a Maryland corporation (the “Company”), hereby certifies that, for value
received, [Name of Holder] or its registered assigns (the “Holder”), is entitled to purchase from
the Company up to a total of [ ] shares of common stock (the “Common Stock”) of the
Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an
exercise price equal to $2.50 per share (as adjusted from time to time as provided in Section
9, the “Exercise Price”) at any time and from time to time from and after the date hereof and
through and including the 180th day following the Effective Date, but not including the
Effective Date (the “Expiration Date”), and subject to the following terms and conditions. This
Warrant (this “Warrant ”) is one of a series of similar warrants issued pursuant to that certain
Securities Purchase Agreement, dated as of March 31, 2005 (as amended by that certain Amendment to
Securities Purchase Agreement, dated as of November 11, 2005), by and among the Company and the
Purchasers identified therein (the “Purchase Agreement”). All such Warrants are referred to
herein, collectively, as the “Warrants.”

     1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given to such terms in
the Purchase Agreement.

     2. Registration of Warrant. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.

 

 

     3. Registration of Transfers. The Company shall register the assignment and transfer
of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Transfer Agent or to the
Company at its address specified herein. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a “New
Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee
and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a
holder of a Warrant.

     4. Exercise and Duration of Warrants.

          (a) This Warrant shall be exercisable by the registered Holder at any time and from time to
time on or after the date hereof to and including the Expiration Date. At 6:30 P.M., New York City
time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value.

          (b) The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice,
in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed, and
(ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised, and the date such items are delivered to the Company (as determined in accordance
with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to
deliver the original Warrant in order to effect an exercise hereunder. The Holder shall have the
right upon execution and delivery of the Exercise Notice, to surrender the original Warrant and
cause the Company to issue a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares.

     5. Delivery of Warrant Shares.

          (a) Upon exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered
to or upon the written order of the Holder and in such name or names as the Holder may designate, a
certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends unless
a registration statement covering the resale of the Warrant Shares and naming the Holder as a
selling stockholder thereunder is not then effective and the Warrant Shares are not freely
transferable without volume restrictions pursuant to Rule 144 under the Securities Act. The
Holder, or any Person so designated by the Holder to receive Warrant Shares, shall be deemed to
have become holder of record of such Warrant Shares as of the Exercise Date. The Company shall,
upon request of the Holder, use its reasonable best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established clearing corporation
performing similar functions.

          (b) This Warrant is exercisable, either in its entirety or, from time to time, for a portion
of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial
exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

2

 

          (c) In addition to any other rights available to a Holder, if the Company fails to deliver to
the Holder a certificate representing Warrant Shares by the third Trading Day after the date on
which delivery of such certificate is required by this Warrant, and if after such third Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving
from the Company (a “Buy-In”), then the Company shall, within three Trading Days after the Holder’s
request and in the Company’s discretion, either (i) pay cash to the Holder in an amount equal to
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver
such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to the Holder a certificate or certificates representing such Common Stock
and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the
product of (A) such number of shares of Common Stock, times (B) the Closing Price on the date of
the event giving rise to the Company’s obligation to deliver such certificate.

          (d) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of law by the Holder
or any other Person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of Warrant Shares and
Warrants. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms
hereof.

     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable bond or indemnity, if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and procedures and pay such
other reasonable third-party costs as the Company may prescribe.

3

 

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as provided herein, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into account the adjustments
and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable
and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9.

          (a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clauses (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.

          (b) Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to all holders of Common Stock (i) evidences of its indebtedness, (ii) any
security (other than a distribution of Common Stock covered by the preceding paragraph), (iii)
rights or warrants to subscribe for or purchase any security, or (iv) any other asset (in each
case, “Distributed Property”), then in each such case the Exercise Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to receive such
distribution shall be adjusted (effective on such record date) to equal the product of such
Exercise Price times a fraction of which the denominator shall be the average of the Closing Prices
for the five Trading Days immediately prior to (but not including) such record date and of which
the numerator shall be such average less the then fair market value of the Distributed Property
distributed in respect of one outstanding share of Common Stock, as determined by the Company’s
independent certified public accountants that regularly examine the financial statements of the
Company (an “Appraiser”). In such event, the Holder, after receipt of the determination by the
Appraiser, shall have the right to select an additional appraiser (which shall be a nationally
recognized accounting firm) at the Holder’s sole expense to determine such fair market value, in
which case such fair market value shall be deemed to equal the average of the values determined by
each of the Appraiser and such appraiser. As an alternative to the foregoing adjustment to the
Exercise Price, at the request of the Holder delivered before the 90th day after such record date,
upon exercise by the Holder of this Warrant, the Company will

4

 

deliver to such Holder, within five Trading Days after such request (or, if later, on the
effective date of such distribution), the Distributed Property that such Holder would have been
entitled to receive in respect of the Warrant Shares for which this Warrant is exercised. If such
Distributed Property is not delivered to a Holder pursuant to the preceding sentence, then upon
expiration of or any exercise of the Warrant that occurs after such record date, such Holder shall
remain entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise
(if applicable), such Distributed Property.

          (c) Fundamental Transactions. If, at any time while this Warrant is outstanding, (i)
the Company effects any merger or consolidation of the Company with or into another Person, (ii)
the Company effects any sale of all or substantially all of its assets in one or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange
their shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a)
above) (in any such case, a “Fundamental Transaction”), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash
or property as it would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the
number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). The aggregate Exercise Price for this Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. In the event of a Fundamental Transaction, the
Company or the successor or purchasing Person, as the case may be, shall execute with the Holder a
written agreement providing that:

     (x) this Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this section 9(c),

     (y) in the case of any such successor or purchasing Person, upon such consolidation,
merger, statutory exchange, combination, sale or conveyance such successor or purchasing
Person shall be jointly and severally liable with the Company for the performance of all of
the Company’s obligations under this Warrant and the Purchase Agreement, and

     (z) if registration or qualification is required under the Exchange Act or applicable
state law for the public resale by the Holder of shares of stock and other securities so
issuable upon exercise of this Warrant, all rights applicable to registration of
the Common Stock upon exercise of this Warrant shall apply to the Alternate Consideration.

5

 

     If, in the case of any Fundamental Transaction, the Alternate Consideration includes shares of
stock, other securities, other property or assets of a Person other than the Company or any such
successor or purchasing Person, as the case may be, in such Fundamental Transaction, then such
written agreement shall also be executed by such other Person and shall contain such additional
provisions to protect the interests of the Holder as the Board of Directors of the Company shall
reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor
to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new
Warrant consistent with the foregoing provisions and evidencing the Holder’s right to purchase the
Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this paragraph (c) and insuring
that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction. If any Fundamental Transaction constitutes or
results in a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act with respect
to the Company in which the consideration issued consists principally of cash or stock in a
non-public company, then at the request of the Holder delivered before the 90th day after such
Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the
Warrant from the Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later, on the effective date of the Fundamental Transaction), equal to the
Black-Scholes value of the remaining unexercised portion of this Warrant on the date of such
request.

          (d) Subsequent Equity Sales.

     (i) If, at any time while this Warrant is outstanding, the Company or any Subsidiary
issues additional shares of Common Stock or rights, Warrants, options or other securities or
debt convertible, exercisable or exchangeable for shares of Common Stock or otherwise
entitling any Person to acquire shares of Common Stock (collectively, “Common Stock
Equivalents”) at an effective net price to the Company per share of Common Stock (the
“Effective Price”) less than the Exercise Price (as adjusted hereunder to such date), then
the Exercise Price shall be reduced to equal the product of (A) the Exercise Price in effect
immediately prior to such issuance of shares of Common Stock or Common Stock Equivalents
times (B) a fraction, the numerator of which is the sum of (1) the number of shares of
Common Stock outstanding immediately prior to such issuance, plus (2) the number of shares
of Common Stock which the aggregate Effective Price of the shares of Common Stock issued (or
deemed to be issued) would purchase at the Exercise Price, and the denominator of which is
the aggregate number of shares of Common Stock outstanding or deemed to be outstanding
immediately after such issuance. For purposes of this paragraph, in connection with any
issuance of any Common Stock Equivalents, (A) the maximum number of shares of Common Stock
potentially issuable at any time upon conversion, exercise or exchange of such Common Stock
Equivalents (the “Deemed Number”) shall be deemed to be outstanding upon issuance of such
Common Stock Equivalents, (B) the Effective Price applicable to such Common Stock shall
equal the minimum dollar value of consideration payable to the

6

 

Company to purchase such Common Stock Equivalents and to convert, exercise or exchange
them into Common Stock (net of any discounts, fees, commissions and other expenses), divided
by the Deemed Number, and (C) no further adjustment shall be made to the Exercise Price upon
the actual issuance of Common Stock upon conversion, exercise or exchange of such Common
Stock Equivalents. The Effective Price of Common Stock or Common Stock Equivalents issued in
any transaction in which more than one type of securities are issued shall give effect to
the allocation by the Company of the aggregate amount paid for such securities among the
different securities issued in such transaction.

     (ii) If, at any time while this Warrant is outstanding, the Company or any Subsidiary
issues Common Stock Equivalents with an Effective Price or a number of underlying shares
that floats or resets or otherwise varies or is subject to adjustment based (directly or
indirectly) on market prices of the Common Stock (a “Floating Price Security”), then for
purposes of applying the preceding paragraph in connection with any subsequent exercise, the
Effective Price will be determined separately on each Exercise Date and will be deemed to
equal the lowest Effective Price at which any holder of such Floating Price Security is
entitled to acquire Common Stock on such Exercise Date (regardless of whether any such
holder actually acquires any shares on such date).

     (iii) Notwithstanding the foregoing, no adjustment will be made under this paragraph
(d) in respect of any Excluded Stock.

          (e) Number of Warrant Shares. Simultaneously with any adjustments to the Exercise
Price pursuant to paragraphs (a) or (b) of this Section, the number of Warrant Shares that may be
purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.

          (f) Calculations. All calculations under this Section 9 shall be made to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an issue or sale of Common
Stock.

          (g) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will promptly compute such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s Transfer Agent.

7

 

          (h) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes
the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the material terms and conditions of such
transaction, at least 20 calendar days prior to the applicable record or effective date on which a
Person would need to hold Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the corporate action
required to be described in such notice.

     10. Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately
available funds.

     11. Limitation on Exercise. (a) Notwithstanding anything to the contrary contained
herein, the number of shares of Common Stock that may be acquired by the Holder upon any exercise
of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure
that, following such exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed 4.999% (the “Threshold Percentage”) or 9.999% (the “Maximum
Percentage”) of the total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. Each delivery of an Exercise Notice hereunder
will constitute a representation by the Holder that it has evaluated the limitations set forth in
this paragraph and determined that issuance of the full number of Warrant Shares requested in such
Exercise Notice is permitted under this paragraph. The Company’s obligation to issue shares of
Common Stock in excess of the limitations referred to in this Section shall be suspended (and shall
not terminate or expire notwithstanding any contrary provisions hereof) until such time, if any, as
such shares of Common Stock may be issued in compliance with such limitation. By written notice to
the Company, the Holder shall have the right (x) at any time and from time to time to reduce its
Maximum Percentage immediately upon notice to the Company in the event and only to the extent that
Section 16 of the Exchange Act or the rules promulgated thereunder (or any successor statute or
rules) is changed to reduce the beneficial ownership percentage threshold thereunder to a
percentage less than 9.999% and (y) at any time and from time to time, to waive the provisions of
this Section insofar as they relate to the Threshold Percentage or to increase or decrease its
Threshold Percentage (but not in excess of the Maximum Percentage) unless the Holder shall have, by
written instrument delivered to the Company, irrevocably waived its rights to so increase or
decrease its Threshold Percentage, but (i) any such waiver, increase or decrease will not be
effective until the 61st day after such notice is delivered to the Company, and (ii) any such
waiver or increase or decrease will apply only to the Holder and not to any other holder of Warrants.

8

 

          (b) Notwithstanding anything to the contrary contained herein, the maximum number of shares of
Common Stock that the Company may issue pursuant to the Transaction Documents at an effective
purchase price less than the Closing Price on the Trading Day immediately preceding the Closing
Date equals 19.99% of the outstanding shares of Common Stock immediately preceding Closing Date
(the “Issuable Maximum”), unless the Company obtains shareholder approval in accordance with the
rules and regulations of such Trading Market. If, at the time any Holder requests an exercise of
any of the Warrants, the Actual Minimum (excluding any shares issued or issuable at an effective
purchase price in excess of the Closing Price on the Trading Day immediately preceding the Closing
Date) exceeds the Issuable Maximum (and if the Company has not previously obtained the required
shareholder approval), then the Company shall issue to the Holder requesting such exercise a number
of shares of Common Stock not exceeding such Holder’s pro-rata portion of the Issuable Maximum
(based on such Holder’s share (vis-à-vis other Holders) of the aggregate purchase price paid under
the Purchase Agreement and taking into account any Warrants Shares previously issued to such
Holder). For the purposes hereof, “Actual Minimum” shall mean, as of any date, the maximum
aggregate number of shares of Common Stock then issued or potentially issuable in the future
pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in
full of all Warrants, without giving effect to any limits on the number of shares of Common Stock
that may be owned by a Holder at any one time.

     12. Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant
Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant,
the number of Warrant Shares to be issued will be rounded up to the nearest whole share or right to
purchase the nearest whole share, as the case may be.

     13. Notices. Any and all notices or other communications or deliveries hereunder
(including without limitation any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New
York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent by a nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices or communications shall be as set forth in
the Purchase Agreement.

     14. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into
which the Company or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or any corporation to
which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor
warrant agent under this Warrant without any further act. Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail,
postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

9

 

     15. Miscellaneous.

          (a) Subject to the restrictions on transfer set forth on the first page hereof, this Warrant
may be assigned by the Holder. This Warrant may not be assigned by the Company except to a
successor in the event of a Fundamental Transaction. This Warrant shall be binding on and inure to
the benefit of the parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.
This Warrant may be amended only in writing signed by the Company and the Holder and their
successors and assigns.

          (b) The Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor
on such exercise, (ii) will take all such action as may be reasonably necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on
the exercise of this Warrant, and (iii) will not close its shareholder books or records in any
manner which interferes with the timely exercise of this Warrant.

          (c) Governing Law; Venue; Waiver Of Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this Warrant shall be
governed by and construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan.
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of this Warrant ), and hereby irrevocably waives,
and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.
Each party hereto hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof via registered or

10

 

certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or
any of the Transaction Documents or the transactions contemplated hereby or thereby. If either
party shall commence an action or proceeding to enforce any provisions of this Warrant or any
Transaction Document, then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys fees and other reasonable costs and expenses incurred
with the investigation, preparation and prosecution of such action or proceeding.

          (d) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

          (e) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

11

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 
	 	Ace*Comm Corporation

 	 
	 	By:  	 	 
	 	 	Steven R. Delmar 	 
	 	 	Senior Vice President and

Chief Financial Officer 	 

12

 

	 	 	 	 	 

FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of Common Stock under the
foregoing Warrant )

To: Ace*Comm Corporation

The undersigned is the Holder of Warrant No. B-      (the “Warrant ”) issued by Ace*Comm
Corporation, a Maryland corporation (the “Company”). Capitalized terms used herein and not
otherwise defined have the respective meanings set forth in the Warrant.

	1.	 	The Warrant is currently exercisable to purchase a total of                      Warrant Shares.
	 
	2.	 	The undersigned Holder hereby exercises its right to purchase                      Warrant
Shares pursuant to the Warrant.
	 
	3.	 	The Holder intends that payment of the Exercise Price shall be made in immediately available
funds, and shall pay the sum of $                     to the Company in accordance with the terms of
the Warrant.
	 
	4.	 	Pursuant to this exercise, the Company shall deliver to the holder                      Warrant
Shares.
	 
	5.	 	Following this exercise, the Warrant shall be exercisable to purchase a total of                      Warrant Shares.

	 	 	 
	Dated:                     ,     

	 	Name of Holder:
	 
	 	 
	 

	 	(Print)                                                            
	 
	 	 
	 

	 	By:                                                                 
	 

	 	Name:                                                            
	 

	 	Title:                                                               
	 
	 	 
	 

	 	(Signature must conform in all respects to name of holder as
specified on the face of the Warrant )

 

 

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of the Warrant ]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                         the right represented by the within Warrant to purchase                      shares
of Common Stock of Ace*Comm Corporation to which the within Warrant relates and appoints
                     attorney to transfer said right on the books of Ace*Comm Corporation with full
power of substitution in the premises.

	 	 	 
	Dated:                     ,     
	 	 
	 
	 	 
	 

	 	 
	 

	 	(Signature must conform in all respects to name of
holder as specified on the face of the Warrant )
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Address of Transferee
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	In the presence of:

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