EXHIBIT 4.5
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON
THEIR EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE TRANSFERRED UNLESS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT, A "NO ACTION"
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH
TRANSFER, A TRANSFER MEETING THE
REQUIREMENTS OF RULE 144 OF THE SECURITIES AND
EXCHANGE COMMISSION, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
NETWORK INSTALLATION CORP.
WARRANT
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WARRANT NO.
September 102
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Dated:
September 22, 2005
Network
Installation Corporation, a corporation organized under the laws
of
the State of Nevada (the "Company"), hereby
certifies that, for value received
from Dutchess Private Equities Fund,
II, LP ("Holder"), is entitled, subject to
the terms set forth below, to purchase from
the Company up to a total of 750,000
shares of Common Stock, $.001 par value per
share (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 $.86 per share. The Warrant may be
exercised anytime after its issuance. The
Warrant may be exercised on a cashless
basis pursuant to Section 9. This Warrant will expire on the fifth (5th)
anniversary of its issuance (the "Expiration Date"), and is subject to the
following terms and conditions:
1. Registration
of Warrant. The Company shall register this
Warrant,
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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, and the Company
shall not be affected by
notice to the contrary.
2. Registration
of Transfers and Exchanges.
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(a)
The
Company shall register the transfer of any portion of
this
Warrant in the Warrant Register, upon
surrender of this Warrant to the Transfer
Agent or to the Company at the office
specified in or pursuant to Section 3(b).
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 of such transferee of all of the
rights and obligations of a holder
of a Warrant.
(b) This
Warrant is exchangeable, upon the surrender hereof by the
Holder to the office of the Company
specified in or pursuant to Section 3(b) for
one or more New Warrants, evidencing
in the aggregate the right to purchase the
number of Warrant Shares which may then be purchased
hereunder. Any such
New
Warrant will be dated the date of such exchange.
3. Duration
and Exercise of Warrants.
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(a) This
Warrant shall be exercisable by the
registered Holder on any
business day before 5:00 P.M., New York
City time, at any time and from time to
time on or after the date hereof to and
including the Expiration Date. At 5:00
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.
Prior to the
Expiration Date, the Company may not call or otherwise redeem this
Warrant
without the prior written consent of the Holder.
(b) Subject to
Sections 2(b), 6 and 10, upon surrender of this Warrant,
with the Form of Election to Purchase
attached hereto duly completed and signed,
to the Company at its address for notice set forth in Section 12
and upon
payment of the Exercise Price multiplied by the
number of Warrant Shares that
the Holder intends to purchase
hereunder, in the manner provided hereunder, all
as specified by the Holder in the Form of Election to
Purchase, the Company
shall promptly (but in no event later than 3 business
days after the Date of
Exercise (as defined herein)) 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
except (i) either in the event that a
registration statement covering the resale of
the Warrant Shares and naming the
Holder as a selling stockholder
thereunder is not then effective or the Warrant
Shares are not freely transferable
without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act
of 1933, as amended (the "Securities
Act"), or (ii) if this Warrant shall have been issued
pursuant to a written
agreement between the original Holder and the Company, as required by
such
agreement. 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
Date of Exercise (as defined in this subsection) of this Warrant.
A "Date of Exercise" means the date on
which the Company shall have received (i)
this Warrant (or any New Warrant, as
applicable), with the Form of Election to
Purchase attached hereto (or attached to such New Warrant) appropriately
completed and duly signed, and (ii) payment
of the Exercise Price for the number
of Warrant Shares so indicated by the holder hereof to be purchased.
(c) This
Warrant shall be
exercisable, either in its entirety or, from
time to time, for a portion of the number
of Warrant Shares. If
less than all
of the Warrant Shares which may be
purchased under this Warrant are exercised at
any time, 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
for which no exercise has been evidenced by this Warrant.
In the event the Common Stock representing the Warrant Shares is not
delivered per the written instructions of the Purchaser, within 3 (three)
business days after the Notice of Election and Warrant is received by the
Company (the "Delivery Date"), then in such event the Company shall pay
to
Holder one percent (1%) in cash, of the
dollar value of the Warrant Shares to be
issued per each day after the Delivery Date that the Warrant
Shares are not
delivered.
The Company acknowledges that its
failure to deliver the Warrant Shares by
the Delivery Date will cause the Holder to
suffer damages in an amount that will
be difficult to ascertain. Accordingly, the parties agree that it is
appropriate to include in this Warrant a
provision for liquidated damages. The
parties acknowledge and agree that the
liquidated damages provision set forth in
this section represents the parties'
good faith effort to quantify such damages
and, as such, agree that the form and amount of such
liquidated damages are
reasonable and will not constitute a
penalty. The payment
of liquidated damages
shall not relieve the Company from its
obligations to deliver the Common Stock
pursuant to the terms of this Warrant.
To the extent that the failure of the Company to
issue the Common Stock
pursuant to this Section is due to the unavailability of authorized but
unissued shares of Common Stock, the provisions of this Section 3
shall not
apply but instead the provisions of Section 7 shall apply.
The Company shall make any payments incurred under this Section 3 in
immediately available funds within ten (10) business days from the date of
issuance of the applicable Warrant Shares.
Nothing herein shall
limit Holder's
right to pursue actual damages or cancel the Notice of Election for the
Company's failure to issue and deliver Common Stock to the
Holder within ten
(10) business days following the Delivery Date.
4. Registration
Rights. During the term of this Warrant, the
Company
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may not file any registration statement with the Securities and Exchange
Commission (unless with the consent of
Holder) at any time when there is not an
effective registration statement covering the resale of
the Warrant Shares and
naming the Holder as a selling stockholder
thereunder (unless the Warrant Shares
are otherwise freely transferable without volume
restrictions pursuant to Rule
144(k) promulgated under the Act), unless the Company
provides the Holder with
not less than twenty (20) calendar days notice of its
intention to file such
registration statement and provides the Holder
the option to include any or all
of the applicable Warrant Shares therein.
The registration rights granted to
the Holder pursuant to this Section shall continue until
all of the Holder's
Warrant Shares have been sold in accordance with an effective
registration
statement or upon the Expiration Date. The Company will pay all
registration
expenses in connection therewith.
5. Payment
of Taxes. The Company will pay all documentary stamp
taxes
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attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; 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. 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.
6. Replacement
of Warrant.
If this Warrant is
mutilated, lost, stolen
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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 indemnity, if
requested, satisfactory to it. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations
and
procedures and pay such other reasonable charges
as the Company may prescribe.
7. Reservation
of Warrant Shares. The Company covenants that it
will
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at all times reserve and keep available
out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of enabling it to
issue
Warrant Shares upon exercise of this Warrant as
herein provided, 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 actual contingent
purchase rights of persons other than the Holder (taking into account
the
adjustments and restrictions of Section 8). The Company covenants that all
Warrant Shares that shall be 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.
In the event the Company fails to have
sufficient authorized but unissued Common
Stock to allow for the issuance of Warrant Shares upon the
exercise of the
Warrant the Company shall be liable for
liquidated damages in the amount of 2%
interest per thirty calendar day period on
the value of the Warrant Shares based
on the closing bid price of the Company's
Common Stock on the business day prior
to the Company's receipt of its
Election to Purchase.
The damages shall accrue
until the Common Stock is issued.
The Company
acknowledges that its failure to reserve a sufficient number of
Warrant Shares as required in this Section 7, will
cause the Holder to suffer
damages in an amount that will be difficult to ascertain.
Accordingly, the
parties agree that it is appropriate to
include in this Warrant a provision for
liquidated damages. The parties acknowledge and agree that the liquidated
damages provision set forth in
