THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO THE DISTRIBUTION THEREOF, AND SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT OR REGULATION.
TRANSFER OF THIS WARRANT IS RESTRICTED
Warrant to Purchase ______ Shares
WARRANT OF
INCOMNET, INC. December 9, 1996
Void After December 9, 1999
This certifies that, for value received ____________________ ("Holder"), or
registered assigns, is entitled, subject to the terms set forth below, at any
time until December 9, 1999, to purchase from Incomnet, Inc. (the "Company"), a
California corporation, _____ shares of Common Stock of the Company, at a price
per share of $3.75, (the "Purchase Price"), subject to adjustment.
1. EXERCISE
(a) The Warrant may be exercised in whole or in part, at any time or from time
to time until December 9, 1999 upon surrender to the Company at its principal
office, or at such other office or agency as the Company may designate, together
with the form of subscription attached hereto, duly executed by the holder and
accompanied by payment in cash or check, in lawful money of the United States in
an amount equal to the product of the Purchase Price and the number of shares to
be acquired on such exercise. Upon any partial exercise, the Company shall
promptly issue and deliver to the holder hereof a new Warrant or Warrants of
like tenor and dated the date hereof, in the name of the such holder and
providing for the right to purchase the number of shares with respect to which
this Warrant has not been exercised.
(b) Upon the exercise of this Warrant, in whole or in part, the holder shall be
entitled to receive a certificate or certificates for the number of fully paid
and nonassessable shares of the Common Stock of the Company purchasable upon
such exercise. If a fraction of a share would be issuable on any exercise of
this Warrant, in lieu of the issuance of such fractional share, the Company will
pay the cash value of that fractional share, as determined in good faith by its
Board of Directors.
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(c) The Company will at all time reserve and keep available, solely for issuance
on exercise of the Warrant, all shares of Common Stock issuable on such
exercise.
(d) The Company will pay all taxes and other governmental charges that may be
imposed in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant. The Company shall not be required, however, to pay any
tax or other charge imposed in connection with any transfer involved in the
issue of any certificate for shares of Common Stock in any name other than that
of the registered holder of the Warrant surrendered in connection with the
purchase of such shares, and in such case the Company shall not be required to
issue or deliver any stock certificate until such tax or other charge has been
paid or it has been established to the Company's satisfaction that no tax or
other charge is due.
2. RIGHTS OF HOLDERS
No holder of the Warrant, by virtue of the ownership of this Warrant, shall be
considered a shareholder of the Company for any purpose, nor shall anything in
this Warrant be construed to confer on any holder of this Warrant any rights of
a shareholder of the Company, including, without limitation, any right to vote,
give or withhold consent to any corporation action, receive notice of meetings
of shareholders or receive dividends.
3. ADJUSTMENTS IN THE PURCHASE PRICE AND NUMBER OF SHARES
(a) In case the outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares of Common Stock or dividend in stock
shall be paid on the Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend, be proportionately reduced and, conversely, in
case the outstanding shares of Common Stock shall be combined into a small
number of shares of Common Stock, the Purchase Price in effect immediately prior
to such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased.
(b) No adjustment of the Purchase Price shall be made if the amount of such
adjustment shall be less than five cents per share, but in such case any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time of and together with the next subsequent
adjustment of the Purchase Price which, together with any adjustment so carried
forward, shall amount to five cents per share or more.
(c) When any adjustment is required to be made in the Purchase Price, the number
of shares of Common Stock purchasable upon exercise of the Warrant shall be
changed to the number determined by dividing (i) an amount equal to the number
of shares issuable pursuant to exercise of the Warrant immediately prior to such
adjustment, multiplied by the Purchase Price in effect immediately prior to such
adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
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(d) In the event of the merger or consolidation of the Company where the Company
is not the surviving corporation or becomes a wholly-owned subsidiary, the
Company will have the right to call and cancel the Warrant upon 30 days prior
written notice to the Holder. The Holder will have the right to exercise the
Warrant during such period. In case of any other change in the Common Stock of
the Company through merger, consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure of the Company or in
the case of a sale of all or substantially all of the property of the Company,
appropriate adjustment shall be made so that the holder of the Warrant shall
have the right thereafter to receive upon exercise of the Warrant the kind and
amount of shares of stock or other securities or property to which he would
have been entitled if, immediately prior to such merger, consolidation,
reclassification, reorganization, recapitalization, or other change in the
capital structure of the Company or in the case of a sale of all or
substantially all of the property of the Company, he had held the number of
shares of Common Stock which were then purchasable upon the exercise of this
Warrant. In any such case, appropriate adjustment shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the holder of this Warrant, to the end that the
provisions set forth herein (including provisions with respect to adjustments of
the Purchase Price) shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the exercise of this Warrant.
(e) When any adjustment is required to be made in the Purchase Price, the
Company shall forthwith determine the new Purchase Price and (i) prepare and
retain on file a statement describing in reasonable detail the method used in
arriving at the new Purchase Price; and (ii) cause a copy of such statement to
be mailed to the registered owner or owners of the Warrants, as of the date
within ten (10) days after the date when the circumstances giving rise to the
adjustment occurred.
4. TRANSFER AND EXCHANGE
(a) This Warrant and all rights hereunder may be transferred, subject to
compliance with the legend set forth on page one of this Warrant, in whole or in
part, by surrender of this Warrant properly endorsed to the Company at its
principal office, or at such other office or agency as the Company may
designate, and upon payment of any necessary transfer taxes. Upon any partial
transfer, the Company will issue and deliver to the holder hereof a new Warrant
and Warrants with respect to the shares of Common Stock not so transferred.
(b) Until this Warrant is transferred on the books of the Company, the Company
may treat the registered holder of this Warrant as the absolute owner for all
purposes, notwithstanding any notice to the contrary.
(c) This Warrant is exchangeable at such office or agency for Warrants for the
same aggregate number of shares of Common Stock, each new Warrant to represent
the right to purchase such number of shares as the holder hereof shall designate
at the time of such exchange.
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5. NOTICES
(a) All notices and other communications from the Company to the holder of this
Warrant shall be mailed by first class registered or certified mail, postage
prepaid, to the address furnished to the Company in writing by the last holder
of this Warrant who shall have furnished an address to the Company in writing.
6. HEADINGS
The headings in this Warrant are for purposes of convenience in reference only,
and shall not be deemed to constitute a part hereof.
7. GOVERNING LAW
This Warrant shall be governed by, and construed and enforced in accordance
with, the laws of the State of California applicable to contracts made and to be
performed wholly within that state.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
authorized officer as of the date first set forth above.
INCOMNET, INC.
By: By:
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Name: Melvyn Reznick Name: Stephen A. Caswell
Title: Chairman Title: Secretary
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SUBSCRIPTION FORM
TO: INCOMNET INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by said Warrant for, and to
purchase under said Warrant, _________________ shares of Common Stock of
Incomnet, Inc., and herewith make payment therefor, all at the price and on the
terms and conditions specified in the within Warrant.
DATED: By:
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