THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
July ___, 1996
WARRANT TO PURCHASE SHARES OF COMMON
STOCK OF CHEUNG LABORATORIES, INC.
This certifies that _____________ (the "Holder"), for a value received,
is entitled, subject to the adjustment and to the other terms set forth below,
to purchase from Cheung Laboratories, Inc., a Maryland corporation (the
"Company), at the Stock Purchase Price (as defined below) that number of fully
paid and nonassessable shares of the Company's $0.01 par value Common Stock (the
"Stock") as equals $________________ divided by the Stock Purchase Price, which
shall be the common stock equivalent price of the private placement to be sold
by the Company in the Fall of 1996 in an aggregate offering of not less than
$8,000,000 (anticipated to be at the price of $4.00 to $5.00 per share of common
stock equivalent and hereinafter referred to as the "Private Offering"). This
Warrant shall be exercisable at any time on and after six months from the date
of the next public stock offering ("Next Public Offering") of the Company (the
"Commencement Date") but not later than 5:00 P.M. (New York Time) on the
Expiration Date (as defined below), upon surrender to the Company at its
principle office at 10220-I Old Columbia Road, Columbia, Maryland 21046-1705,
Attention: Dr. Augustine Cheung, Chairman of the Board of Directors and Chief
Executive Officer (or at such other location as the Company may advise Holder in
writing) of this Warrant properly endorsed with the form of Subscription
Agreement attached hereto duly filled in and signed and upon payment in cash or
cashier's check of the aggregate Stock Purchase Price for the number of shares
for which this Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and, in some cases, the number of
shares purchasable hereunder are subject to adjustment as provided in Section 3
of this Warrant. This Warrant and all rights hereunder, to the extent not
exercised in the manner set forth herein shall terminate and become null and
void on the Expiration Date. "Expiration Date" means 5:00 P.M. (New York Time)
on the fifth anniversary of the
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Commencement Date. In the event that the Holder does not exercise this Warrant
pursuant to the terms of this Warrant, then this Warrant shall expire, be
cancelled, and be null and void. This Warrant is issued pursuant to the
subscription agreement dated the same date as this Warrant and executed by the
Holder, for the Purchase of a secured convertible promissory note in the
principal amount of $___________.
This Warrant is subject to the Following terms and conditions:
1. Exercise: Issuance of Certificates; Payment for Shares; Conversion Right.
1.1 Duration of Exercise of Warrant. This Warrant is exercisable at the
option of the Holder at any time or from time to time but not earlier than on
the Commencement Date or later than 5:00 P.M. (New York Time) on the Expiration
Date for all or a portion of the shares of Stock which may be purchased
hereunder. The Company agrees that the shares of Stock purchased under this
Warrant shall be and are deemed to be issued to Holder as the record owner of
such shares at the close of business on the date on which this Warrant shall
have been surrendered and payment made for such shares. Subject to the
provisions of Section 2, certificates for the shares of Stock so purchased,
together with any other securities or property to which Holder is entitled upon
such exercise, shall be delivered to Holder by the Company or its transfer agent
at the Company's expense within a reasonable time after the rights represented
by this Warrant have been exercised. Each stock certificate so delivered shall
be in such denominations of Stock as may be requested by Holder and shall be
registered in the name of Holder or such other name as shall be designated by
Holder. If, upon exercise of this Warrant, fewer than all of the shares of Stock
evidenced by this Warrant are purchased prior to the Expiration Date of this
Warrant, one or more new warrants substantially in the form of, and on the terms
in, this Warrant will be issued for the remaining number of shares of Stock not
purchased upon exercise of this Warrant.
2. Shares to Be Fully Paid: Reservation of Shares. The Company covenants and
agrees that all shares of Stock which may be issued upon the exercise of this
Warrant (the "Warrant Shares") shall, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable and free from all preemptive rights of any
stockholder and free of all taxes, liens, and charges with respect to the
issuance thereof. The Company believes it has sufficient shares both at the date
of this Warrant and following the Private Offering to provide for the exercise
of this Warrant, but shall take such action as may be required following the
Private Offering and the redemption of Stock for Mr. Gao to reserve and keep
available a sufficient number of shares of its authorized but unissued Stock for
such exercise. The Company will take all such reasonable actions as may be
necessary to assure that such shares of Stock may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
any domestic securities exchange or automated quotation system upon which the
Stock may be listed.
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3. Adjustment of Stock Purchase Price and Number of Shares. The Stock Purchase
Price and, in some cases, the number of shares purchasable upon the exercise of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 3.
3.1 Split or Combination of Stock and Stock Dividend: In case the
Company shall at any time subdivide its outstanding shares of Stock into a
greater number of shares or declare a dividend upon its Stock payable solely in
shares of Stock, the Stock Purchase Price in effect immediately prior to such
subdivision or declaration shall be proportionally reduced, and the number of
shares issuable upon exercise of the Warrant shall be proportionately increased.
Conversely, in case the outstanding shares of Stock of the Company shall be
combined into a smaller number of shares (such as a reverse stock split, but not
to include the anticipated redemption of 20,000,000 shares of stock from Mr. Gao
pursuant to a Redemption Agreement now in effect with Mr. Gao) the Stock
Purchase Price in effect immediately prior to such combination shall be
proportionately increased, and the number of shares issuable upon exercise of
the Warrant shall be proportionately reduced.
3.2 Dilutive Issuances. If prior to completion of the Company's Next
Public Offering, the Company shall sell or issue at any time after the date of
this Warrant and prior to its termination shares of Stock (other than Excluded
Stock, as defined in Section 3.2.5) at a consideration per share less than the
Stock Exercise Price in effect immediately prior to the time of such issue or
sale, then, upon such sale or issuance, the Stock Purchase Price shall be
reduced to the lower of the prices (calculated to the nearest cent) determined
as follows: by dividing (i) the sum of (A) the total number of shares of Stock
Outstanding (as defined in Section 3.2.1) below and subject to adjustment in the
manner set forth in Section 3.1) immediately prior to such issuance or sale
multiplied by the then-existing Stock Purchase Price, plus (B) the aggregate of
the amount of all consideration, if any, received by the Company upon such
issuance or sale, by (ii) the total number of shares of Stock Outstanding
immediately after such issuance or sale.
3.2.1 Definitions. For purposes of this Section 3.2, the
following definitions shall apply:
(a) "Convertible Securities" shall mean any
indebtedness or equity securities convertible into or exchangeable for Stock.
(b) "Options" shall mean any rights, warrants or
options to subscribe for or purchase Stock or Convertible Securities.
(c) "Stock Outstanding: shall mean the aggregate
of all Stock of the Company outstanding and all Stock issuable upon exercise of
all outstanding Options and conversion of all outstanding Convertible
Securities.
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(d) "Market Price" shall mean: (i) if there is
a ready public market of registered stock, the Market Price shall be the "Stock
Price" (as defined in this Section 3.2.1) obtained by taking the average over a
period of 30 days consecutive trading days ending on the second trading day
prior to the date of determination; and (ii) if there is no ready public market,
Market price shall be the highest of the last bona fide sale made by the Company
and the fair market value of the Stock as determined by the Board of Directors
in its good faith judgment.
(e) "Stock Price" shall mean (i) the mean, on
each such trading day, between the high and low sale price of a share of Stock,
or if no such sale takes place on any such trading day, the mean of the highest
closing bid and lowest closing asked prices therefor on any such trading day, in
each case as officially reported on all national securities exchanges on which
the Stock is then listed or admitted to trading, or (ii) if the Stock is not
then listed or admitted to trading on any national securities exchange, the
closing price of the Stock on such date, or (iii) if no closing price is
available on any such trading date, the mean between the highest closing bid and
the lowest closing asked prices thereof on any such trading date, in the
over-the-counter market as reported by The National Association of Securities
Dealers Automated Quotation System, or (iv) if the Stock is not then quoted in
such system, the mean between the highest closing bid and lowest closing asked
prices reported by market makers and dealers for the Stock listed as such with
the National Quotation Bureau, Incorporated, or any similar successor
organization, or (v) it there is no ready public market, then the Stock Price
shall be the Market Price.
3.2.2 For the purposes of this Section 3.2, the following
provisions shall also be applicable:
3.2.2.1 Cash Consideration. In the case of the
issuance or sale of additional Stock for cash, the consideration received by the
Company therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if such shares are offered by the Company for
subscription, the subscription price, or, if such shares are sold to
underwriters or dealers for public offering without a subscription offering, the
public offering price), without deducting therefrom any compensation or discount
paid or allowed to underwriters or dealers or others performing similar services
or for any expenses incurred in connection therewith.
3.2.2.2 Non-Cash Consideration. In case of the
issuance (other than upon conversion or exchange of Convertible Securities) or
sale of additional Stock, Options or Convertible Securities for a consideration
other than cash or a consideration a part of which shall be other than cash, the
fair market value of such consideration as determined by the Board of Directors
of the Company in the good faith exercise of its business judgment, irrespective
of the accounting treatment thereof, shall be deemed to be the value, for
purposes of this Section 3, of the consideration other than cash received by the
Company for such securities.
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3.2.2.3 Options and Convertible Securities. In case
the Company shall in any manner issue or grant any Options or any Convertible
Securities, the total maximum number of shares of Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities at the time such Convertible Securities
first become convertible or exchangeable shall (as of the date of issue or grant
of such Options or, in the case of the issue or sale of Convertible Securities
other than where the same are issuable upon the exercise of Options, as of the
date of such issue or sale) be deemed to be issued and to be outstanding for the
purpose of this Section 3.2 and to have been issued for the sum of the amount
(if any) paid for such Options or Convertible Securities plus the amount (if
any) payable upon the exercise of such Options or upon conversion or exchange of
such Convertible Securities at the time such Convertible Securities first become
convertible or exchangeable; provided that, subject to the provisions of Section
3.2.3, no further adjustment of the Stock Purchase Price shall be made upon the
actual issuance of any such Stock or Convertible Securities or upon the
conversion or exchange of any such Convertible Securities.
3.2.3 Change in Option Price or Conversion. In the event that
the purchase price provided for in any Option referred to in subsection 3.2.2.3,
or the rate at which any Convertible Securities referred to in subsection
3.2.2.3 are convertible into or exchangeable for shares of Stock shall change at
any time or any additional consideration shall be payable in connection with the
exercise of any Option or the conversion or exchange of any Convertible Security
(other than under or by reason of provisions designed to protect against
dilution upon the occurrence of events of the type described in this Section 3),
then, for purposes of any adjustment required by Section 3.2, the Stock Purchase
Price in effect at the time of such event shall forthwith be readjusted to the
Stock Purchase Price that would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such changed
purchase price, conversion rate or additional consideration, as the case may be,
at the time initially granted, issued or sold, provided that if such
readjustment is an increase in the Stock Purchase Price, such readjustment shall
not exceed the amount (as adjusted by Sections 3.2 and 3.2) by which the Stock
Purchase Price was decreased pursuant to Section 3.2 upon the issuance of the
Option or Convertible Security.
3.2.4 Termination of Option or Conversion Rights. In the event
of the termination or expiration of any right to purchase Stock under any Option
granted after the date of this Warrant or of any right to convert or exchange
Convertible Securities issued after the date of this Warrant, the Stock Purchase
Price shall, upon such termination, be readjusted after the Stock Purchase Price
that would have been in effect at the time of such expiration or termination had
such Option or Convertible Security, to the extent outstanding immediately prior
to such expiration or termination, never been issued, and the shares of
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Stock issuable thereunder shall not longer be deemed to be Stock Outstanding,
provided that if such readjustment is an increase in the Stock Purchase Price,
such readjustment shall not exceed the amount (as adjusted by Sections 3.1 and
3.2) by which the Stock Purchase Price was decreased pursuant to Section 3.2
upon the issuance of the Option or Convertible Security. The termination or
expiration of any right to purchase Stock under any Option granted prior to the
date of this Warrant or of any right to convert or exchange Convertible
Securities issued prior to the date of this Warrant shall not trigger any
adjustment to the Stock Purchase Price, but the shares of Stock issuable under
such Options or Convertible Securities shall not longer be counted in
determining the number of shares of Stock Outstanding on the date of issuance of
this Warrant for purposes of subsequent calculations under this Section 3.2
3.2.5 Excluded Stock. Notwithstanding anything herein to the
contrary, the Stock Purchase Price shall not be adjusted pursuant to this
Section 3.2 by virtue of the issuance and/or sale of Excluded Stock, which shall
mean the following: (a) Stock, Options or Convertible Securities representing up
to 2,000,000 shares of Stock (or such greater number of shares of Stock as
authorized by the Board of Directors) in the aggregate to be issued and/or sold
to employees, advisors, directors or officers of, or consultants to, the Company
or any of its subsidiaries pursuant to a stock grant, stock option plan,
restricted stock agreements, stock purchase plan, pension or profit sharing plan
or other stock agreement or arrangement approved by the Company's Board of
Directors, (b) the issuance of shares of Stock, Options and/or Convertible
Securities pursuant to Options and/or Convertible Securities outstanding as of
the date of this Warrant; (c) issuance of shares of Stock and/or Convertible
Securities to the Placement Agent in respect of the transaction represented by
the subscription agreement related to the issuance of this Warrant; and (d) the
issuance of shares of Stock, Options or Convertible Securities as a stock
dividend or upon any split or combination of shares of Stock or Convertible
Securities. For all purposes of this Section 3.2, all shares of Excluded Stock
shall be deemed to have been issued for an amount of consideration per share
equal to the initial Stock Purchase Price (subject to adjustment in the manner
set forth in Section 3.1).
3.3 Notice of Adjustment. Promptly after adjustment of the Stock
Purchase Price or any increase or decrease in the number of shares purchasable
upon the exercise of this Warrant, the Company shall give written notice
thereof, by first-class mail, postage prepaid, addressed to the registered
Holder of this Warrant at the address of such Holder as shown on the books of
the Company. The notice shall be signed by the Company's President or Chief
Executive Officer and shall state the effective date of the adjustment and the
Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
3.4 Notices. If at any time:
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(a) the Company shall declare any cash dividend upon its Stock;
(b) the Company shall declare any dividend upon its Stock payable in stock
(other than a dividend payable solely in shares of Stock) or make any special
dividend or other distribution to the Holder of its Stock;
(c) there shall be any consolidation or merger of the Company with another
corporation, or a sale of all or substantially all of the Company's assets to
another corporation; or
(d) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of such Holder as shown on the books of the Company, (i)
at least 30 days prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
dissolution, liquidation or winding-up; (ii) at least 10 days prior written
notice of the date on which the books of the Company shall close or a record
shall be taken for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger or sale, and (iii) in
the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, at least 30 days written notice of
the date when the same shall take place. Any notice given in accordance with
clause (i) above shall also specify, in the case of any such dividend,
distribution or option rights, the date on which the Holder of Stock shall be
entitled thereto. Any notice given in accordance with clause (iii) above shall
also specify the date on which the Holder(s) of Stock shall be entitled to
exchange their Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, as the case may be. If the Holder of the Warrant does
not exercise this Warrant prior to the occurrence of an event described above,
except as provided in Sections 3.1 and 3.5, the Holder shall not be entitled to
receive the benefits accruing to existing holders of the Stock in such event.
Notwithstanding anything herein to the contrary, if and to the extent the Holder
chooses to exercise this Warrant within the 10- day period following receipt of
the notice specified in clause (ii) above, the Holder may elect to pay the
aggregate Stock Purchase Price by delivering to the Company cash or a cashier's
check in the amount of the aggregate par value of the shares of Stock to be
purchased and the Holder's full recourse Promissory Note in the amount of the
balance of the aggregate Stock Purchase Price, which Note shall be payable to
the order of the Company in a single sum on the 30th day following the date of
receipt of such notice and shall bear interest at the lowest applicable federal
short-term rate (using monthly compounding) as established pursuant to Section
1274(d) of the Internal Revenue Code of 1986, as amended, or any successor
provision; provided, however, that if the Holder elects to deliver such a
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Promissory Note to the Company, the Holder will pledge to the Company all Stock
issued in connection with the exercise of this Warrant, and the Company shall
retain possession of the certificates evidencing such Stock, until such time as
the Note is paid in full.
3.5 Changes in Stock. In case at any time following the Commencement
Date hereof, the Company shall be a party to any transaction (including, without
limitation, a merger, consolidation, sale of all or substantially all of the
Company's assets or recapitalization of the Stock) in which the previously
outstanding Stock shall be changed into or exchanged for different securities of
the Company or common stock or other securities of another corporation or
interests in a noncorporate entity or other property (including cash) or any
combination of any of the foregoing (each such transaction being herein called
the "Transaction" and the date of consummation of the Transaction being herein
called the "Consummation Date"), then as a condition of the consummation of the
Transaction, lawful and adequate provisions shall be made so that each Holder,
upon the exercise hereof on or before the Consummation Date, shall be entitled
to receive, and this Warrant shall thereafter represent the right to receive, in
lieu of the Stock issuable upon such exercise prior to the Consummation Date,
the highest amount of securities or other property to which such Holder would
actually have been entitled as a stockholder upon the consummation of the
Transaction if such Holder had exercised such Warrant immediately prior thereto.
The provisions of this Section 3.5 shall similarly apply to successive
Transactions.
3.6 Termination of Dilutive Protection. Immediately following the
Next Public Offering all antidilution provisions of this Section 3 shall become
null, void and of no further force or effect.
4. Issue Tax. The issuance of certificates for shares of Stock upon the exercise
of the Warrant shall be made without charge to the Holder of the Warrant for any
issue tax in respect thereof, 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 issuance and delivery of any certificates in a name other than that of
the then Holder of the Warrant being exercised.
5. No Voting or Dividend Rights; Limitation of Liability. Nothing contained in
this Warrant shall be construed as conferring upon the Holder hereof the right
to vote or to consent or to receive notice as a stockholder in respect of
meetings of stockholders for the election of directors of the Company or any
other matters or any rights whatsoever as a stockholder of the Company. Except
for the adjustment to the Stock Purchase Price pursuant to Section 3.1 in the
event of a dividend on the Stock payable in shares of Stock, no dividends or
interest shall be payable or accrued in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised. No provisions hereof, in
the absence of affirmative action by the Holder to purchase shares of Stock, and
no mere enumeration herein of the rights or privileges of the Holder hereof,
shall give rise to any liability of such Holder for
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the Stock Purchase Price or as a stockholder of the Company whether such
liability is asserted by the Company or by its creditors.
6. Restrictions on Transferability of Securities; Compliance with
Securities Act.
6.1 Restrictions on Transferability. This Warrant and the Warrant
Shares (the "Securities") shall not be transferable in the absence of
Registration under the Act (as defined below) or an exemption therefrom under
said Act.
6.2 Restrictive Legend. Each certificate representing the Securities or
any other securities issued in respect of the Securities upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event, shall
be stamped or otherwise imprinted with a legend substantially in the following
form (in addition to any legend required under applicable state securities
laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS COMPANY, IS AVAILABLE.
7. Registration Rights. The Common Stock underlying this Warrant is
subject to a Registration Rights Agreement entered into by Holder of even date
herewith and which is incorporated herein by reference and attached hereto as
Exhibit A.
8. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought,
9. Notices. Any notice, request or other document required or permitted to be
given or delivered to the Holder hereof or the Company shall be delivered or
shall be sent by certified or registered mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
10. Description Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the internal laws of the State of Maryland.
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11. Lost Warrants or Stock Certificates. The Company represents and warrants to
Holder the upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of any Warrant or stock certificate
and, in the case of any such loss, theft or destruction, and if requested, upon
receipt of an indemnity bond reasonably satisfactory to the Company, or in the
case of any such mutilation, upon surrender and cancellation of such Warrant or
stock certificate, the Company at its expense will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
12. Fractional Shares. No fractional shares shall be issued upon exercise of
this Warrant. The Company shall, in lieu of issuing any fractional share pay the
Holder entitled to such fraction a sum in cash equal to the fair market value of
any such fractional interest as it shall appear on the public market, or if
there is no public market for such shares, then as shall be reasonably
determined by the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer, thereunto duly authorized as of this ____ day of July, 1996.
CHEUNG LABORATORIES, INC.
By: ___________________________
Signature
By: ___________________________
Print Name
Title: ___________________________
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FORM OF SUBSCRIPTION AGREEMENT
(To be signed and delivered upon exercise of Warrant)
[DATE]
Attention: _______________
Cheung Laboratories, Inc.
10220-I Old Columbia Road
Columbia, Maryland 21046-1705
Dear __________:
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, _______ shares of Common Stock, par value $0.01 per share
(the "Common Stock") of Cheung Laboratories, Inc. (the "Company") and subject to
the following paragraph, herewith makes payment of _______________ Dollars
($________) therefor and requests that the certificates for such shares be
issued in the name of, and delivered to, _________________________________ whose
address is
.
If the shares issuable upon the exercise of this Warrant are not
covered by a registration statement effective under the Securities Act of 1933,
as amended, (the "Securities Act"), the undersigned represents as of the date
hereof that:
(i) the undersigned is acquiring such Common Stock for
investment for his own account, not as nominee or agent, and not with a view to
the distribution thereof and the undersigned has not signed or otherwise
arranged for the selling, granting any participation in, or otherwise
distributing the same,
(ii) the undersigned has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the undersigned's investment in the Common Stock,
(iii) the undersigned has received all of the information the
undersigned has requested from the Company and considers necessary or
appropriate for deciding whether to purchase the shares of Common Stock,
(iv) the undersigned has the ability to bear the economic risk
of his prospective investment,
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(v) the undersigned is able, without materially impairing his
financial condition, to hold the shares of Common Stock for an indefinite period
of time and to suffer complete loss on his investment,
(vi) the undersigned understands and agrees that (A) he may be
unable to readily liquidate his investment in the shares of Common Stock and
that the shares must be held indefinitely unless a subsequent disposition
thereof is registered or qualified under the Securities Act and applicable state
securities or Blue Sky laws or is exempt from such registration or
qualification, and that the Company is not required to register the same or to
take any action or make such an exemption available except to the extent
provided in the within Warrant, and (B) the exemption from registration under
the Securities Act afforded by Rule 144 promulgated by the Securities and
Exchange Commission ("Rule 144") depends upon the satisfaction of various
conditions by the undersigned and the Company and that, if applicable, Rule 144
affords the basis for sales under certain circumstances in limited amounts, and
that if such exemption is utilized by the undersigned, such conditions must be
fully complied with by the undersigned and the Company, as required by Rule 144,
(vii) the undersigned is (A) familiar with the definition of
and the undersigned is an "accredited investor" within the meaning of such term
under Rule 501 of Regulation D promulgated under the Securities Act, or (B) is
providing representations and warranties reasonably satisfactory to the Company
and its counsel, to the effect that the sale and issuance of Common Stock upon
exercise of such Warrant may be made without registration under the Securities
Act or any applicable state securities and Blue Sky laws, and
(viii) the address set forth below is the true and correct
address of the undersigned's residence.
Dated: ________________
________________________
Signature
Signature must conform in all respects to the name of Holder as specified on the
face of the Warrant)
Address: _______________________
_______________________
_______________________
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