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.
__________ ___, 199___
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. Stock
Purchase Price shall be the average price of the common stock of the public or
private offerings conducted subsequent to the offering set forth in the
Memorandum of the Company dated January 6, 1997 as supplemented June 12, 1997
and ending December 27, 1997 by the Company which raise, in the aggregate, not
less than $8,000,000 (hereafter collectively referred to as the "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 (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 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 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.
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 4,000,000 shares of stock from
Mr. Gao pursuant to a Redemption Agreement, as amended, 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 Purchase Price,
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.
3.2.2 For the purposes of this Section 3.2, the
following provisions shall also be applicable:
(a) 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.
(b) 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.
(c) 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.(c), or the rate at which any
Convertible Securities referred to in subsection 3.2.2.(c) 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 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:
-------
3.4.1 the Company shall declare any cash dividend
upon its Stock;
3.4.2 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;
3.4.3 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
3.4.4 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 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 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 Holder of this Warrant shall have the
registration rights set forth in the Registration Rights Agreement of even date.
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.
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 ________, ____.
CHEUNG LABORATORIES, INC.
By:_________________________________________
Signature
By:_________________________________________
Print Name
Title:_____________________
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,
(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 above 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.