1
Warrant No. WF-__
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE
SHARES OF SERIES F PREFERRED STOCK OF
BIOSTAR, INC.
(VOID AFTER JUNE 20, 2002)
This certifies that ______________________________ (the "Holder"), or
assigns, for value received, is entitled to purchase from BioStar, Inc., a
Delaware corporation (the "Company"), having a place of business at 6655
Lookout Road, Boulder, Colorado 80301, a maximum of
__________________________________________ fully paid and nonassessable shares
of the Company's Series F Preferred Stock ("Series F Stock"), and any security
into or for which such Series F Stock may hereafter be converted or exchanged
pursuant to the Certificate of Incorporation of the Company as from time to
time amended as provided by law, for cash at a price of Eighty-Eight Cents
($.88) per share (the "Stock Purchase Price") at any time or from time to time
up to and including 5:00 p.m. (Mountain Time) on the earliest of (i) the fourth
anniversary of the closing of the initial public offering of the Company's
Common Stock pursuant to a registration statement under the Securities Act of
1933, as amended (the "1933 Act"), (ii) June 20, 2002, or (iii) the closing of
a consolidation or merger of the Company with or into any other corporation or
corporations, or a sale, conveyance or disposition of all or substantially all
of the assets of the Company, such earliest day being referred to herein as the
"Expiration Date," upon surrender to the Company at its principal office (or at
such other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Subscription Form attached hereto as Exhibit
A duly filled in and signed and, if applicable, upon payment in cash or by
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 the number of shares purchasable hereunder
are subject to adjustment as provided in Section 3 of this Warrant.
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
1.1 GENERAL. This Warrant is exercisable at the option of the holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Series F Stock (but not for a fraction of a
share) which may be purchased hereunder.
1.2 ISSUANCE OF CERTIFICATES. The Company agrees that the shares of Series
F Stock purchased under this Warrant shall be and are deemed to be issued to
the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered,
properly endorsed, the completed, executed Subscription Form (a copy of
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which is attached hereto as Exhibit A) delivered and payment made for such
shares. Certificates for the shares of Series F Stock so purchased, together
with any other securities or property to which the Holder hereof is entitled
upon such exercise, shall be delivered to the Holder hereof by the Company at
the Company's expense within a reasonable time after the rights represented by
this Warrant have been so exercised. Each stock certificate so delivered shall
be in such denominations of Series F Stock as may be requested by the Holder
hereof and shall be registered in the name of such Holder. In case of a
purchase of less than all the shares which may be purchased under this Warrant,
the Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under the
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time.
1.3 NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Series F Stock
is greater than the Stock Purchase Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Form of
Subscription and notice of such election in which event the Company shall issue
to the Holder a number of shares of Series F Stock computed using the following
formula:
X= Y(A-B)
------
A
Where X = The number of shares of Series F Stock to be issued to
Holder
Y = the number of shares of Series F Stock purchasable
under the Warrant or, if only a portion of the Warrant
is being exercised, the portion of the Warrant being
canceled (at the date of such cancelation)
A = the fair market value of one share of the Company's
Series F Stock (at the date of such calculation)
B = Stock Purchase Price (as adjusted to the date of such
calculations)
For purposes of the above calculation, the fair market value of one share of
Series F Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that in the event the Company makes an initial public
offering of its Common Stock the fair market value per share shall be: (i) if
the Warrant is being converted in connection with and contingent upon a public
offering of the Company's securities, and if the Company's registration
statement relating to such public offering has been declared effective by the
U.S. Securities and Exchange Commission, then the fair market value of the
Series F Stock shall be the initial "Price to Public" specified in the final
prospectus with respect to such offering multiplied by the number of shares of
Common Stock into which each share of Series F Stock is then convertible; or
(ii) if the Warrant is not being converted in connection with and contingent
upon a public offering of the Company's securities, then as follows: (x) if
traded on a securities exchange or the Nasdaq National Market, the fair market
value of the Common Stock shall be deemed to be the average of the closing or
last reported sale prices of the Common Stock on such exchange or market over
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the 30-day period ending five business days prior to the date of calculation,
and the fair market value of the Series F Stock shall be deemed to be such fair
market value of the Common Stock multiplied by the number of shares of Common
Stock into which each share of Series F Stock is then convertible or (y) if
otherwise traded in an over-the-counter market, the fair market value of the
Common Stock shall be deemed to be the average of the reported closing bid and
ask prices of the Common Stock over the 30-day period ending five business days
prior to the date of calculation, and the fair market value of the Series F
Stock shall be deemed to be such fair market value of the Common Stock
multiplied by the number of shares of Common Stock into which each share of
Series F Stock is then convertible.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Series F Stock that may be issued upon the
exercise of the rights represented by this Warrant will, 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 issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Series F Stock, or other securities and property, when and as required
to provide for the exercise of the rights represented by this Warrant. The
Company will take all such action as may be necessary to assure that such
shares of Series F Stock may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of any domestic
securities exchange upon which the Series F Stock may be listed; provided,
however, that the Company shall not be required to effect a registration under
Federal or State securities laws with respect to such exercise. The Company
will not take any action which would result in any adjustment of the Stock
Purchase Price (as set forth in Section 3 hereof) (i) if the total number of
shares of Series F Stock issuable after such action upon exercise of all
outstanding warrants and options, together with all shares of Series F Stock
then outstanding and all shares of Series F Stock then issuable upon the
conversion of all convertible securities then outstanding, would exceed the
total number of shares of Series F Stock then authorized by the Company's
Certificate of Incorporation, or (ii) if the total number of shares of Common
Stock issuable after such action upon the conversion of all outstanding shares
of Series F Stock, together with all shares of Common Stock then issuable upon
the conversion of all shares of Series F Stock then issuable upon exercise of
all outstanding warrants and options, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all warrants and options and upon the conversion of all convertible securities
then outstanding would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and 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. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the
number of shares obtained by multiplying the Stock Purchase Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such
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adjustment, and dividing the product thereof by the Stock Purchase Price
resulting from such adjustment.
3.1 SUBDIVISION OF COMBINATION OF STOCK. In case the Company shall at any
time subdivide its outstanding shares of Series F Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Series F Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If
at any time or from time to time the Holders of Series F Stock (or any shares
of stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,
3.2.1 Series F Stock or any shares of stock or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Series F Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution;
3.2.2 Any cash paid or payable otherwise than as a cash
dividend; or
3.2.3 Series F Stock or additional stock or other
securities or property (including cash) by way of spin-off, split-up,
reclassification, combination of shares or similar corporate rearrangement
(other than (i) shares of Series F Stock issued as a stock split, adjustments
in respect of which shall be covered by the terms of Section 3.1 above or (ii)
an event for which adjustment is otherwise made pursuant to Section 3.3 below);
then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Series
F Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses 3.2.2 and 3.2.3 above)
which such Holder would hold on the date of such exercise had he been the
holder of record of such Series F Stock as of the date on which holders of
Series F Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any recapitalization, reclassification or capital reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets or
other transaction shall be effected in such a way that holders of Series F
Stock shall be entitled to receive stock, securities, or other assets or
property (a "Restructuring"), then, as a condition of such Restructuring,
lawful and adequate provisions shall be made whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Series F Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock, securities or other assets or property as may be issued or payable with
respect to or in exchange for a number
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of outstanding shares of such Series F Stock equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby; provided, however, that in the event the
value of the stock, securities or other assets or property (determined in good
faith by the Board of Directors of the Company) issuable or payable with
respect to one share of the Series F Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby is in excess of the Stock Purchase Price hereof effective at
the time of a merger and securities received in such reorganization, if any,
are publicly traded, then this Warrant shall expire unless exercised prior to
the Restructuring. In any Restructuring described above, appropriate provision
shall be made with respect to the rights and interests of the Holder of this
Warrant to the end that the provisions hereof (including, without limitation,
provisions for adjustments of the Stock Purchase Price and of the number of
shares purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof.
The Company will not effect any such consolidation, merger or sale unless,
prior to the consummation thereof, the successor corporation (if other than the
Company) resulting from such consolidation or the corporation purchasing such
assets shall assume by written instrument, executed and mailed or delivered to
the registered Holder hereof at the last address of such Holder appearing on
the books of the Company, the obligation to deliver to such Holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to purchase.
3.4 NOTICE OF ADJUSTMENT. Upon any 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 and shall state 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.
3.5 OTHER NOTICES. If at any time:
3.5.1 the Company shall declare any cash dividend upon its
Series F Stock;
3.5.2 the Company shall declare any dividend upon its
Series F Stock payable in stock or make any special dividend or other
distribution to the holders of its Series F Stock;
3.5.3 there shall be any Restructuring;
3.5.4 there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company; or
3.5.5 there shall be an initial public offering of Company
securities;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address
of such Holder as shown on the books of
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the Company, (a) at least ten (10) 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 Restructuring, dissolution, liquidation or winding-up,
and (b) in the case of any such Restructuring, dissolution, liquidation,
winding-up or public offering, at least ten (10) days prior written notice of
the date when the same shall take place; provided, however, that the Holder
shall make a best efforts attempt to respond to such notice as early as
possible after the receipt thereof. Any notice given in accordance with the
foregoing clause (a) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Series F
Stock shall be entitled thereto. Any notice given in accordance with the
foregoing clause (b) shall also specify the date on which the holders of Series
F Stock shall be entitled to exchange their Series F Stock for securities or
other property deliverable upon such Restructuring, dissolution, liquidation,
winding-up or public offering, as the case may be.
3.6 CERTAIN EVENTS. If any change in the outstanding Series F Stock of the
Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with such provisions, the Board of Directors of the Company shall make an
adjustment in the number and class of shares available under the Warrant, the
Stock Purchase Price or the application of such provisions, so as to protect
such purchase rights as aforesaid. The adjustment shall be such as will give
the Holder of the Warrant upon exercise for the same aggregate Stock Purchase
Price the total number, class and kind of shares as he would have owned had the
Warrant been exercised prior to the event and had he continued to hold such
shares until after the event requiring adjustment.
4. ISSUE TAX. The issuance of certificates for shares of Series F Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) 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 certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Series F Stock issued
or issuable upon the exercise of any warrant in any manner which interferes
with the timely exercise of this Warrant.
6. 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 of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company. 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 provision hereof in the absence of affirmative action by the
holder to purchase shares of Series F 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.
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7. INVESTORS' RIGHTS AGREEMENT. The registration rights of the Holder
(including Holder's successors) with respect to this Warrant and the underlying
stock will be the same as granted to the holders of the Company's Series F
Stock.
8. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed and in
compliance with such provisions. Each taker and holder of this Warrant, by
taking or holding the same, consents and agrees that this Warrant, when
endorsed in blank, shall be deemed negotiable, and that the holder hereof, when
this Warrant shall have been so endorsed, may be treated by the Company, at the
Company's option, and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise
the rights represented by this Warrant, or to the transfer hereof on the books
of the Company any notice to the contrary notwithstanding; but until such
transfer on such books, the Company may treat the registered owner hereof as
the owner for all purposes.
9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Series F Stock issued upon exercise of this Warrant, referred to in
Sections 7 and 8 shall survive the exercise of this Warrant.
10. MODIFICATION AND WAIVER. Any change, waiver, discharge or termination
agreed to in writing by a majority in interest of holders of warrants of the
Company of even date shall be binding on Holder and assigns.
11. 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 first-class 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 or such other
address as either may from time to time provide to the other.
12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Series F Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
13. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description 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 laws of the State of Colorado.
14. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of
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an indemnity reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant, the Company, at its
expense, will make and deliver a new Warrant, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Warrant.
15. 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 such fraction
multiplied by the then effective Stock Purchase Price.
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IN WITNESS WHEREOF,the Company has caused this Warrant to be duly
executed by its President and Chief Executive Officer, thereunto duly
authorized this _____ day of June, 1997.
BIOSTAR, INC.,
a Delaware corporation
---------------------------------
Teresa W. Ayers
President/Chief Executive Officer
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EXHIBIT A
SUBSCRIPTION FORM
Date:______________, 19___
BioStar, Inc.
6655 Lookout Road
Boulder, Colorado 80301
Attn: President/Chief Executive Officer
Ladies and Gentlemen:
[ ] The undersigned hereby elects to exercise the warrant issued to it by
BioStar, Inc. (the "Company") and dated June 20, 1997, Warrant No.
WF-1 (the "Warrant") and to purchase thereunder __________ shares of
the Series F Preferred Stock of the Company (the "Shares") at a
purchase price of Eighty-Eight Cents ($.88) per Share, or an aggregate
purchase price of ___________________________________ ($__________)
(the "Purchase Price").
[ ] The undersigned hereby elects to convert ___________________ percent
(___%) of the value of the Warrant pursuant to the provisions of
Section 1.3 of the Warrant.
Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
The undersigned also makes the representations set forth on the attached
Exhibit B of the Warrant.
Very truly yours,
------------------------------------
By:
--------------------------------
Title:
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EXHIBIT B
INVESTMENT REPRESENTATIONS
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO BIOSTAR, INC. ALONG
WITH THE SUBSCRIPTION FORM BEFORE THE SERIES F PREFERRED STOCK ISSUABLE UPON
EXERCISE OF THE WARRANT DATED __________________, 199__, WILL BE ISSUED.
_____________________, 19__
BioStar, Inc.
6655 Lookout Road
Boulder, Colorado 80301
Attn: President/Chief Executive Officer
Ladies and Gentlemen:
The undersigned, __________________________ ("Purchaser"), intends to
acquire up to _______________ shares of the Series F Preferred Stock (the
"Series F Stock") of BioStar, Inc. (the "Company") from the Company pursuant to
the exercise or conversion of certain Warrants to purchase Series F Stock held
by Purchaser. The Series F Stock will be issued to Purchaser in a transaction
not involving a public offering and pursuant to an exemption from registration
under the Securities Act of 1933, as amended (the "1933 Act") and applicable
state securities laws. Purchaser has been advised that the Series F Stock has
not been registered under the 1933 Act or state securities laws on the ground
that this transaction is exempt from registration, and that reliance by the
Company on such exemptions is predicated in part on Purchaser's representations
set forth in this letter. Accordingly, Purchaser represents, warrants and
agrees as follows:
1. Purchaser is acquiring the Series F Stock for its own account
and beneficial interest, to hold for investment and not for sale or with a view
to distribution of the Series F Stock or any part thereof. Purchaser has no
present intention of selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the same, and does not
presently have reason to anticipate a change in such intention.
2. Purchaser acknowledges that it has received all the
information it has requested from the Company and considers necessary or
appropriate for deciding whether to acquire the Series F Stock. Purchaser
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series F Stock and to obtain any additional information necessary to verify the
accuracy of the information given the Purchaser. Purchaser further represents
that it has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risk of this investment.
3. Purchaser is an "accredited investor" as such term is defined
in Rule 501 under the 1933 Act.
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4. Purchaser acknowledges that investment in the Series F Stock
involves a high degree of risk, and represents that it is able, without
materially impairing its financial condition, to hold the Series F Stock for an
indefinite period of time and to suffer a complete loss of its investment.
5. Purchaser has been informed that under the 1933 Act, the
Series F Stock must be held indefinitely unless it is subsequently registered
under the 1933 Act or unless an exemption from such registration (such as Rule
144) is available with respect to any proposed transfer or disposition by
Purchaser of the Series F Stock. Purchaser further agrees that the Company may
refuse to permit Purchaser to sell, transfer or dispose of the Series F Stock
(except as permitted under Rule 144) unless there is in effect a registration
statement under the 1933 Act and any applicable state securities laws covering
such transfer, or unless Purchaser furnishes an opinion of counsel reasonably
satisfactory to counsel for the Company, to the effect that such registration
is not required. Purchaser shall not make any sale, transfer or other
disposition of the Series F Stock in violation of the 1933 Act or the General
Rules and Regulations promulgated thereunder by the Securities and Exchange
Commission or in violation of any applicable state securities law.
6. Purchaser also understands and agrees that there will be
placed on the certificate(s) for the Series F Stock, or any substitutions
therefor, a legend stating in substance:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), or any
state securities laws. These shares have been acquired for investment
and may not be sold or otherwise transferred in the absence of an
effective registration statement for these shares under the 1933 Act
and applicable state securities laws, or an opinion of counsel
satisfactory to the Company that registration is not required and that
an applicable exemption is available."
Purchaser has carefully read this letter and has discussed its
requirements and other applicable limitations upon Purchaser's resale of the
Series F Stock with Purchaser's counsel.
Very truly yours,
--------------------------------
By:
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Title:
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2.