NEITHER THIS WARRANT NOR THE SECURITIES TO BE RECEIVED UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER
ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION, IN THE
ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION WITH
RESPECT TO SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE
STATE SECURITIES LAWS OR (2) AN EXEMPTION FROM SUCH QUALIFICATION AND
REGISTRATION.
COMMON STOCK PURCHASE WARRANT
No. ___ ____________, 1999
NETGATEWAY, INC., a Nevada corporation (the "Company"), having its
executive offices at 300 Oceangate, Suite 500, Long Beach, California 90802,
does hereby certify and agree that, for good and valuable consideration (the
existence, sufficiency and receipt of which are hereby acknowledged by the
Company
________________________________________________________________________________
his heirs, successors and assigns ("Holder"), hereby is entitled to purchase
from the Company, during the term set forth in Section 1 hereof, up to an
aggregate amount of * * shares (the "Exercise Quantity") of duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock, par value
US$.001 per share, of the Company (the "Common Stock"), all upon the terms and
provisions and subject to adjustment of such Exercise Quantity as provided in
this Common Stock Purchase Warrant (the "Warrant"). The exercise price per share
of Common Stock for which this Warrant is exercisable shall be _______ AND
___/ONE HUNDREDTHS DOLLARS ($____), as adjusted from time to time pursuant to
the terms of this Warrant (the "Exercise Price").
The term of this Warrant commences as of the date hereof, and
shall expire at 5:00 P.M., Pacific time, on ______, 2001. In
the event that this Warrant would expire on a day that is not
a Business Day (as defined below), then the term of this
Warrant automatically shall be extended to 5:00 P.M., Pacific
time, on the next succeeding Business Day.
This Warrant may be exercised by the Holder of this Warrant at any time
during the term hereof, in whole or in part, from time to time (but not for
fractional shares, unless this Warrant is exercised in whole), by
presentation and surrender of this Warrant to the Company, duly completed
and executed for exercise, together with payment in the aggregate amount
equal to the Exercise Price multiplied by the number of shares of Common
Stock being purchased. Payment of the Exercise Price shall be by certified
check payable to the order of the Company. Upon the Company's receipt of
this Warrant, duly completed and signed for exercise, and the requisite
payment, the Company shall issue and deliver (or cause to be delivered) to
the exercising Holder stock certificates aggregating the number of shares
of Common Stock purchased. In the event of a partial exercise of this
Warrant, the Company shall issue and deliver to the Holder a new Warrant at
the same time such stock certificates are delivered, which new Warrant
shall entitle the Holder to purchase the balance of the Exercise Quantity
not purchased in that partial exercise and shall otherwise be upon the same
terms and provisions as this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized representative and its corporate seal, if any, to be
impressed hereupon and attested to by its Secretary or Assistant Secretary.
NETGATEWAY, INC.,
a Nevada corporation
Attest:
By: _______________________________ By: ________________________
Hanh M. Ngo Donald M. Corliss, Jr.
Secretary President
1. Exercise. Upon the due exercise by the Holder of this Warrant,
whether in whole or in part, the Holder (or any other person to whom a stock
certificate is to be so issued) shall be deemed for all purposes to have become
the Holder of record of the shares of Common Stock for which this Warrant has
been so exercised (the "Warrant Securities"), effective immediately prior to the
close of business on the date this Warrant, the completed and signed Exercise
Form and the requisite payment were duly delivered to the Company, irrespective
of the date of actual delivery of certificates representing such shares of
Common Stock so issued. In the event the Holder of this Warrant desires that any
or all of the stock certificates to be issued upon the exercise hereof be
registered in a name or names other than that of the Holder of this Warrant, the
Holder must (i) so request in writing at the time of exercise if the transfer is
not a registered transfer, (ii) provide to the Company an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act, and (iii) pay to
the Company funds sufficient to pay all stock transfer taxes (if any) payable in
connection with the transfer and delivery of such stock certificates.
2. Surrender of Warrant; Expenses. Whether in connection with the
exercise, exchange, registration of transfer or replacement of this Warrant,
surrender of this Warrant shall be made to the Company during normal business
hours on a Business Day (unless the Company otherwise permits) at the executive
offices of the Company specified above, or to such other office or duly
authorized representative of the Company as from time to time may be designated
by the Company by written notice given to the Holder of this Warrant. The Holder
shall pay all costs and expenses incurred in connection with the exercise,
registering, exchange, transfer or replacement of this Warrant (excluding the
costs of preparation, execution and delivery of warrants and stock certificates)
and shall pay all taxes and other charges imposed by law payable in connection
with the exercise, registration, exchange, transfer or replacement of this
Warrant.
3. Warrant Register; Transfer; Loss. The Company at all times shall
maintain at its chief executive offices an open register for all Warrants, in
which the Company shall record the name and address of each person to whom a
Warrant has been issued or transferred, the number of shares of Common Stock or
other securities purchasable thereunder and the corresponding purchase prices.
Neither this Warrant nor the Warrant Securities, when issued, may be
transferred: (a) if such transfer would constitute a violation of any federal or
state securities laws or a breach of the conditions to any exemption from
registration thereunder and (b) unless and until one of the following has
occurred: (i) registration of this Warrant or the Warrant Securities, as the
case may be, under the Securities Act, and such registration or qualification as
may be necessary under the securities laws of any state, have become effective,
or (ii) the Holder has delivered evidence reasonably satisfactory to the Company
that such registration or qualification is not required. This Warrant may be
transferred only in accordance with the provisions hereof, in whole or in part,
by the Holder or any duly authorized representative of such Holder. A transfer
may be registered with the Company by submission to it of this Warrant, duly
completed and signed for assignment, and an opinion of counsel reasonably
satisfactory to the Company. Within five (5) Business Days after the Company's
receipt of this Warrant so completed and executed and opinion, the Company will
issue and deliver to the transferee a new Warrant representing the portion of
the Exercise Quantity transferred at the same Exercise Price per share and
otherwise having the same terms and provisions as this Warrant, which the
Company will register in the new Holder' s name. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant, and (a) in the case of loss, theft or
destruction, upon receipt by the Company of indemnity reasonably satisfactory to
it or (b) in the case of mutilation, upon surrender and cancellation thereof,
the Company, at its expense, will execute, register and deliver, in lieu
thereof, a new certificate or instrument for (or covering the purchase of) this
Warrant. The Company will from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Common Stock
acquirable upon exercise of this Warrant is at all times equal or less than the
Exercise Price then in effect.
4. Adjustment of Exercise Price in the Event of Dividends, Stock Splits
and Reverse Stock Splits. In case the Company shall at any time issue Common
Stock or Common Stock equivalents by way of a dividend or other distribution on
any stock of the Company or effect a stock split or reverse stock split of the
outstanding shares of Common Stock, the Exercise Price then in effect shall be
proportionately decreased in the case of such issuance (on the day following the
date fixed for determining shareholders entitled to receive such dividend or
other distribution) or decreased in the case of such stock split or increased in
the case of such reverse stock split (on the date that such stock split or
reverse stock split shall become effective), by multiplying the Exercise Price
in effect immediately prior to the stock dividend, stock split or reverse stock
split by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately prior to such stock dividend, stock split or
reverse stock split, and the denominator of which is the number of shares of
Common Stock outstanding immediately after such stock dividend, stock split or
reverse stock split.
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5. Reorganization; Asset Sales; Etc. In case of (i) any capital
reorganization or any reclassification of the capital stock of the Company, (ii)
any consolidation or merger of the Company with or into another corporation or
entity, (iii) the disposition or transfer of the assets of the Company other
than in the ordinary course of the Company's business, or (iv) the dissolution,
liquidation or winding up of the Company, the Holder of this Warrant shall
thereafter be entitled to purchase upon exercise hereof the kind and amount of
shares of stock and other securities and property receivable in such transaction
by a holder of the number of shares of Common Stock of the Company into which
this Agreement entitled the holder to purchase immediately prior to such capital
reorganization, reclassification of capital stock, non-surviving combination or
disposition.
6. Certain Definitions. "Fair Value" as of a particular date shall mean
the last sale price of the Common Stock as reported on a national securities
exchange or on the Nasdaq SmallCap or National Market System or, if a last sale
reporting quotation is not available for the Common Stock, the average of the
bid and asked prices of the Common Stock as reported by The Nasdaq Stock Market,
Inc. or on Nasdaq's OTC Bulletin Board Service, or if not so reported, as listed
in the National Quotation Bureau, Inc.'s "Pink Sheets." If such quotations are
unavailable, or with respect to other appropriate security, property, assets,
business or entity, "Fair Value" shall mean the fair value of such item as
determined by the Board of Directors of the Company.
7. Governing Law. WITH RESPECT TO CORPORATE MATTERS, THIS WARRANT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEVADA AND, WITH RESPECT TO ALL OTHER MATTERS, THIS WARRANT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, IN EACH CASE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Exercise; Transfer. The undersigned Holder of this Warrant hereby
irrevocably elects to exercise this Warrant to the extent of
[____________________________] shares of Common Stock, $.001 par value per
share, of the Company. The undersigned herewith encloses a certified check
payable to the order of the Company in the amount of $_____________ in payment
of the Exercise Price.
FOR VALUE RECEIVED, the undersigned Holder hereby sells, assigns and
transfers unto the transferee whose name and address are set forth below all of
the rights of the undersigned under this Warrant (to the extent of the portion
of the within Warrant being transferred hereby, which portion is
______________).
Name of Transferee: ___________________________________
State of Organization (if applicable): ________________
Federal TIN or SSN: ___________________________________
Address: ______________________________________________
The undersigned does hereby irrevocably constitute and appoint
________________________ attorney to register the foregoing transfer on the
books of the Company maintained for that purpose, with full power of
substitution in the premises. As required, enclosed herewith is the opinion of
legal counsel for the undersigned.
If this exercise or transfer is not an exercise or transfer in full,
then the undersigned Holder hereby requests that a new Warrant of like tenor
(exercisable for the balance of the Exercise Quantity of shares of Common Stock
underlying this Warrant) be issued and delivered to the undersigned Holder at
the address on the warrant register of the Company.
Dated: ____________________
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(Name of Registered Holder - Please Print)
By: ________________________________
(Signature of Registered Holder or of
Duly Authorized Signatory)
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