EXHIBIT 4.1
[Form of Warrant Certificate]
EXERCISABLE ON OR BEFORE _______________, 2004
No. 250,000 Warrants
Warrant Certificate
NETGATEWAY, INC.
This Warrant Certificate certifies that Cruttenden Roth Incorporated,
or registered assigns, is the registered holder of Warrants expiring
____________, 2004 (the "Warrants") to purchase Common Stock, $0.001 par value
per share (the "Common Stock"), of Netgateway, Inc., a Delaware corporation (the
"Company"). Each Warrant entitles the holder upon exercise to receive from the
Company from 10:00 a.m., Pacific time, on _____________, 2000 through and until
6:00 p.m., Pacific time, on ____________, 2004, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the initial exercise price (the
"Warrant Price") of [$_____] payable in lawful money of the United States of
America upon surrender of this Warrant Certificate and payment of the Warrant
Price at the conditions set forth herein and in the Warrant Agreement referred
to on the reverse hereof. The Warrant Price and number of Warrant Shares
issuable upon exercise of the Warrants are subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
No Warrant may be exercised after 6:00 p.m., Pacific time, on
___________, 2004 (the "Expiration Date"). Notwithstanding the foregoing, if at
6:00 p.m., Pacific time on the Expiration Date, any Holder or Holders of the
Warrants have not exercised their Warrants and the Closing Price (as defined in
the Warrant Agreement) for the Common Stock on the Expiration Date is greater
than the Warrant Price, then each such unexercised Warrant shall be
automatically converted into a number of shares of Common Stock of the Company
equal to: (A) the number of shares of Common Stock then issuable upon exercise
of a Warrant multiplied by (B) a fraction (1) the numerator of which is the
difference between the Closing Price for the Common Stock on the Expiration Date
and the Warrant Price and (2) the denominator of which is the Closing Price for
the Warrant Stock on the Expiration Date.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this price.
This Warrant Certificate shall not be valid unless countersigned by the
Company.
1
IN WITNESS WHEREOF, Netgateway, Inc. has caused this Warrant
Certificate to be signed by its President and by its Secretary and has caused
its corporate seal to be affixed hereunto or imprinted hereon.
Dated: ________________ 1999
NETGATEWAY, INC.
By:
Name:
Title:
By:
Name:
Title:
2
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring _____________, 2004 entitling the holder
on exercise to receive shares of Common Stock, $0.001 par value per share, of
the Company (the "Common Stock"), and are issued or to be issued pursuant to a
Warrant Agreement, dated as of ___________, 1999 (the "Warrant Agreement"), duly
executed and delivered by the Company, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.
The Warrants may be exercised at any time on or before ____________,
2004. The holder of Warrants evidenced by this Warrant Certificate may exercise
them by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with payment
of the Warrant Price in cash at the office of the Company designated for such
purpose. In the event that upon any exercise of Warrants evidenced hereby the
number of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or his assignee a
new Warrant Certificate evidencing the number of Warrants not exercised. No
adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant shall be adjusted. If the number of shares of Common Stock issuable upon
such exercise is adjusted, the Warrant Agreement provides that the Warrant Price
set forth on the face hereof may, subject to certain conditions, be adjusted. No
fractions of a share of Common Stock will be issued upon the exercise of any
Warrants but the Company will pay the cash value thereof determined as provided
in the Warrant Agreement. The Warrant Agreement also provides that, while the
Warrants are exercisable, the holders of the Warrants shall have an optional
conversion right to convert, without payment of any exercise price or any cash
or other consideration by such holders, the Warrants or any portion thereof into
a number of shares of Common Stock as specified in the Warrant Agreement.
The holders of the Warrants are entitled to certain registration rights
with respect to the Common Stock purchasable upon exercise thereof. Said
registration rights are set forth in full in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Company by
the registered holder thereof in person or by legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but
3
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Company, a new Warrant certificate or Warrant
certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to other transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company may deem and treat the registered holder(s) thereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, of any distribution to the holder(s) hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to
any rights of a stockholder of the Company.
4
(Form of Election to Purchase)
(To be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant certificate, to receive ____________ shares of
Common Stock and herewith tenders payment for such shares to the order of
Netgateway, Inc., in the amount of $___________ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _____________________________, whose address is
______________________________________ and that such shares be delivered to
_______________________ whose address is______________________________________
_______________________________________. If said number of shares is less than
all of the shares of Common Stock purchasable hereunder, the undersigned
requests that a new Warrant certificate representing the remaining balance of
such shares be registered in the name of ________________________, whose address
is _______________________, and that such Warrant certificate be delivered to
_______________, whose address is _______________________________.
Signature:
Date:
Signature Guaranteed:
5