Contract
Exhibit
4.4
THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT
AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF
MAY 2, 2008, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM,
SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH ACT.
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Right to
Purchase
5,555,555
Shares of
Common
Stock, par value
$.0001
per share
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SERIES
B STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value
received, XXXXXX XXXXXX
IRREVOCABLE TRUST U/T/A or its registered assigns, is entitled to
purchase from FIRSTWAY
ENTERPRISES, INC., a Delaware corporation (the “Company”), at any time or
from time to time during the period specified in Paragraph 2 hereof,
5,555,555 fully paid and nonassessable shares of the Company’s Common Stock, par
value $.0001 per share (the “Common Stock”), at an exercise price per share
equal to $.30 (the “Exercise Price”). The term “Warrant Shares,” as used herein,
refers to the shares of Common Stock purchasable hereunder. The
Warrant Shares and the Exercise Price are subject to adjustment as provided in
Paragraph 4 hereof. The term “Warrants” means this Warrant and the
other warrants issued pursuant to that certain Securities Purchase Agreement,
dated May 2, 2008, by and among the Company and the Buyers listed on the
execution page thereof (the “Securities Purchase Agreement”).
This
Warrant is subject to the following terms, provisions, and
conditions:
1. Manner of Exercise; Issuance
of Certificates; Payment for Shares.
This
Warrant may be exercised by the holder hereof, in whole or in part, by the
surrender of this Warrant, together with a completed exercise agreement in the
form attached hereto (the “Exercise Agreement”), to the Company during normal
business hours on any business day at the Company’s principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the holder hereof), and upon payment to the Company in cash, by certified or
official bank check or by wire transfer for the account of the Company of
the Exercise Price for the Warrant Shares specified in the Exercise
Agreement.
If the
resale of the Warrant Shares by the holder is not registered pursuant to an
effective registration statement under the Securities Act of 1933, as amended by
November 2, 2009, this Warrant (or any portion thereof) may be exercised by
presentation and surrender of this Warrant to the Company at its principal
executive offices with a written notice of the holder’s intention to effect a
cashless exercise, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
“Cashless Exercise”). In the event of a Cashless Exercise, in lieu of
paying the Exercise Price in cash, the holder shall surrender this Warrant for
that number of shares of Common Stock determined by multiplying the number of
Warrant Shares to which it would otherwise be entitled by a fraction, the
numerator of which shall be the difference between the then current Market Price
per share of the Common Stock and the Exercise Price, and the
denominator of which shall be the then current Market Price per share of Common
Stock. For example, if the holder is exercising 100,000 Warrants with
a per Warrant exercise price of $0.75 per share through a cashless exercise when
the Common Stock’s current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common
Stock. Market Price per share shall be calculated as the average
closing sales price (or closing bid price) of the Company's Common Stock for the
prior five trading days.
1
Notwithstanding
anything in this Warrant to the contrary, in no event shall the holder of this
Warrant be entitled to exercise a number of Warrants (or portions thereof) in
excess of the number of Warrants (or portions thereof) upon exercise of which
the sum of (i) the number of shares of Common Stock beneficially owned by the
holder and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised Warrants and the
unexercised or unconverted portion of any other securities of the Company
(including the Note (as defined in the Securities Purchase Agreement)) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 4.999% of the outstanding shares of
Common Stock. For purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder,
except as otherwise provided in clause (i) of the preceding sentence. The 4.999%
limitation may only be waived by the holder of the warrant upon 61 days written
notice to the Company.
2. Period of
Exercise.
This
Warrant is exercisable at any time or from time to time on or after the date on
which this Warrant is issued and delivered pursuant to the terms of the
Securities Purchase Agreement and before 6:00 p.m., New York, New York time on
the fourth (4th)
anniversary of the date of issuance (the “Exercise Period”).
3. Certain Agreements of the
Company.
The
Company hereby covenants and agrees as follows:
(a) Shares to
be Fully Paid. All Warrant
Shares will, upon issuance in accordance with the terms of this Warrant, be
validly issued, fully paid, and nonassessable and free from all taxes, liens,
and charges with respect to the issue thereof.
(b) Reservation
of Shares. During the
Exercise Period, the Company shall at all times have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of this
Warrant.
4. Antidilution
Provisions.
During
the Exercise Period, the Exercise Price and the number of Warrant Shares shall
be subject to adjustment from time to time as provided in this Paragraph
4.
In the
event that any adjustment of the Exercise Price as required herein results in a
fraction of a cent, such Exercise Price shall be rounded up to the nearest
cent.
(a) Adjustment
of Exercise Price and Number of Shares upon Issuance of Common Stock. Except as
otherwise provided in Paragraphs 4(c) and 4(e) hereof or with respect to an
Excluded Issuance (as defined in the Note), if and whenever on or after the date
of issuance of this Warrant, the Company issues or sells, or in accordance with
Paragraph 4(b) hereof is deemed to have issued or sold, any shares of Common
Stock for no consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in
connection therewith) less than the Conversion Price (as defined in the Note) on
the date of issuance (a “Dilutive Issuance”), then immediately upon the Dilutive
Issuance, the Exercise Price will be reduced to a price equal to a product of
(x) the Exercise Price in effect immediately prior to such issue or sale and (y)
the quotient of (1) the sum of (I) the product derived by multiplying the
Exercise Price in effect immediately prior to such time by the number of shares
of Common Stock Deemed Outstanding immediately prior to such issue or sale plus
(II) the consideration received by the Company upon such issue or sale, by (2)
the product derived by multiplying (I) the Exercise Price in effect immediately
prior to such time by (II) the number of shares of common stock deemed
outstanding immediately after such issue or sale. The issuance by the
Company of securities convertible or exchangeable into shares of Common Stock at
conversion or exchange price less than the Conversion Price shall be deemed a
Dilutive Issuance resulting in a reduction in the Exercise price as calculated
herein. For example, if the Company has 50,000,000 shares of common
stock outstanding, the Exercise Price is $.24, and the Company subsequently
sells 10,000,000 shares of common stock at $.10, then the Exercise Price will be
reduced to $.1667 based on the above formula as follows:
$0.24 x
($.24 x 50,000,000) +
($.10 x 10,000,000) = $.2166
($.24 x 60,000,000)
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(b) Subdivision
or Combination of Common Stock. If the Company at
any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the
Company at any time combines (by reverse stock split, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price in effect immediately
prior to such combination will be proportionately increased.
(c) Adjustment
in Number of Shares. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Paragraph 4,
the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
(d) Consolidation,
Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the Company other than in connection with a plan of complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance, adequate provision will be made whereby the holder of this
Warrant will have the right to acquire and receive upon exercise of this Warrant
in lieu of the shares of Common Stock immediately theretofore acquirable upon
the exercise of this Warrant, such shares of stock, securities or assets as may
be issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision
to insure that the provisions of this Paragraph 4 hereof will thereafter be
applicable as nearly as may be in relation to any shares of stock or securities
thereafter deliverable upon the exercise of this Warrant. The Company
will not effect any consolidation, merger or sale or conveyance unless prior to
the consummation thereof, the successor corporation (if other than the Company)
assumes by written instrument the obligations under this Paragraph 4 and the
obligations to deliver to the holder of this Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the holder
may be entitled to acquire.
(e) Minimum
Adjustment of Exercise Price. No adjustment of
the Exercise Price shall be made in an amount of less than 5% of the Exercise
Price in effect at the time such adjustment is otherwise required to be made,
but any such lesser adjustment shall be carried forward and shall be made at the
time and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
(f) No
Fractional Shares. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but
the Company shall pay a cash adjustment in respect of any fractional share which
would otherwise be issuable in an amount equal to the same fraction of the
Market Price of a share of Common Stock on the date of such
exercise.
(g) Other
Notices. In case at any
time:
(i) the
Company shall declare any dividend upon the Common Stock payable in shares of
stock of any class or make any other distribution (including dividends or
distributions payable in cash out of retained earnings) to the holders of the
Common Stock;
(ii) the
Company shall offer for subscription pro rata to the holders of the Common Stock
any additional shares of stock of any class or other rights;
(iii) there
shall be any capital reorganization of the Company, or reclassification of
the Common Stock, or consolidation or merger of the Company with or into, or
sale of all or substantially all its assets to, another corporation or
entity; or
(iv) there
shall be a voluntary or involuntary dissolution, liquidation or winding up
of the Company;
then, in
each such case, the Company shall give to the holder of this Warrant (a) notice
of the date on which the books of the Company shall close or a record shall be
taken for determining the holders of Common Stock entitled to receive any such
dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange their
Common Stock for stock or other securities or property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, or winding-up, as the case may be. Such notice shall be
given at least 30 days prior to the record date or the date on which the
Company’s books are closed in respect thereto. Failure to give any
such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
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(h) Intentionally
left blank.
(i) Certain
Definitions.
(i) “Common
Stock Deemed Outstanding” shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company).
(ii) “Common
Stock,” for
purposes of this Paragraph 4, includes the Common Stock, par value $.0001 per
share, and any additional class of stock of the Company having no preference as
to dividends or distributions on liquidation, provided that the shares
purchasable pursuant to this Warrant shall include only shares of Common Stock,
par value $.001 per share, in respect of which this Warrant is exercisable, or
shares resulting from any subdivision or combination of such Common Stock, or in
the case of any reorganization, reclassification, consolidation, merger, or sale
of the character referred to in Paragraph 4(d) hereof, the stock or other
securities or property provided for in such Paragraph.
5. Issue
Tax.
The
issuance of certificates for Warrant Shares upon the exercise of this Warrant
shall be made without charge to the holder of this Warrant or such shares for
any issuance tax or other costs in respect thereof, provided 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 the holder of this Warrant.
6. No Rights or Liabilities as
a Shareholder.
This
Warrant shall not entitle the holder hereof to any voting rights or other rights
as a shareholder of the Company. No provision of this Warrant, in the
absence of affirmative action by the holder hereof to purchase Warrant Shares,
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 Exercise Price or as a
shareholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
7. Transfer, Exchange, and
Replacement of Warrant.
(a) Restriction
on Transfer. This Warrant and
the rights granted to the holder hereof are transferable, in whole or in part,
upon surrender of this Warrant, together with a properly executed assignment in
the form attached hereto, at the office or agency of the Company referred to in
Paragraph 7(e) below, provided, however, that any transfer or
assignment shall be subject to the conditions set forth in Paragraph 7(f) hereof
and to the applicable provisions of the Securities Purchase
Agreement. Until due presentment for registration of transfer on the
books of the Company, the Company may treat the registered holder hereof as the
owner and holder hereof for all purposes, and the Company shall not be affected
by any notice to the contrary.
(b) Warrant
Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office
or agency of the Company referred to in Paragraph 7(e) below, for new Warrants
of like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.
(c) Replacement
of Warrant. 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 delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company, or, in the case
of any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
(d) Cancellation;
Payment of Expenses. Upon the
surrender of this Warrant in connection with any transfer, exchange, or
replacement as provided in this Paragraph 7, this Warrant shall be promptly
canceled by the Company. The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than legal expenses, if
any, incurred by the holder or transferees) and charges payable in connection
with the preparation, execution, and delivery of Warrants pursuant to this
Paragraph 7.
(e) Register. The Company shall
maintain, at its principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder hereof), a register for
this Warrant, in which the Company shall record the name and address of the
person in whose name this Warrant has been issued, as well as the name and
address of each transferee and each prior owner of this Warrant.
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(f) Exercise
or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the “Securities Act”) and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee execute
and deliver to the Company an investment letter in form and substance acceptable
to the Company and (ii) that the transferee be an “accredited investor” as
defined in Rule 501(a) promulgated under the Securities Act; provided that no
requirements are applicable in connection with a transfer pursuant to Rule 144
under the Securities Act. The first holder of this Warrant, by taking
and holding the same, represents to the Company that such holder is acquiring
this Warrant for investment and not with a view to the distribution
thereof.
8. [Intentionally
Omitted]
9. Notices. All
notices, requests, and other communications required or permitted to be given or
delivered hereunder to the holder of this Warrant shall be in writing, and shall
be personally delivered, or shall be sent by certified or registered mail or by
recognized overnight mail courier, postage prepaid and addressed, to such holder
at the address shown for such holder on the books of the Company, or at such
other address as shall have been furnished to the Company by notice from such
holder. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the Company shall be in writing,
and shall be personally delivered, or shall be sent by certified or registered
mail or by recognized overnight mail courier, postage prepaid and addressed, to
the office of the Company at 000 Xxxxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxx 00000, Attention: Chief Executive Officer, or at
such other address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other
communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered
mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive
such notice at the address of such person for purposes of this Paragraph 9, or,
if mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.
10. Governing
Law. THIS
WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF FLORIDA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION
OF THE FLORIDA STATE COURT IN DADE COUNTY, FLORIDA WITH RESPECT TO ANY DISPUTE
ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED INTO IN CONNECTION HEREWITH
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY
WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A
PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT
A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT
OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN
ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN
CONNECTION WITH SUCH DISPUTE. THE PARTIES HERETO EXPRESSLY WAIVE THE
RIGHT TO TRIAL BY JURY.
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11. Miscellaneous.
(a) Amendments. This Warrant and
any provision hereof may only be amended by an instrument in writing signed by
the Company and the holder hereof.
(b) Descriptive
Headings. The descriptive
headings of the several paragraphs of this Warrant are inserted for
purposes of reference only, and shall not affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by its duly authorized
officer.
| FIRSTWAY ENTERPRISES, INC. | |||
|
Dated
as of May 2, 2008
|
By:
|
/s/ Xxxxxxx Xxxxx | |
| Xxxxxxx Xxxxx | |||
| Chief Executive Officer | |||
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FORM
OF EXERCISE AGREEMENT
Dated: __________,
200_
To: ______________________
The
undersigned, pursuant to the provisions set forth in the within Warrant, hereby
agrees to purchase ________ shares of Common Stock covered by such Warrant, and
makes payment herewith in full therefor at the price per share provided by
such Warrant in cash or by certified or official bank check in the amount of
$_________. Please issue a certificate or certificates for such
shares of Common Stock in the name of and pay any cash for any fractional share
to:
Name: ___________________________
Signature:_________________________
Address:__________________________
_________________________
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Note:
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The
above signature should correspond exactly with the name on the face of the
within Warrant, if applicable.
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and, if
said number of shares of Common Stock shall not be all the shares purchasable
under the within Warrant, a new Warrant is to be issued in the name of said
undersigned covering the balance of the shares purchasable thereunder less any
fraction of a share paid in cash.
FORM
OF ASSIGNMENT
FOR VALUE RECEIVED, the
undersigned hereby sells, assigns, and transfers all the rights of the
undersigned under the within Warrant, with respect to the number of shares of
Common Stock covered thereby set forth hereinbelow, to:
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Name
of Assignee
|
Address
|
No of Shares
|
, and
hereby irrevocably constitutes and appoints ___________________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the
premises.
Dated: ________
__, 200_
In the
presence
of: ______________________________
Name:_________________________
Signature:_______________________
Title of
Signing Officer or Agent (if any):
______________________________
Address: _______________________
______________________________
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|
Note:
|
The
above signature should correspond exactly with the name on the face of the
within Warrant, if applicable.
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