THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
APPLICABLE STATE LAW. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE LAW.
No. W-__
WARRANT FOR THE PURCHASE OF
156,000 SHARES OF COMMON STOCK
OF
CASH SYSTEMS, INC.
(A Delaware Corporation)
Cash Systems, Inc., a Delaware corporation, formerly known as Unistone,
Inc., a Delaware corporation (the "Company"), and successor to Cash Systems,
Inc., Minnesota corporation ("CS"), hereby certifies that Corporate Capital
Management, LLC, a Minnesota limited liability company, or its registered
permitted assigns (the "Registered Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time or from time to
time during the period commencing October 9, 2001 and ending on July 13, 2006,
156,000 shares of Common Stock, $0.01 par value, of the Company (the "Common
Stock"), at a purchase price equal to $1.50 per share. The number of shares
of Common Stock purchasable upon exercise of this Warrant, and the purchase
price per share, are hereinafter referred to as the "Warrant Stock" and the
"Purchase Price", respectively. This Warrant shall replace and supercede in
its entirety that certain Warrant For The Purchase of 156,000 Shares of CS in
favor of Registered Holder dated July 13, 2001, which is of no further force
and effect and which was exchanged for this Warrant pursuant to a Plan of
Reorganization and Stock Exchange Agreement, dated October 9, 2001, by and
among the Company and CS and others.
1. Exercise.
(a) This Warrant may be exercised by the Registered Holder, in
whole or in part, by surrendering this Warrant, with the purchase form
appended hereto as Exhibit A duly executed by such Registered Holder, at the
principal office of the Company, or at such other office or agency as the
Company may designate, accompanied by payment in full, in lawful money of the
United States, of the Purchase Price payable in respect of the number of
shares of Warrant Stock purchased upon such exercise. Notwithstanding any
provisions herein to the contrary, if the fair market value of one share of
the Common Stock is greater than the Purchase Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant for cash,
the Registered 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 purchase form and notice of such election in which event
the Company shall issue to the Registered Holder a number of shares of Common
Stock computed using the following formula:
X = Y(A-B)
A
Where X = the number of shares of Common Stock to be issued to the
Registered Holder
Y= the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the portion
of the Warrant being exercised (at the date of such calculation)
A= the fair market value of one share of the Company's Common
Stock (at the date of such calculation)
B= the Purchase Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, fair market value of one share of
Common Stock shall be the average for the five (5) day trading period ending
on the day immediately prior to the date of exercise (as set forth herein) of
the mean between the low bid and high asked closing prices for the Common
Stock quoted on the over-the-counter market as reported by the listed market
makers in the Common Stock or, if this is not applicable, then on the basis of
the then fair market value of the Common Stock as shall be reasonably
determined by the Board of Directors of the Company.
(b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Warrant shall have been surrendered to the Company as provided in Subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrants shall be issuable upon such exercise as provided in
Subsection 1(c) below shall be deemed to have become the holder or holders of
record of the Warrant Stock represented by such certificates.
(c) As soon as practicable after the exercise of this Warrant in
full or in part, and in any event within three (3) days thereafter, the
Company at its expense will cause to be issued in the name of, and delivered
to, the Registered Holder, or, subject to the terms and conditions hereof, as
such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of whole
shares of Warrant Stock to which such Registered Holder shall be entitled upon
such exercise plus, in lieu of any fractional share to which such Registered
Holder would otherwise be entitled, cash in an amount determined pursuant to
Section 3 hereof; and
(ii) in case such exercise is in part only, a new Warrant
or Warrants (dated the date hereof) of like tenor, calling in the aggregate on
the face or faces thereof for the number of shares of Warrant Stock equal
(without giving effect to any adjustment therein) to the number of such shares
called for on the face of this Warrant, less the number of such shares of
Warrant Stock purchased by the Registered Holder upon such exercise as
provided in Subsection 1(a) above.
(d) Unless registered under the Securities Act of 1933, as
amended (the "Act"), each certificate for Warrant Stock purchased upon
exercise of this Warrant shall bear a legend as follows:
"The securities represented by this certificate have not
been registered under the Securities Act of 1933, as
amended (the "Act") or applicable state law. The
securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective
registration statement under the Act, or pursuant to an
exemption from registration under the Act and applicable
state law."
(e) Notwithstanding the foregoing, the Registered Holder agrees
that the shares of Common Stock may be purchased hereunder only upon and after
the Closing (as defined by the Promissory Note).
2. Adjustments.
(a) If the outstanding shares of the Common Stock shall be
subdivided or split into a greater number of shares or a dividend in Common
Stock shall be paid in respect of Common Stock, the Purchase Price in effect
immediately prior to such subdivision or at the record date of such dividend
shall simultaneously with the effectiveness of such subdivision or immediately
after the record date of such dividend be proportionately reduced. If the
outstanding shares of Common Stock shall be combined or reverse-split into a
smaller number of shares, the Purchase Price in effect immediately prior to
such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased. When any adjustment is required to
be made in the Purchase Price, the number of shares of Warrant Stock
purchasable upon the exercise of this Warrant shall be changed to the number
determined by dividing (i) an amount equal to the number of shares issuable
upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such
adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(b) If there shall occur any capital reorganization or
reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in Subsection 2(a) above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, or the
payment of a liquidating distribution, then, as part of any such
reorganization, reclassification, consolidation, merger, sale or liquidating
distribution, lawful provision shall be made so that the Registered Holder of
this Warrant shall have the right thereafter to receive upon the exercise
hereof (to the extent, if any, still exercisable) the kind and amount of
shares of stock or other securities or property which such Registered Holder
would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger, sale or liquidating
distribution, as the case may be, such Registered Holder had held the number
of shares of Warrant Stock which were then purchasable upon the exercise of
this Warrant. In any such case, appropriate adjustment (as reasonably
determined by the Board of Directors of the Company) shall be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the Registered Holder of this Warrant such that the
provisions set forth in this Section 2 (including provisions with respect to
adjustment of the Purchase Price) shall thereafter be applicable, as nearly as
practicable, in relation to any shares of stock or other securities or
property thereafter deliverable upon the exercise of this Warrant.
(c) No adjustment in the per share Purchase Price shall be
required unless such adjustment would require an increase or decrease in the
Purchase Price of at least $0.01; provided, however, that any adjustments
which by reason of this subsection are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 2 shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be. Anything in this Section 2 to
the contrary notwithstanding, the Company shall be entitled to make such
reductions in the per share Purchase Price, in addition to those required by
this Section 2, as in its discretion it shall deem to be advisable in order
that any stock dividend, subdivision of shares or distribution rights to
purchase stock or securities convertible or exchangeable for stock hereafter
made by the Company to its stockholders shall not be taxable.
(d) Upon the happening of any event requiring an adjustment of
the Purchase Price hereunder, the Company shall forthwith give written notice
thereto to the Registered Holder of this Warrant stating the adjusted Purchase
Price and the adjusted number of shares of Warrant Stock purchasable upon the
exercise hereof resulting from such event and setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based. Such notice shall be final and binding thirty (30) days after its
delivery, unless the Registered Holder objects thereto by written notice to
the Company within such time period.
3. Fractional Shares. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the mean between the low bid and
high asked prices for the Warrant Stock on the over-the-counter market as
reported by the listed market makers in the Common Stock on the trading day
immediately prior to the date of exercise, or if this is not applicable, then
on the basis of the then market value of the Warrant Stock as shall be
reasonably determined by the Board of Directors of the Company.
4. Certain Dividends. It is within the sole discretion of the Board of
Directors of the Company to determine whether a dividend or distribution shall
be paid. In any event, the Company shall not pay a dividend or make a
distribution on the Common Stock payable otherwise than in cash out of
earnings or earned surplus (determined in accordance with generally accepted
accounting principles) except for a stock dividend payable in shares of Common
Stock.
5. Notices of Record Date, etc. In case:
(a) the Company shall make a record of the holders of its Common
Stock (or other securities at the time issuable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution (other than a dividend or distribution payable solely in
capital stock of the Company or out of funds legally available therefor), or
to receive any right to subscribe for or purchase any shares of stock of any
class or any other securities, or to receive any other right; or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company; then, and in each case, the Company will mail or
cause to be mailed to the Registered Holder of this Warrant a notice
specifying, as the case may be, (i) the date on which a record is to be made
for the purpose of such dividend, distribution or right, and stating the
amount and character of such dividend, distribution or right, or (ii) the
effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is to take place, and
the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such other stock or securities as are at the time issuable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed
at least ten (10) days prior to the record date or effective date, for the
event specified in such notice, provided that the failure to mail such notice
shall not affect the legality or validity of any such action.
6. Reservation of Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this
Warrant, such number of shares of Warrant Stock and other stock, securities
and property, as from time to time shall be issuable upon the exercise of this
Warrant.
7. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of
an indemnity agreement (with surety if reasonably required) in an amount
reasonably satisfactory to the Company, or (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will issue, in lieu
thereof, a new Warrant of like tenor.
8. Registration Rights.
8.1 "Piggy-Back" Registration.
8.1.1 Grant of Right. The Registered Holder of this Warrant shall
have the right to include all or any portion of this Warrant requested by the
Registered Holder and all of the securities underlying such Warrant, including
the Warrant Stock underlying this Warrant (collectively, the "Registerable
Securities"), as part of any registration of securities filed by the Company
pursuant to the Act (other than in connection with a transaction contemplated
by Rule 145(a) promulgated under the Act or pursuant to Form S-8).
8.1.2 Terms. The Company shall bear all fees and expenses
attendant upon registering the Registerable Securities, but the Registered
Holder shall pay any and all underwriting commissions and the expenses of any
legal counsel selected by the Registered Holder to represent it in connection
with the sale of the Registerable Securities. In the event of such a proposed
registration, the Company shall furnish the Registered Holder of outstanding
Registerable Securities with not less than thirty (30) days' written notice
thereof prior to the proposed date of filing of such registration statement.
Such notice to the Registered Holder shall continue to be given for each
registration statement filed by the Company until such time as all of the
Registerable Securities have been sold by the Registered Holder. The
Registered Holder of the Registerable Securities shall exercise the
"piggy-back" rights provided for herein by giving written notice, within
twenty (20) days of the receipt of the Company's notice of its intention to
file a registration statement. The Company shall cause any registration
statement filed pursuant to the above "piggyback" rights to remain effective
for at least nine (9) months from the date that the Registered Holder of the
Registerable Securities are first given the opportunity to sell all of such
securities.
8.1.3 If a registration pursuant to this Section 8.1 involves an
underwritten offering and the senior managing underwriter of such underwritten
offering shall advise the Company in writing (with a copy to each such selling
stockholder) that, in its opinion, the number of Registerable Securities
requested to be included in such registration would adversely affect such
offering, then the Company shall include in such registration, to the extent
of the number which the Company is so advised can be sold in, or during the
time of, such offering, first, all securities proposed by the Company to be
sold for its own account, and second, the Registerable Securities of the
selling stockholders, apportioned pro rata (as nearly as practicable) among
the selling stockholders according to the total amount of Registerable
Securities proposed to be sold by each or in such other proportions as shall
be mutually agreed upon by such selling stockholders.
8.1.4 If, at any time after giving written notice of its intention
to register any securities and prior to the effective date of the registration
statement filed in connection therewith, the Company shall determine for any
reason not to register, or to delay registration of, such securities, the
Company may, at its election, give written notice of such determination to
each such selling stockholder. In the case of a determination not to
register, the Company shall be relieved of its obligation to register any
Registerable Securities in connection with such registration (but not its
obligation to pay Registration Expenses incurred in connection with such
registration), and in the case of a determination to delay registering, the
Company shall be permitted to delay registering any Registerable Securities in
connection with such registration for as long as the Company delays the
registration of its own securities. There shall be no limit to the number of
registrations that may be requested pursuant to this Section 8.1.4.
8.1.5 Upon receipt of any notice from the Company that the Company
is aware that the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, each Selling Stockholder shall forthwith discontinue disposition of
the Registerable Securities pursuant to the registration statement covering
such Registerable Securities until such Selling Stockholder's receipt of
copies of an amended or supplemented prospectus necessitated thereby.
8.1.6 Each Registered Holder agrees, only if such Registered
Holder's Registerable Securities are included in an Underwritten Offering, not
to effect any public sale of distribution, including any sale pursuant to Rule
144 under the Act, of any shares of Common Stock, or of any security
convertible into or exchangeable or exercisable for any shares of Common Stock
(other than as part of such Underwritten Offering), without the consent of the
Managing Underwriter, during the period designated by the Managing
Underwriter, prior to and after the effective date of such registration.
8.1.7 The Company agrees, if so required by the Managing
Underwriter, not to effect any public sale or distribution of any of its
equity or debt securities, as the case may be, or securities convertible into
or exchangeable or exercisable for any of such equity or debt securities, as
the case may be, during a reasonable period to be agreed upon by the Company
and the Managing Underwriter, except for such Underwritten Offering or except
in connection with a stock option plan, stock purchase plan, savings or
similar plan, dividend reinvestment plan, or an acquisition, merger or
exchange offer.
8.2 General Terms.
8.2.1 Indemnification.
(a) The Company shall indemnify the Registered Holder of
the Registerable Securities to be sold pursuant to any registration statement
hereunder and each person, if any, who controls such Registered Holder within
the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), against all loss, claim,
damage, expense or liability (including all reasonable attorneys' fees and
other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which any of them may become subject under
the Act, the Exchange Act or otherwise, arising from such registration
statement except as and to the extent to which the Registered Holder may be
obliged to indemnify the Company as provided in Paragraph (b) hereof.
(b) The Registered Holder of the Registerable Securities
to be sold pursuant to such registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company against all
loss, claim, damage, expense or liability (including all reasonable attorneys'
fees and other expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which they may become subject under
the Act, the Exchange Act or otherwise, arising from information furnished by
or on behalf of such Registered Holder, or their successors or assigns, in
writing, for specific inclusion in such registration statement.
8.2.2 Exercise of Warrants. Nothing contained in this Warrant
shall be construed as requiring the Registered Holder to exercise this Warrant
prior to or after the initial filing of any registration statement or the
effectiveness thereof.
8.2.3 Documents Delivered to Registered Holder. The Company shall
furnish to each Registered Holder participating in any of the foregoing
offerings and to each underwriter of any such offering, if any, a signed
counterpart, addressed to such Registered Holder or underwriter, of (i) an
opinion of counsel to the Company, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, an opinion dated the date of the closing under any
underwriting agreement related thereto), and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date
of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to each
Registered Holder participating in the offering requesting the correspondence
and memoranda described below and to the managing underwriter copies of all
correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff
with respect to the registration statement and permit each Registered Holder
and underwriter to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement
as it deems reasonably necessary to comply with applicable securities laws or
rules of the National Association of Securities Dealers, Inc. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times and as often as any such Registered Holder shall reasonably request.
8.2.4 Underwriting Agreement. The Company shall enter into an
underwriting agreement with the managing underwriter(s) selected by the
Company in its sole discretion. Such agreement shall be reasonably
satisfactory in form and substance to the Company, each Registered Holder and
such managing underwriters, and shall contain such representations, warranties
and covenants by the Company and such other terms as are customarily contained
in agreements of that type used by the managing underwriter. The Registered
Holder shall be parties to any underwriting agreement relating to an
underwritten sale of their Registrable Securities and may, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be made to and
for the benefit of such Registered Holder. Such Registered Holder shall not be
required to make any representations or warranties to or agreements with the
Company or the underwriters except as they may relate to such Registered
Holder, their shares of Common Stock and their intended methods of
distribution.
8.2.5 Documents to be Delivered by the Registered Holder. Each of
the Registered Holder(s) participating in any of the foregoing offerings shall
furnish to the Company a completed and executed questionnaire provided by the
Company requesting information customarily sought of selling security holders.
9. Transfers, etc.
(a) Subject to compliance with all federal and state
securities laws, this Warrant may be assigned by the Registered Holder without
the prior written consent of the Company, provided that the assignor shall
within ten (10) days after such assignment furnish the Company with written
notice of the name and address of the assignee under such assignment. This
Warrant shall be binding upon and inure to the benefit of and shall be
enforceable by the Registered Holder and the Company and their respective
successors and permitted assigns.
(b) The Company will maintain a register (the "Warrant
Register") containing the name and address of the Registered Holder of this
Warrant. The Registered Holder may change its, his or her address as shown on
the Warrant Register by written notice to the Company requesting such change.
(c) Until any transfer of this Warrant is made in the
Warrant Register, the Company may treat the Registered Holder of this Warrant
as the absolute owner hereof for all purposes; provided, however, that if and
when this Warrant is properly assigned in blank, the Company may (but shall
not be obligated to) treat the bearer hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
10. Mailing of Notices, etc. All notices and other communications
from the Company to the Registered Holder of this Warrant shall be mailed by
first-class certified or registered mail, postage prepaid, sent by reputable
overnight delivery or by facsimile to the address furnished to the Company in
writing by the last Registered Holder of this Warrant who shall have furnished
an address to the Company in writing. All notices and other communications
from the Registered Holder of this Warrant or in connection herewith to the
Company shall be mailed by first-class certified or registered mail, postage
prepaid, sent by reputable overnight delivery or by facsimile to the Company
at its offices at Cash Systems, Inc., 0000 Xxxx Xxxxxx Xxxx 00, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxx 00000, Attn: Xxxxxxxxxxx X. Xxxxxx, or to such other
address as the Company shall so notify the Registered Holder.
11. No Rights as Stockholders. Until the exercise of this Warrant,
the Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company, except as otherwise provided
herein.
12. Change or Waiver. Any term of this Warrant may be changed or
waived only by an instrument in writing signed by the party against whom
enforcement of the change or waiver is sought.
13. Headings. The headings of this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
14. Governing Law. This Warrant will be governed by and construed in
accordance with the laws of the State of Minnesota without regard to the
principles of conflict of law.
15. Venue. The Company and the Registered Holder (a) agree that any
legal suit, action or proceeding arising out of or relating to this Warrant
shall be instituted exclusively in the state or federal courts located in the
State of Minnesota, (b) waive any objection to the venue of any such suit,
action or proceeding and the right to assert that such forum is not a
convenient forum, and (c) irrevocably consents to the jurisdiction of the
state and federal courts located in the State of Minnesota in any such suit,
action or proceeding. The Company further agrees to accept and acknowledge
service of any and all process which may be served in any such suit, action or
proceeding in the state or federal courts located in the State of Minnesota
and agrees that service of process upon it mailed by certified mail to its
address shall be deemed in every respect effective service of process upon it
in any such suit, action or proceeding.
Dated: October 9, 2001 CASH SYSTEMS, INC.
By: ____________________________
Name: ______________________
Title:______________________
EXHIBIT A
PURCHASE FORM
To: Cash Systems, Inc.
0000 Xxxx Xxxxxx Xxxx 00
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Dated: ____________,
In accordance with the provisions set forth in the attached Warrant (No.
__), the undersigned hereby irrevocably elects to purchase __________ shares
of the Common Stock covered by such Warrant and herewith makes payment of
$____________, representing the full purchase price for such shares at the
price per share provided for in such Warrant.
If the Warrant Shares have not been registered under the Securities Act
of 1933, as amended or the securities laws of any other jurisdiction, the
undersigned acknowledges, represents and warrants to, and agrees with the
Company as follows:
The undersigned is not a member of the National Association of
Securities Dealers, Inc. (the "NASD"), has not, for a period of 12 months
prior to the date of this Purchase Form, been affiliated or associated with
any company, firm, or other entity which is a member of the NASD, and does not
own stock or other interest in, and is not a creditor of, any member of the
NASD (other than interests acquired in open market purchases);
The undersigned is an "accredited investor" as defined in Section
2(a)(15) of the Securities Act of 1933, as amended (the "Securities Act") and
in Rule 501 promulgated thereunder;
The Company has advised the undersigned that (i) the Warrant Shares have
not been registered under the Securities Act, nor pursuant to the securities
laws of certain states, in reliance on specific exemptions from registration
thereunder, and (ii) no securities administrator of any state or the Federal
government has recommended or endorsed the sale of the Warrant Shares or made
any findings or determination relating to the fairness of an investment in the
Company;
The undersigned is authorized and qualified to become an investor in the
Company and the person signing this Purchase Form on behalf of the undersigned
has been duly authorized to do so;
The undersigned has had the opportunity to ask questions of and receive
answers from, and to obtain additional information from, the Company or its
representatives necessary to verify the accuracy of the information furnished
by or obtained from the Company or otherwise concerning the assets,
liabilities, business condition (financial or otherwise) and prospects of the
Company;
The undersigned acknowledges that no oral or written statement or
inducement which is contrary to the information described above has been made
by or on behalf of the Company to it;
The undersigned has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
investment in the Company;
The undersigned acknowledges that the Company and its business, legal
and accounting advisors and consultants have not provided any business, legal,
investment or tax advice to the undersigned and no statement by any of such
persons or entities should be construed as such;
The undersigned is acquiring the Warrant Shares solely for its own
account as principal, for investment purposes only and not with a view to the
resale or distribution thereof, in whole or in part, and no other person has a
direct or beneficial interest in such shares;
The undersigned will not sell or otherwise transfer the Warrant Shares
without registration under the Act or an exemption therefrom and fully
understands and agrees that the undersigned must bear the economic risk for an
indefinite period of time because, among other reasons, such stock has not
been registered under the Securities Act or under the securities law of any
state and, therefore, cannot be resold, pledged, assigned or otherwise
disposed of unless subsequently registered under the Securities Act and under
the applicable state securities laws or unless an exemption from such
registration is available. The undersigned understands that any transferee of
the Common Stock may be required to meet the same standards that may be
required of the Undersigned (i.e., a transferee may have to be an accredited
investor). The undersigned further understands that the Company is not under
any obligation to register the Warrant shares on the Lender's behalf except as
provided in the Warrant or to assist the Lender in complying with any
exemption from registration;
Within five days after receipt of a request from the Company, the
undersigned hereby agrees to provide such information and to execute and
deliver such documents as may be reasonably necessary to comply with any and
all laws and ordinances to which the Company is subject; and
The undersigned acknowledges that the Company will affix appropriate
legends on each certificate representing the Warrant Shares of Common Stock,
including the following:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THAT
ACT, OR AN OPINION FROM COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
By: ________________________________
Name:
Title:
