Exhibit 4.3
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES, BUT ANY PLEDGEE SHALL BE SUBJECT TO THE
REQUIREMENTS SET FORTH IN THIS WARRANT AS A HOLDER.
COMMON STOCK PURCHASE WARRANT
To Purchase _______ Shares of Common Stock of
Interactive Systems Worldwide Inc.
Warrant No. __
THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for $1.00
and other valuable consideration received, ________ (the "Holder"), is entitled,
upon the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after November 24, 2003 (the "Initial
Exercise Date") and on or prior to the close of business on the fifth
anniversary of the Initial Exercise Date (the "Termination Date") but not
thereafter, to subscribe for and purchase from Interactive Systems Worldwide
Inc., a corporation incorporated in Delaware (the "Company"), up to _______
shares (the "Warrant Shares") of Common Stock, par value $0.001 per share, of
the Company (the "Common Stock"). The purchase price of one share of Common
Stock (the "Exercise Price") under this Warrant shall be $5.06, subject to
adjustment hereunder. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Securities Purchase Agreement
(the "Purchase Agreement"), dated November 24, 2003, between the Company and the
purchasers signatory thereto.
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1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part (but if in part, not
in amounts less than the right to purchase 10,000 Warrant Shares), at the office
or agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed, provided that any such transferee is an "accredited investor"
as defined in Rule 501(a) promulgated under the Securities Act. Prior to any
transfer, the transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company. Notwithstanding anything to the contrary
contained herein, no Holder may assign this Warrant or any of its rights
hereunder to a competitor or potential competitor of the Company.
2. Authorization of Warrant Shares. The Company represents and warrants
that all Warrant Shares which may be issued upon the exercise of the purchase
rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue or income taxes, if any, payable by the Holder).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this
Warrant may be made at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by payment of the
Exercise Price in cash or by means of a "cashless exercise" in the
manner described below. If this Warrant is exercised by means of a
cashless exercise, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the VWAP on the Trading Day immediately preceding the
date of such election;
(B) = the Exercise Price of the Warrants, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise
of this Warrant in accordance with the terms of this
Warrant.
The Holder may exercise its aforementioned purchase rights by
delivery to the Company of a duly executed original or facsimile copy
of the Notice of Exercise Form annexed hereto (or such other office or
agency of the Company as the Company may designate by notice in writing
to the registered Holder at the address of such Holder appearing on the
books of the Company) together with (a) payment of the aggregate
Exercise Price of the shares thereby purchased by wire transfer to an
account designated by the Company or cashier's check drawn on a United
States bank, or (b) by designating on the Notice of Exercise Form that
the exercise is on a cashless basis; provided, however, that within 3
Trading Days after the date such Notice of Exercise is delivered to the
Company, the Holder shall surrender this Warrant to the Company.
Certificates for shares purchased hereunder shall be delivered to the
Holder promptly after the date on which the Notice of Exercise shall
have been delivered by original or facsimile copy and payment of the
aggregate Exercise Price (if the Exercise Price is being paid in cash)
shall have been received by the Company as set forth above. This
Warrant shall be deemed to have been exercised on the date the Notice
of Exercise is delivered to the Company and, if the Exercise Price is
being paid in cash, the aggregate Exercise Price shall have been paid.
The Warrant Shares shall be deemed to have been issued, and Holder or
any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of
the date the Warrant has been exercised and all taxes required to be
paid by the Holder, if any, pursuant to Section 5 prior to the issuance
of such shares, have been paid.
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(b) If this Warrant shall have been exercised in part, the
Company shall promptly deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
(c) If at any time after the date of issuance of this Warrant
there is no effective Registration Statement registering the resale of
the Warrant Shares by the Holder, and until such time as there is an
effective Registration Statement, then in the event that this Warrant
is exercised prior to the Effective Date, the shares issuable upon such
exercise shall bear the legend set forth in Section 4.1(b) of the
Purchase Agreement.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
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7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws
and the conditions set forth in Sections 1 and 7(e) hereof and to the
provisions of Section 4.1 of the Purchase Agreement, this Warrant and
all rights hereunder are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company,
together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its duly authorized
agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. No such assignment shall be
valid and enforceable unless such assignee is an "accredited investor"
and until any such assignee shall have executed and delivered to the
Company an accredited investor questionnaire in the form of Exhibit A
hereto. Upon such surrender and, if required, such payment, the Company
shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled.
(b) This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the
Holder or its duly authorized agent or attorney; provided, however,
that Warrants to purchase less than 10,000 Warrant Shares need not be
issued unless the total number of Warrant Shares for which the Warrant
may be exercised is less than 10,000 Warrant Shares. Subject to
compliance with Section 7(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be
divided or combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under
this Section 7.
(d) The Company agrees to maintain, at its aforesaid office,
books for the registration and the registration of transfer of the
Warrants.
(e) If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this
Warrant shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable state
securities or blue sky laws, the Company may require, as a condition of
allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion
of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions and shall
be reasonably satisfactory to the Company) to the effect that such
transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment
letter in form and substance acceptable to the Company and (iii) that
the transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act.
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8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise as
provided in Section 3) and all applicable taxes, if any, the Warrant Shares so
purchased shall be and be deemed to be issued to such Holder as the record owner
of such shares as of the close of business on the later of the date of such
surrender or payment. The Company shall be entitled to treat the Holder of the
Warrant as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
(a) Stock Splits, etc. The number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the happening of
any of the following. In case the Company, at any time while the
Warrant is outstanding, shall (i) pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to all holders
of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine
(including by way of reverse stock split) its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the
Common Stock, then the number of Warrant Shares purchasable upon
exercise of this Warrant immediately prior thereto shall be adjusted so
that the Holder shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which it would have
owned or have been entitled to receive had such Warrant been exercised
in advance thereof. Upon each such adjustment of the kind and number of
Warrant Shares or other securities of the Company which are purchasable
hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares purchasable pursuant
hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company resulting from
such adjustment. An adjustment made pursuant to this paragraph shall
become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
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(b) Anti-Dilution Provisions. During the Exercise Period, the
Exercise Price shall be subject to adjustment from time to time as
provided in this Section 11(b). 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 or down to the nearest cent.
(i) Adjustment of Exercise Price. If and whenever the
Company issues or sells, or in accordance with Section
11(b)(ii) hereof is deemed to have issued or sold, any shares
of Common Stock for a consideration per share of less than the
average of the 5 VWAPs of the Common Stock immediately prior
to the execution of definitive documentation as to such
transaction or the closing of such transaction, whichever is
greater (the "Market Price"), or for no consideration (such
issuances collectively, a "Dilutive Issuance"), then, the
Exercise Price shall be multiplied by the fraction calculated
as follows: ((i) the sum of (a) the total number of shares of
Common Stock outstanding immediately prior to such issuance or
sale (excluding treasury shares, if any), plus (b) the number
of shares of Common Stock which the consideration, if any,
received by the Company upon such issuance or sale would
purchase at the Market Price) divided by (ii) the total number
of shares of Common Stock outstanding immediately after such
issuance or sale (excluding treasury shares, if any),
provided, however, that it is acknowledged and agreed that
this provision shall only have the effect of reducing the
Exercise Price of the Warrant. Such adjustment shall be made
whenever such shares of Common Stock or Capital Shares
Equivalent are issued as a Dilutive Issuance, without
duplication.
(ii) Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under
Section 11(b) hereof, the following will be applicable:
(A) Issuance of Rights or Options. If the
Company in any manner issues or grants any warrants,
rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common
Stock or Capital Shares Equivalent (such warrants,
rights and options to purchase Common Stock or
Capital Shares Equivalent are hereinafter referred to
as "Options") and the effective price per share for
which Common Stock is issuable upon the exercise of
such Options is less than the Exercise Price ("Below
Base Price Options"), then the maximum total number
of shares of Common Stock issuable upon the exercise
of all such Below Base Price Options (assuming full
exercise, conversion or exchange of Capital Shares
Equivalent, if applicable) will, as of the date of
the issuance or grant of such Below Base Price
Options, be deemed to be outstanding and to have been
issued and sold by the Company for such price per
share and the
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maximum consideration payable to the Company upon
such exercise (assuming full exercise, conversion or
exchange of Capital Shares Equivalent, if applicable)
will be deemed to have been received by the Company.
For purposes of the preceding sentence, the
"effective price per share for which Common Stock is
issuable upon the exercise of such Below Base Price
Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Company
as consideration for the issuance or granting of all
such Below Base Price Options, plus the minimum
aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of all such
Below Base Price Options, plus, in the case of
Capital Shares Equivalent issuable upon the exercise
of such Below Base Price Options, the minimum
aggregate amount of additional consideration payable
upon the exercise, conversion or exchange thereof at
the time such Capital Shares Equivalent first become
exercisable, convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock
issuable upon the exercise of all such Below Base
Price Options (assuming full conversion of Capital
Shares Equivalent, if applicable). No further
adjustment to the Exercise Price will be made upon
the actual issuance of such Common Stock upon the
exercise of such Below Base Price Options or upon the
exercise, conversion or exchange of Capital Shares
Equivalent issuable upon exercise of such Below Base
Price Options. Notwithstanding the foregoing, to the
extent the shares of Common Stock (or securities
convertible into or exchangeable for shares of Common
Stock) are not delivered, upon 5 Trading Days prior
written notice to the Holder, the Exercise Price
shall be readjusted after the expiration of such
rights, options, or warrants (but only with respect
to Warrants exercised after such expiration), to the
Exercise Price which would then be in effect had the
adjustments made upon the issuance of such rights,
options or warrants been made upon the basis of
delivery of only the number of shares of Common Stock
(or securities convertible into or exchangeable for
such shares of Common Stock) actually issued. In case
any subscription price may be paid in a consideration
part or all of which shall be in a form other than
cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive
absent manifest error.
(B) Issuance of Capital Shares
Equivalent. If the Company in any manner issues or
sells any Capital Shares Equivalent, whether or not
immediately convertible (other than where the same
are issuable upon the exercise of Options) and the
effective price per share for which Common Stock is
issuable upon such exercise, conversion or exchange
of such Capital Share Equivalents is less than the
Exercise Price, then the maximum total number of
shares of Common Stock issuable upon the exercise,
conversion or exchange of all such Capital Shares
Equivalent will, as of the date of the issuance of
such Capital Shares Equivalent, be
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deemed to be outstanding and to have been issued and
sold by the Company for such price per share and the
maximum consideration payable to the Company upon
such exercise (assuming full exercise, conversion or
exchange of Capital Shares Equivalent, if applicable)
will be deemed to have been received by the Company.
For the purposes of the preceding sentence, the
"effective price per share for which Common Stock is
issuable upon such exercise, conversion or exchange"
is determined by dividing (i) the total amount, if
any, received or receivable by the Company as
consideration for the issuance or sale of all such
Capital Shares Equivalent, plus the minimum aggregate
amount of additional consideration, if any, payable
to the Company upon the exercise, conversion or
exchange thereof at the time such Capital Shares
Equivalent first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the exercise,
conversion or exchange of all such Capital Shares
Equivalent. No further adjustment to the Exercise
Price will be made upon the actual issuance of such
Common Stock upon exercise, conversion or exchange of
such Capital Shares Equivalent. Notwithstanding the
foregoing, to the extent the shares of Common Stock
(or securities convertible into or exchangeable for
shares of Common Stock) are not delivered, upon 5
Trading Days prior written notice to the Holder, the
Exercise Price shall be readjusted after the
expiration of such rights, options, or warrants (but
only with respect to Warrants exercised after such
expiration), to the Exercise Price which would then
be in effect had the adjustments made upon the
issuance of such rights, options or warrants been
made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible
into or exchangeable for such shares of Common Stock)
actually issued. In case any subscription price may
be paid in a consideration part or all of which shall
be in a form other than cash, the value of such
consideration shall be as determined in good faith by
the Board of Directors of the Company, whose
determination shall be conclusive absent manifest
error.
(C) Change in Option Price or
Conversion Rate. If there is a change at any time in
(i) the amount of additional consideration payable to
the Company upon the exercise of any Options; (ii)
the amount of additional consideration, if any,
payable to the Company upon the exercise, conversion
or exchange of any Capital Shares Equivalent; or
(iii) the rate at which any Capital Shares Equivalent
are convertible into or exchangeable for Common Stock
(in each such case, other than under or by reason of
provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change
will be readjusted to the Exercise Price which would
have been in effect at such time had such Options or
Capital Shares Equivalent still outstanding provided
for such changed additional consideration or changed
conversion rate, as the case may be, at the time
initially granted, issued or sold. Notwithstanding
the foregoing,
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to the extent the shares of Common Stock (or
securities convertible into or exchangeable for
shares of Common Stock) are not delivered, upon 5
Trading Days prior written notice to the Holder, the
Exercise Price shall be readjusted after the
expiration of such rights, options, or warrants (but
only with respect to Warrants exercised after such
expiration), to the Exercise Price which would then
be in effect had the adjustments made upon the
issuance of such rights, options or warrants been
made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible
into or exchangeable for such shares of Common Stock)
actually issued. In case any subscription price may
be paid in a consideration part or all of which shall
be in a form other than cash, the value of such
consideration shall be as determined in good faith by
the Board of Directors of the Company, whose
determination shall be conclusive absent manifest
error.
(D) Calculation of Consideration
Received. If any Common Stock, Options or Capital
Shares Equivalent are issued, granted or sold for
cash, the consideration received therefor for
purposes of this Warrant will be the amount received
by the Company therefor, before deduction of
reasonable commissions, underwriting discounts or
allowances or other reasonable expenses paid or
incurred by the Company in connection with such
issuance, grant or sale. In case any Common Stock,
Options or Capital Shares Equivalent are issued or
sold for a consideration part or all of which shall
be other than cash, the amount of the consideration
other than cash received by the Company will be the
fair market value of such consideration, except where
such consideration consists of securities, in which
case the amount of consideration received by the
Company will be the fair market value (the mean
between the closing bid and asked prices, if traded
on any market) thereof as of the date of receipt. In
case any Common Stock, Options or Capital Shares
Equivalent are issued in connection with any merger
or consolidation in which the Company is the
surviving corporation, the amount of consideration
therefor will be deemed to be the fair market value
of such portion of the net assets and business of the
non-surviving corporation as is attributable to such
Common Stock, Options or Capital Shares Equivalent,
as the case may be. The fair market value of any
consideration other than cash or securities will be
determined in good faith by the Board of Directors of
the Company.
(E) Exceptions to Adjustment of
Exercise Price. Notwithstanding the foregoing, no
adjustment will be made under this Section 11(b) in
respect of (1) the granting or issuance of shares of
Common Stock or options (or exercise thereof) to or
by employees, officers, directors or consultants
(provided that in the case of consultants, such
issuance of Capital Shares and grants of Capital
Share Equivalents does not exceed, in the aggregate,
200,000 Capital Shares or Capital
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Shares Equivalents convertible into or exchangeable
for 200,000 Capital Shares per any 12 month period)
of the Company or any Subsidiary pursuant to any
stock option plan or employee incentive plan or
agreement duly adopted or approved by a majority of
the non-employee members of the Board of Directors of
the Company or a majority of the members of a
committee of non-employee directors established for
such purpose, or (2) the exercise of a Debenture or
any other security issued by the Company in
connection with the offer and sale of this Company's
securities pursuant to the Purchase Agreement, (3)
the issuance of any Common Stock as payment of
interest or principal with respect to any Debenture,
or (4) the exercise of or conversion of any Capital
Shares Equivalent, Options, rights or warrants issued
and outstanding on the Closing Date, provided that
the securities have not been amended in order to
reduce the exercise or conversion price thereof or
increase the number of shares issuable thereunder,
since the date of the Purchase Agreement except as a
result of the Purchase Agreement, or (5) issuances of
Capital Shares or Capital Share Equivalents in
connection with acquisitions, mergers, joint
ventures, strategic investments, or strategic
partnering arrangements the primary purpose of which
is not to raise capital, or the subsequent exercise
of any such Capital Share Equivalents.
(iii) Minimum Adjustment of Exercise Price. No
adjustment of the Exercise Price shall be made in an amount of
less than 1% 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.
12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets.
(a) In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or
where there is a change in, or distribution with respect to, the Common
Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another
corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of all or
substantially all of its assets, shares of common stock of the
successor or acquiring corporation, or any cash, shares of stock or
other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in
lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of
Common Stock of the Company, then the Holder shall have the right
thereafter to receive upon exercise of this Warrant, the number of
shares of common stock of the successor or acquiring corporation or of
the Company, if it is the surviving corporation, and Other Property
receivable upon or as a
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result of such reorganization, reclassification, merger, consolidation
or disposition of assets by Holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such
event. In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) shall expressly assume the due
and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company
and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith
by resolution of the Board of Directors of the Company) in order to
provide for adjustments of Warrant Shares for which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 12. For purposes of this
Section 12, "common stock of the successor or acquiring corporation"
shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of
such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or
the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
(b) Notwithstanding anything to the contrary herein contained,
in the event of a transaction contemplated by Section 12(a) or similar
transaction in which the surviving, continuing, successor, or
purchasing person, corporation or entity demands that all outstanding
Warrants be extinguished prior to the closing date of the contemplated
transaction, the Company shall give prior notice (the "Merger Notice")
thereof to the Holders advising them of such transaction. The Holders
shall have ten calendar days after the date of the Merger Notice to
elect to (i) exercise the Warrants in the manner provided herein, (ii)
receive from the surviving, continuing, successor, or purchasing
corporation the same consideration receivable by a holder of the number
of shares of Common Stock for which this Warrant might have been
exercised immediately prior to such consolidation, merger, sale, or
purchase reduced by such amount of the consideration as has a market
value equal to the Exercise Price, as determined by the Board of
Directors of the Company, whose determination shall be conclusive and
binding, or (iii) receive cash equal to the value of this Warrant as
determined in accordance with the Black-Scholes option pricing formula
using the method agreed upon among the parties at the Closing. If any
Holder fails to timely notify the Company of its election, the Holder
shall be deemed for all purposes to have elected the option set forth
in (ii) above. Any amounts receivable by a Holder who has elected the
option set forth in (ii) above shall be payable at the same time as
amounts payable to stockholders in connection with any such
transactions.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
11
14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
15. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or
other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the
Company or any consolidation or merger of the Company with, or any
sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation;
or,
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Xxxxxx appearing on the books of the Company and delivered in
accordance with Section 17(d).
16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.
12
Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately prior to such increase in par value, (b)
take all such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
17. Miscellaneous.
(a) Governing Law; Venue; Waiver of Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether
brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New
York, borough of Manhattan (the "New York Courts"). Each party hereby
irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, or that the New York Courts are
an improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for
notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. The parties hereto
hereby irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising
out of or relating to this Warrant or the transactions contemplated
thereby. If either party shall commence an action or proceeding to
enforce any provisions of this Warrant, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for
its attorneys' fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.
13
(b) Restrictions. The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale imposed by state and federal
securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice Xxxxxx's
rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date.
(d) Notices. Any and all notices or other communications or
deliveries to be provided by the Holder hereunder, including any Notice
of Exercise, shall be in writing and delivered personally, by
facsimile, sent by a nationally recognized overnight courier service,
addressed to the Company, at the address set forth above, facsimile
number (000) 000-0000, Attn: Chief Financial Officer or such other
addresses or facsimile numbers as the Company may specify for such
purposes by notice to the Holder delivered in accordance with this
Section 17(d), with copies thereof (which copies shall be required to
be delivered for such notice to be effective) to each of (1) Xxxxxxxx
Xxxxxx Xxxxxx & Xxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000-0000, Attention: Xxxxxxx X. Xxxxxxx, Esq., facsimile number (212)
833-1250, and Global Interactive Gaming Ltd., Centre Point Tower, 000
Xxx Xxxxxx Xxxxxx, Xxxxxx XX0X 000, Attention: X. Xxxxxxxxx, facsimile
number x00-000-000-0000. Any and all notices or other communications or
deliveries to be provided by the Company hereunder shall be in writing
and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service addressed to Holder at the facsimile
telephone number or address of Holder appearing on the books of the
Company, or if no such facsimile telephone number or address appears,
at the principal place of business of Holder. Any notice or other
communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:30 p.m. (New York
City time) on a Trading Day and an electronic confirmation of delivery
is received by the sender, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section
on a day that is not a Trading Day or later than 5:30 p.m. (New York
City time) on any Trading Day, (iii) three Trading Days following the
date of mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and
communications are those set forth on the signature pages hereof, or
such other address as may be designated in writing hereafter, in the
same manner, by such Person.
14
(e) Limitation of Liability. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant or
purchase Warrant Shares, and no enumeration herein of the rights or
privileges of Holder, shall give rise to any liability of Holder for
the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by
creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Warrant.
The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be
adequate.
(g) Successors and Assigns. Subject to applicable securities
laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the
Company and the successors and permitted assigns of Holder; provided,
however, that the Holder may not assign its rights to a competitor or
potential competitor of the Company. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this
Warrant and shall be enforceable by any such Holder or holder of
Warrant Shares.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and
the Holder.
(i) Severability. If any provision of this Warrant is held to
be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant
shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Warrant.
(j) Construction. The headings herein are for convenience
only, do not constitute a part of this Warrant and shall not be deemed
to limit or affect any of the provisions hereof. The language used in
this Warrant will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will
be applied against any party.
(k) Interpretation. Unless the context otherwise requires, the
terms defined in this Section 17 shall have the meanings herein
specified for all purposes of this Warrant, applicable to both the
singular and plural forms of any of the terms defined herein. When a
reference is made in this Warrant to a Section, such reference shall be
to a Section of this Warrant unless otherwise indicated. Whenever the
words "include," "includes" or "including" are used in this Warrant,
they shall be deemed to be followed by the words "without limitation."
The use of any gender herein shall be deemed to include the neuter,
masculine and feminine genders wherever necessary or appropriate. When
any matter is disclosed (a) in any Transaction Document (including any
exhibit or schedule thereto), (b) any place in the Disclosure Schedule,
or (c) in the Company's Form 10-KSB for the year ended September 30,
2002, the Proxy Statement for the 2003 Annual Meeting of Shareholders,
the Forms 10-QSB for the quarters ended December 31, 2002, March 31,
2003 or June 20, 2003, or any press releases issued after the filing of
the Form 10-QSB for the quarter ended June 30, 2003 and prior to the
Closing Date, such matter shall be deemed to have been disclosed to the
Holders for all purposes pursuant to the Warrant. If any period of time
for the performance under the Warrant ends on a day that is not a
Trading Day, such period of time shall be automatically extended to end
at the end of the next succeeding Trading Day.
********************
15
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated: November 24, 2003
INTERACTIVE SYSTEMS WORLDWIDE INC.
By:________________________________
Name: XXXXXXX XXXXXXXX
Title: PRESIDENT
16
NOTICE OF EXERCISE
To: INTERACTIVE SYSTEMS WORLDWIDE INC.
(1) The undersigned hereby elects to purchase ________ Warrant
Shares of Interactive Systems Worldwide Inc. pursuant to the terms of the
attached Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in subsection 3(a), to
exercise this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in subsection
3(a).
(3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
__________________________________
The Warrant Shares shall be delivered to the following:
__________________________________
__________________________________
__________________________________
(4) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[PURCHASER]
By: ______________________________
Name:
Title:
Dated: ___________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
___________________________________________________________________________.
_______________________________________________________________________________
Dated: ______________, _______
Holder's Signature: ________________________________
Holder's Address:___________________________________
___________________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
EXHIBIT A
The undersigned hereby represents and warrants to, and agrees with, the
Company as follows:
(a) The undersigned is an "Accredited Investor" as that term is defined
in Section (a) of Regulation D promulgated under the Securities Act.
Specifically, the undersigned is (initial appropriate items(s)):
_____ (i) A bank as defined in Section 3(a)(2) of the Securities Act,
or a savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the Exchange
Act; an insurance company as defined in Section 2(13) of the Securities Act; an
investment company registered under the Investment Company Act of 1940 (the
"Investment Company Act") or a business development company as defined in
Section 2(a)(48) of the Investment Company Act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; a plan established and
maintained by a state, its political subdivisions or any agency or
instrumentality of a state or its political subdivisions for the benefit of its
employees, if such plan has total assets in excess of $5,000,000; an employee
benefit plan within the meaning of the Employee Retirement Income Security Act
of 1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings and loan
association, insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors.
_____ (ii) A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
_____ (iii) An organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
_____ (iv) A director or executive officer of the Company.
_____ (v) A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his or her purchase exceeds
$1,000,000.
_____ (vi) A natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year.
_____ (vii) A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) (i.e., a person who has such knowledge and experience in financial
and business matters that he is capable of evaluating the merits and risks of
the prospective investment).
_____ (viii) An entity in which all of the equity owners are accredited
investors.
(b) For California and Massachusetts individuals: If the subscriber is
a California resident, such subscriber's investment in the Company will not
exceed 10% of such subscriber's net worth (or joint net worth with his spouse).
If the subscriber is a Massachusetts resident, such subscriber's investment in
the Company will not exceed 25% of such subscriber's joint net worth with his
spouse (exclusive of principal residence and its furnishings).
(c) If a natural person, the undersigned is: a bona fide resident of
the State contained in the address set forth on the signature page of this
Agreement as the undersigned's home address; at least 21 years of age; and
legally competent to execute this Agreement. If an entity, the undersigned is
duly authorized to execute this Agreement and this Agreement constitutes the
legal, valid and binding obligation of the undersigned enforceable against the
undersigned in accordance with its terms.
(d) The undersigned is familiar with the Company's business, plans and
financial condition, the undersigned has received all materials which have been
requested by the undersigned; has had a reasonable opportunity to ask questions
of the Company and its representatives; and the Company has answered all
inquiries that the undersigned or the undersigned's representatives have put to
it. The undersigned has had access to all additional information and has taken
all the steps necessary to evaluate the merits and risks of an investment as
proposed hereunder.
(e) The undersigned has such knowledge and experience in finance,
securities, investments and other business matters so as to be able to protect
the interests of the undersigned in connection with this transaction, and the
undersigned's investment in the Company hereunder is not material when compared
to the undersigned's total financial capacity.
(f) The undersigned understands the various risks of an investment in
the Company as proposed herein and can afford to bear such risks, including,
without limitation, the risks of losing the entire investment.
(g) The undersigned acknowledges that no market for the Warrants
presently exists and none may develop in the future and that the undersigned may
find it impossible to liquidate the investment at a time when it may be
desirable to do so, or at any other time.
(h) The undersigned has been advised by the Company that none of the
Warrants have been registered under the Securities Act, that the Warrants will
be issued on the basis of the statutory exemption provided by Section 4(2) of
the Securities Act or Regulation D promulgated thereunder, or both, relating to
transactions by an issuer not involving any public offering and under similar
exemptions under certain state securities laws, that this transaction has not
been reviewed by, passed on or submitted to any Federal or state agency or
self-regulatory organization where an exemption is being relied upon, and that
the Company's reliance thereon is based in part upon the representations made by
the undersigned in this Agreement. The undersigned acknowledges that the
undersigned has been informed by the Company of, or is otherwise familiar with,
the nature of the limitations imposed by the Securities Act and the rules and
regulations thereunder on the transfer of securities, including the Warrants. In
particular, the undersigned agrees that no sale, assignment or transfer of any
of the Warrants shall be valid or effective, and the Company shall not be
required to give any effect to such a sale, assignment or transfer, unless (i)
the sale, assignment or transfer of such Warrants is registered under the
Securities Act, it being understood that the Warrants are not currently
registered for sale and that the Company has no obligation or intention to so
register the Warrants except as contemplated by the terms of the Warrants, or
(ii) such Warrants are sold, assigned or transferred in accordance with all the
requirements and limitations of Rule 144 under the Act, it being understood that
Rule 144 is not available at the present time for the sale of the Securities, or
(iii) such sale, assignment or transfer is otherwise exempt from registration
under the Securities Act. The undersigned further understands that an opinion of
counsel and other documents may be required to transfer the securities as
provided in the Warrants. The undersigned acknowledges that the Warrants shall
be subject to a stop transfer order and the certificate or certificates
evidencing any Warrants shall bear the following or a substantially similar
legend or such other legend as may appear on the forms of Warrants and such
other legends as may be required by state securities or blue sky laws:
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS
SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES, BUT ANY PLEDGEE SHALL BE SUBJECT TO THE
REQUIREMENTS SET FORTH IN THIS WARRANT AS A HOLDER.
(i) The undersigned will acquire the Warrants for the undersigned's own
account for investment and not with a view to the sale or distribution thereof
or the granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting any
participation therein.
____________________________________________
Name:
