1
EXHIBIT 4.1
FORM OF
COMMON STOCK PURCHASE WARRANT
THIS WARRANT AND THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES LAWS, HAVE BEEN
TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR SALE OR
TRANSFER UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND OTHER APPLICABLE
SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES IS THEN IN EFFECT, OR IN THE
OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER OF
THESE SECURITIES), SUCH REGISTRATION UNDER SUCH ACT AND OTHER APPLICABLE
SECURITIES LAWS IS NOT REQUIRED.
Warrant Certificate Warrant to Purchase
***_________*** ***________***
Number Shares
INTELECT COMMUNICATIONS, INC.
(Incorporated under the laws of the State of Delaware)
WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF
THE $.01 PAR VALUE COMMON STOCK OF INTELECT COMMUNICATIONS, INC.
Warrant Price: $2.50 per share subject to adjustment as provided below.
THIS IS TO CERTIFY that, for value received, ***________________*** or its
registered assigns (either or both of whom are referred to herein as the
"Holder"), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, up to ***______*** shares of the $.01 par value common
stock ("Common Stock") of Intelect Communications, Inc., a Delaware corporation
(the "Company"), and to receive certificate(s) for the Common Stock so
purchased.
1. Exercise Period and Vesting. This Warrant is issued by the Company
pursuant to that certain Subscription Agreement between the Company and Holder
(the "Agreement"). The "Exercise Period" is the period beginning on the date of
this Warrant (the "Issuance Date") and ending at 5:00 p.m., Dallas, Texas time,
on January ___, 2003. This Warrant will terminate automatically and immediately
upon the expiration of the Exercise Period.
2. Exercise of Warrant. This Warrant may be exercised, in whole or in part,
at any time and from time to time during the Exercise Period. Such exercise
shall be accomplished by tender to the Company of the purchase price set forth
above as the warrant price (the "Warrant Price"), in cash or by certified check
or bank cashier's check, payable to the order of the Company, together with
presentation and surrender to the Company of this Warrant Certificate with an
executed subscription in substantially the form attached hereto as Exhibit A.
Upon receipt of the foregoing, the Company will deliver to the Holder, as
promptly as possible, a certificate or certificates representing the shares of
Common Stock so purchased, registered in the name of the Holder or its designee.
With respect to any exercise of this Warrant, the Holder will for all purposes
be deemed to have become the holder of record of the number of shares of Common
Stock purchased hereunder on the date this Warrant and payment of the Warrant
Price is received by the Company (the "Exercise Date"), irrespective of the date
of delivery of the certificate evidencing such shares, except that, if the date
of such receipt is a date on which the stock transfer books of the Company are
closed, such person will be deemed to have become the holder of such shares at
the close of
1
2
business on the next succeeding date on which the stock transfer books are open.
Fractional shares of Common Stock will not be issued upon the exercise of this
Warrant. In lieu of any fractional shares that would have been issued but for
the immediately preceding sentence, the Holder will be entitled to receive cash
equal to the current market price of such fraction of a share of Common Stock on
the trading day immediately preceding the Exercise Date. In the event this
Warrant is exercised in part, the Company shall issue a new Warrant Certificate
to the Holder covering the aggregate number of shares of Common Stock as to
which this Warrant remains exercisable.
3. Transferability and Exchange. (a) This Warrant and the Common Stock
issuable upon the exercise hereof may not be sold, transferred, pledged or
hypothecated, without the prior written consent of the Company, and in the event
of any such transfer, pledge or hypothecation,the Company shall have been
provided with an opinion of counsel (which may or may not be counsel for the
Company), or other evidence reasonably satisfactory to it, that such transfer is
not in violation of the Securities Act, and any applicable state securities
laws. Subject to the satisfaction of the aforesaid conditions, this Warrant and
such shares of Common Stock shall be transferable from time to time by the
Holder upon written notice to the Company. If this Warrant is transferred, in
whole or in part, upon surrender of this Warrant to the Company, the Company
shall deliver to each transferee a Warrant evidencing the rights of such
transferee to purchase the number of shares of Common Stock that such transferee
is entitled to purchase pursuant to such transfer. The Company may place a
legend on this Warrant or any replacement Warrant and on each certificate
representing shares issuable upon exercise of this Warrant as to which the
Company has not been provided evidence that the transfer of such security would
not be in violation of the Securities Act and any applicable state securities
laws. Only a registered Holder may enforce the provisions of this Warrant
against the Company. A transferee of the original registered Holder becomes a
registered Holder only upon delivery to the Company of the original Warrant and
an original Assignment, substantially in the form set forth in Exhibit B
attached hereto.
(b) This Warrant is exchangeable upon its surrender by the Holder to the
Company for new Warrants of like tenor and date representing in the aggregate
the right to purchase the number of shares purchasable hereunder, each of such
new Warrants to represent the right to purchase such number of shares as may be
designated by the Holder at the time of such surrender.
(c) The holder of this Warrant understands that this Warrant has not been
and is not expected to be, registered under the Securities Act or any state
securities laws, and, assuming the consent of the Company is obtained pursuant
to Section 3(1) hereof, may not be offered for sale, sold, assigned or
transferred unless (a) subsequently registered thereunder, or (b) such holder
shall have delivered to the Company an opinion of counsel, from counsel and in
form reasonably acceptable to the Company, to the effect that the securities to
be sold, assigned or transferred may be sold, assigned or transferred pursuant
to an exemption from such registration all shares purchasable upon excise of the
Warrant and to all resales or other transfers thereof pursuant to the Securities
Act.
4. Adjustments to Warrant Price. The Warrant Price and, to the extent
specifically provided, the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4. For the purpose of
this Section 4, the following terms shall have the following meanings:
(i) "Common Stock" shall mean the Company's common stock, par
value $0.01 per share, and any capital stock into which such Common Stock shall
have been changed or any capital stock resulting from a reclassification of such
Common Stock.
(ii) "Approved Stock Plan" shall mean any plan which has been
approved by the Board of Directors of the Company, pursuant to which the
Company's securities may be issued to any employee, officer, director,
consultant or other service provider for services provided to the Company.
(iii) "Other Securities" means (i) those rights, warrants,
options or convertible securities of the Company issued prior to, and
outstanding on, the date of issuance of this Warrant, or Common Stock issued or
issuable upon the exercise or conversion of such rights, warrants, options or
convertible securities, (ii) the Common Stock issued pursuant to this Agreement
or the Warrant or other warrants issued pursuant to the Agreement or shares
issuable upon exercise of the Warrant or such other warrants and any shares
issued or issuable (or deemed issued or issuable) by virtue of the operation of
the
2
3
antidilution provisions or Reset Price of the Warrant or other warrants issued
pursuant to the Agreement, (iii) securities issued or issuable pursuant to
transactions arranged by or pursuant to which Stonegate Securities or its
affiliates acted as placement agent, finder, intermediary, underwriter, or
broker, or (iv) securities issued or issuable to The Coastal Corporation Second
Pension Trust.
(a) In the event that on the 180th day following the Issuance Date (the
"Reset Date") the average closing bid price for the Common Stock during the
twenty consecutive trading day period immediately prior to the Reset Date (the
"Reset Price") is less than the Warrant Price, then the Warrant Price shall then
be adjusted to equal the Reset Price.
(b) In case the Company shall (i) pay a dividend or make a distribution in
shares of Common Stock or other securities, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issue by reclassification of its shares of Common Stock other securities of the
Company, then the Warrant Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, or the number and kind of securities issuable on such date,
shall be proportionately adjusted so that the Holder of any Warrant thereafter
exercised shall be entitled to receive the aggregate number and kind of shares
of Common Stock (or such other securities other than Common Stock) of the
Company that, if such Warrant had been exercised immediately prior to such date,
the Holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(c) In case the Company shall issue or sell any shares of Common Stock to
all of its existing stockholders for a consideration per share less than the
current market price per share of Common Stock on the date of such issue or
sale, except for securities issued or issuable (or deemed issued or issuable) in
connection with an Approved Stock Plan or for Other Securities, then in each
such case the Warrant Price shall forthwith be adjusted to equal the then
current Warrant Price times the quotient obtained by dividing (i) the sum of (x)
the number of shares of Common Stock outstanding immediately prior to such issue
or sale, plus (y) the consideration, if any, received by the Company upon such
issue or sale, divided by the current market price per share of Common Stock on
the date of such issue or sale, by (ii) the number of shares of Common Stock
outstanding immediately after such issue or sale.
In any determination of an adjusted Warrant Price, (i) the number of shares
of Common Stock outstanding at any given time shall exclude shares in the
treasury of the Company and shall include shares issuable in respect of script
certificates issued in lieu of fractions of shares of Common Stock, (ii) in the
case of the issue of shares of Common Stock for cash, the consideration received
by the Company therefor shall be deemed to be the amount of cash received by the
Company for such shares, without deduction of the costs, expenses, fees and
commissions incidental to the issue and sale thereof, and (iii) in the case of
the issue of shares of Common Stock for a consideration in whole or in part
other than cash, the consideration received by the Company therefor shall be
deemed to be the fair value to the Company of such consideration as determined
in good faith by, and reflected in a formal resolution of, the Board of
Directors of the Company.
In case of the issuance by the Company of any security that is convertible
into shares of Common Stock at a price less than the current market price per
share of Common Stock on the date of such issuance, or of any rights, warrants
or options to purchase shares of Common Stock at a price less than the current
market price per share of Common Stock on the date of such issuance, (i) the
Company shall be deemed to have issued the maximum number of shares of Common
Stock deliverable upon the exercise of such conversion privileges or rights,
warrants or options, and (ii) the consideration therefor shall be deemed to be
(A) the consideration actually received by the Company for the issuance of such
convertible securities, rights, warrants or options, as the case may be, without
deduction of the costs, expenses, fees and commissions incidental to the issue
and sale thereof, plus (B) the additional minimum consideration, if any, to be
received by the Company in connection with such conversion or upon the exercise
of such rights, warrants or options. No further adjustment of the Warrant Price
shall be made as a result of the actual issuance of the shares of Common Stock
referred to in this paragraph. Upon the expiration of such rights, warrants or
options, or the termination of such privilege to convert, the Warrant Price and
the number of shares of Common Stock purchasable upon exercise of this Warrant
shall be readjusted to such Warrant
3
4
Price and such number of shares of Common Stock as would have pertained had the
adjustments made upon the issuance of such rights, warrants, options or
convertible securities been made upon the basis of the issuance of only the
number of shares of Common Stock actually delivered upon the exercise of such
rights, warrants or options or upon the conversion of such securities.
(d) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
surviving corporation) of cash, evidences of indebtedness or assets, or
subscription rights or warrants (excluding those referred to in subsection (b)
above), the Warrant Price to be in effect after such record date shall be
determined by multiplying the Warrant Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price per share of Common Stock on such record date, less the amount of cash so
to be distributed (or the fair market value (as determined in good faith by, and
reflected in a formal resolution of, the Board of Directors of the Company) of
the portion of the assets or evidences of indebtedness so to be distributed, or
of such subscription rights or warrants, applicable to one share of Common
Stock, and the denominator of which shall be such current market price per share
of Common Stock. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Warrant Price shall again be adjusted to be the Warrant Price which would
then be in effect if such record date had not been fixed.
(e) For the purpose of any computation under any subsection of this Section
4, the "current market price" per share of Common Stock on any date shall be the
per share price of the Common Stock on the trading day immediately prior to the
event requiring an adjustment hereunder and shall be: (i) if the principal
trading market for such securities is a national or regional securities
exchange, the closing price on such exchange on such day; or (ii) if sales
prices for shares of Common Stock are reported by the Nasdaq National Market
System or Nasdaq Small Cap Market (or a similar system then in use), the last
reported sales price so reported on such day; or (iii) if neither (i) nor (ii)
above are applicable, and if bid and ask prices for shares of Common Stock are
reported in the over-the-counter market by Nasdaq (or, if not so reported, by
the National Quotation Bureau), the average of the high bid and low ask prices
so reported on such day. Notwithstanding the foregoing, if there is no reported
closing price, last reported sales price, or bid and ask prices, as the case may
be, for the day in question, then the current market price shall be determined
as of the latest date prior to such day for which such closing price, last
reported sales price, or bid and ask prices, as the case may be, are available,
unless such securities have not been traded on an exchange or in the
over-the-counter market for 30 or more days immediately prior to the day in
question, in which case the current market price shall be determined in good
faith by, and reflected in a formal resolution of, the Board of Directors of the
Company.
(f) Notwithstanding any provision herein to the contrary, no adjustment in
the Warrant Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Warrant Price; provided, however,
that any adjustments which by reason of this subsection (e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4 shall be made to the nearest
cent or the nearest one-hundredth of a share, as the case may be.
(g) In the event that at any time, as a result of an adjustment made
pursuant to Section 4(b), the Holder of any Warrant thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
shares of Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares of Common Stock contained in this Section 4, and the other
provisions of this Warrant shall apply on like terms to any such other shares.
(h) If the Company merges or consolidates into or with another corporation
or entity, or if another corporation or entity merges into or with the Company
(excluding such a merger in which the Company is the surviving or continuing
corporation and which does not result in any reclassification, conversion,
exchange, or cancellation of the outstanding shares of Common Stock), or if all
or substantially all of the assets or business of the Company are sold or
transferred to another corporation, entity, or person, then, as a condition to
such consolidation, merger, or sale (a "Transaction"), lawful and adequate
provision
4
5
shall be made whereby the Holder shall have the right from and after the
Transaction to receive, upon exercise of this Warrant and upon the terms and
conditions specified herein and in lieu of the shares of the Common Stock that
would have been issuable if this Warrant had been exercised immediately before
the Transaction, such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had exercised this
Warrant immediately before the effective date of the Transaction. The Company
shall not effect any Transaction unless prior to or simultaneously with the
consummation thereof the successor corporation, entity, or person (if other than
the Company) resulting from the Transaction or purchasing assets or the business
of the Company in the Transaction shall assume by written instrument the
obligation to deliver to the Holder such shares of stock, securities, or assets
as, in accordance with the foregoing provisions, the Holder may be entitled to
receive.
(i) In case any event shall occur as to which the other provisions of this
Section 4 are not strictly applicable but the failure to make any adjustment
would not fairly protect the purchase rights represented by this Warrant in
accordance with the essential intent and principles hereof, then, in each such
case, the Company shall effect such adjustment, on a basis consistent with the
essential intent and principles established in this Section 4, as may be
necessary to preserve, without dilution, the purchase rights represented by this
Warrant.
5. Representations of Holder. The holder of this Warrant, by the acceptance
hereof, represents that it is acquiring this Warrant and the shares issuable
upon exercise of this Warrant for its own account for investment only and not
with a view towards, or for resale in connection with, the public sale or
distribution of this Warrant or the shares issuable upon exercise of this
Warrant, except pursuant to sales registered or exempted under the Securities
Act. The holder of this Warrant further represents, by acceptance hereof, that,
as of this date, such holder is an "accredited investor" as such term is defined
in Rule 501(a)(1) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act (an "Accredited Investor"). Upon exercise of
this Warrant, the holder shall confirm in writing, in a form satisfactory to the
Company, that the shares issuable upon exercise of the Warrant are being
acquired solely for the holder's own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale and
that such holder is an Accredited Investor. If such holder cannot make such
representations because they would be factually incorrect, it shall be a
condition to such holder's exercise of this Warrant that the Company receive
such other representations as the Company considers reasonably necessary to
assure the Company that the issuance of its securities upon exercise of this
Warrant shall not violate any United States or state securities laws.
6. Registration Rights. The Holder shall be entitled to the benefits of the
registration rights set forth in that certain Registration Rights Agreement by
and among the Company and the Holders of the Warrants dated January ___, 2000.
7. Reservation of Shares. The Company agrees at all times to reserve and
hold available out of the aggregate of its authorized but unissued Common Stock
the number of shares of its Common Stock issuable upon the full exercise of this
Warrant. The Company further covenants and agrees that all shares of Common
Stock that may be delivered upon the exercise of this Warrant will, upon
delivery, be fully paid and nonassessable and free from all taxes, liens and
charges with respect to the purchase thereof hereunder.
8. Notices to Holder. Upon any adjustment of the Warrant Price (or number
of shares of Common Stock purchasable upon the exercise of this Warrant)
pursuant to Section 4, the Company shall promptly thereafter cause to be given
to the Holder written notice of such adjustment. Such notice shall include the
Warrant Price (and/or the number of shares of Common Stock purchasable upon the
exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company's method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions of this Section 8.
In the event of (a) any fixing by the Company of a record date with respect
to the holders of any class of securities of the Company for the purpose of
determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, or (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or
5
6
merger of the Company with or into, any other entity or person, or (c) any
voluntary or involuntary dissolution or winding up of the Company, then and in
each such event the Company will give the Holder a written notice specifying, as
the case may be, (i) the record date for the purpose of such dividend,
distribution, or right, and stating the amount and character of such dividend,
distribution, or right; or (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger, conveyance,
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 capital
stock or securities receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock
securities) for securities or other property deliverable upon such event. Any
such notice shall be given at least 20 days prior to the earliest date therein
specified.
9. No Rights as a Stockholder. This Warrant does not entitle the Holder to
any voting rights or other rights as a stockholder of the Company, nor to any
other rights whatsoever except the rights herein set forth.
10. Additional Covenants of the Company. At such time as the Common Stock
is listed for trading on any regional or national securities exchange or Nasdaq,
the Company shall, upon issuance of any shares for which this Warrant is
exercisable, at its expense, promptly obtain and maintain the listing of such
shares.
The Company shall comply with the reporting requirements of Sections 13 and
15(d) of the Exchange Act for so long as and to the extent that such
requirements apply to the Company.
The Company shall not, by amendment of 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. Without limiting the generality of the foregoing, the Company (a) will
at all times reserve and keep available, solely for issuance and delivery upon
exercise of this Warrant, shares of Common Stock issuable from time to time upon
exercise of this Warrant, (b) will not increase the par value of any shares of
capital stock receivable upon exercise of this Warrant above the amount payable
therefor upon such exercise, and (c) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable stock.
11. Specific Performance. The Company stipulates that remedies at law, in
money damages, available to the Holder or to a holder of Common Stock issued
pursuant to the exercise of this Warrant, in the event of any default or
threatened default by the Company in the performance of or compliance with any
of the terms of this Warrant, are not and will not be adequate. Therefore, the
Company agrees that the terms of this Warrant may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
12. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Company, the Holder and their respective successors and
permitted assigns.
13. Notices. The Company agrees to maintain a ledger of the ownership of
the Warrants (the "Warrant Ledger). Any notice hereunder shall be given by
registered or certified mail if to the Company, at its principal executive
office and, if to the Holder, to its address shown in the Warrant Ledger of the
Company, provided that the Holder may at any time on three (3) days' written
notice to the Company designate or substitute another address where notice is to
be given. Notice shall be deemed given and received after a certified or
registered letter, properly addressed with postage prepaid, is deposited in the
U.S. mail.
14. Severability. Every provision of this Warrant is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Warrant.
15. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to the
principles of choice of laws thereof. Venue for any dispute arising hereunder
shall lie in the state or federal courts of Dallas County, Texas.
6
7
16. Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Warrant, the Holder, if successful, shall be entitled to
recover reasonable attorneys' fees in addition to its costs and expenses and any
other available remedy.
17. Entire Agreement. This Warrant (including the exhibits attached hereto)
constitutes the entire understanding between the Company and the Holder with
respect to the subject matter hereof, and supersedes all prior negotiations,
discussions, agreements and understandings relating to such subject matter.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer, and its corporate seal hereunto affixed.
DATED:
--------------------
INTELECT COMMUNICATIONS, INC.
By:
------------------------------
Its:
-----------------------------
7
8
Exhibit A
SUBSCRIPTION FORM
(To be Executed by the Holder to Exercise the Rights To Purchase Common
Stock Evidenced by the Within Warrant)
The undersigned hereby irrevocably subscribes for ___________ shares (the
"Stock") of the Common Stock of Intelect Communications, Inc., ("Company")
pursuant to and in accordance with the terms and conditions of the attached
Warrant, and hereby makes payment of $______________ therefor by tendering cash
or delivering a certified check or bank cashier's check, payable to the order of
the Company. The undersigned requests that a certificate for such shares be
issued in the name of the undersigned and be delivered to the undersigned at the
address stated below. If such number of shares is not all of the shares
purchasable pursuant to the attached Warrant, the undersigned requests that a
new Warrant of like tenor for the balance of the remaining shares purchasable
thereunder be delivered to the undersigned at the address stated below.
In connection with the issuance of the Stock, I hereby represent to the
Company that I am acquiring the Stock for my own account for investment and not
with a view to, or for resale in connection with, a distribution of the shares
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
I understand that because the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless such Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition.
I agree that each certificate representing the Stock delivered to me shall
bear substantially the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION,
PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
I further agree that the Company may place stop orders on the certificates
evidencing the Stock with the transfer agent, if any, to the same effect as the
above legend. The legend and stop transfer notice referred to above shall be
removed only upon my furnishing to the Company an opinion of counsel (reasonably
satisfactory to the Company) to the effect that such legend may be removed.
Date: Signed:
----------------------------- ---------------------------------
Address:
--------------------------
----------------------------------
----------------------------------
8
9
Exhibit B
ASSIGNMENT
(To be Executed by the Holder to Effect Transfer of the Within Warrant)
For Value Received __________________________ hereby sells, assigns and
transfers to _____________________________ this Warrant and the rights
represented hereby to purchase _________ shares of Common Stock in accordance
with the terms and conditions hereof, and does hereby irrevocably constitute and
appoint _____________________________ as attorney to transfer this Warrant on
the books of the Company with full power of substitution.
Date: Signed:
-------------------------- ------------------------------
Please print or typewrite name and Please insert Social Security or
address of other Tax assignee: Identification Number of Assignee:
---------------------------------- --------------------------------------
----------------------------------
----------------------------------
9
