EXHIBIT 10.11
THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ASTRATA GROUP INCORPORATED THAT SUCH REGISTRATION IS NOT
REQUIRED.
Right to Purchase ________ shares of
Common Stock of Astrata Group
Incorporated (subject to adjustment as
provided herein)
COMMON STOCK PURCHASE WARRANT
No. 2005-JAN-____ Issue Date: January 14, 2005
ASTRATA GROUP INCORPORATED, a corporation organized under the laws of the
State of Nevada (the "Company"), hereby certifies that, for value received,
____________, an individual, or his assigns (the "Holder"), is entitled, subject
to the terms set forth below, to purchase from the Company at any time after the
Issue Date up to 5:00 p.m., P.S.T., on January 14, 2007 (the "Expiration Date"),
up to _____ fully paid and non-assessable shares of the common stock of the
Company (the "Common Stock"), at a per share purchase price of $5.00. The
afore-described purchase price per share, as adjusted from time to time as
herein provided, is referred to herein as the "Purchase Price." The number and
character of such shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein. The Company may reduce the Purchase Price without
the consent of the Holder.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Astrata Group Incorporated and any
corporation which shall succeed to or assume the obligations of Astrata Group
Incorporated hereunder.
(b) The term "Common Stock" includes (i) the Company's Common Stock, as
authorized on the date hereof and (ii) any other securities into which or for
which any of the securities described in subpart (i) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets, or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) that the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 3 or otherwise.
(d) The term "Excepted Issuance" shall include any sale and issuance by the
Company of its common stock or other securities or convertible debt obligations
(i) in connection with employee stock options or compensation plans, (ii) as
full or partial consideration in connection with any merger, consolidation or
purchase of substantially all of the securities or assets of any corporation or
other entity, (iii) that may be issued to service providers who are not
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officers, directors or employees of the Company, or (iv) that may be issued to
institutional third-parties in connection with their providing debt financing
to, or on behalf of, the Company.
1. EXERCISE OF WARRANT.
1.1. NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after the Issue
Date through and including the Expiration Date, the Holder hereof shall be
entitled to receive, upon exercise of this Warrant in whole in accordance with
the terms of Subsection 1.2 or upon exercise of this Warrant in part in
accordance with Subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 3.
1.2. FULL EXERCISE. This Warrant may be exercised in full by the
Holder hereof by delivery of an original or facsimile copy of the form of
subscription attached as Exhibit A hereto (the "Subscription Form") duly
executed by such Holder and surrender of the original Warrant within seven (7)
days of exercise, to the Company at its principal office or at the office of its
Warrant Agent (as provided hereinafter), accompanied by payment, in cash, wire
transfer, or by certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price then in
effect.
1.3. PARTIAL EXERCISE. This Warrant may be exercised in part (but not
for a fractional share) by surrender of this Warrant in the manner and at the
place provided in Subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying (a) the number
of whole shares of Common Stock designated by the Holder in the Subscription
Form by (b) the Purchase Price then in effect. On any such partial exercise, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any applicable transfer
taxes) may request, the whole number of shares of Common Stock for which such
Warrant may still be exercised.
1.4. NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the Fair Market Value of one share of Common Stock is greater than
the Purchase Price at the Determination Date, in lieu of exercising this Warrant
for cash in the manner set forth in Sections 1.2 or 1.3 or in exchange for other
shares of Common Stock in the manner set forth in Section 1.5, the Holder may
elect to receive shares of Common Stock equal to the value (as determined below)
of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise and notice of such election in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:
Y (A-B)
X = -------
A
Where X = the number of shares of Common Stock to be issued to
the Holder
Y = the number of shares of Common Stock purchasable
under the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the
Warrant being canceled at the Determination Date
A = the Fair Market Value of one share of the Company's
Common Stock at the Determination Date
B = Purchase Price as of the Determination Date
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1.5. PAYMENT UTILIZING SHARES. Notwithstanding any provisions herein
to the contrary, in lieu of exercising this Warrant for cash in the manner set
forth in Sections 1.2 or 1.3 or in utilizing the net issue exercise method in
the manner set forth in Section 1.4, the Holder may elect to receive that number
of shares of Common Stock equivalent to the Fair Market Value at the
Determination Date of the aggregate number of shares of Common Stock delivered
by the Holder to the Company (in certificated form, with the Holder's signature
bearing a medallion guarantee, all in a form that will enable the Company, then
and there, to return such shares to its treasury for cancellation) in payment
for the shares of Common Stock purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the Warrant being
canceled at the Determination Date. For purposes of this Subsection 1.6, the
Determination Date shall be as of the date on which the Holder delivers the
Subscription Form and the share certificates with medallion guarantees, as
referenced below, in the manner and to the place referenced in Sections 1.2 or
1.3.
1.6. FAIR MARKET VALUE. Fair Market Value of a share of Common Stock
as of a particular date (the "Determination Date") shall mean:
(a) If the Company's Common Stock is traded on a national
exchange or on the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") National Market or the NASDAQ SmallCap Market, then the
closing or last sale price, respectively, reported for the last business day
immediately preceding the Determination Date;
(b) If the Company's Common Stock is not traded on a national
exchange or on the NASDAQ National Market or the NASDAQ SmallCap Market, but is
quoted in the over-the-counter market, then the average of the closing bid and
ask prices reported for the last business day immediately preceding the
Determination Date;
(c) Except as provided in clause (d) below, if the Company's
Common Stock is not publicly traded or quoted, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided; or
(d) If the Determination Date is the date of a liquidation,
dissolution, or winding up, or any event deemed to be a liquidation,
dissolution, or winding up pursuant to the Company's charter, then all amounts
to be payable per share to holders of the Common Stock pursuant to the charter
in the event of such liquidation, dissolution, or winding up, plus all other
amounts to be payable per share in respect of the Common Stock in liquidation
under the charter, assuming for the purposes of this clause (d) that all of the
shares of Common Stock then issuable upon exercise of all of the Warrants are
outstanding at the Determination Date.
1.7. COMPANY ACKNOWLEDGMENT. The Company will, at the time of the
exercise of the Warrant, upon the request of the Holder hereof acknowledge in
writing its continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the Holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such Holder any such rights.
1.8. TRUSTEE FOR WARRANT HOLDERS. In the event that a bank or trust
company shall have been appointed as trustee for the Holder of the Warrants
pursuant to Subsection 2.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
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entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.
1.9. DELIVERY OF STOCK CERTIFICATES, ETC. ON EXERCISE. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder hereof as the record owner of such
shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within five (5) days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder hereof, or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct in compliance with
applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and non-assessable shares of Common Stock (or
Other Securities) to which such Holder shall be entitled on such exercise, free
and clear of any liens or encumbrances, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then Fair Market Value of one full share of Common Stock,
together with any other stock or other securities and property (including cash,
where applicable) to which such Holder is entitled upon such exercise pursuant
to Section 1 or otherwise.
2. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
2.1. REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, (c) reclassify its shares of
capital stock in such a manner as would effect its Common Stock, or (d) transfer
all or substantially all of its properties or assets to any other person under
any plan or arrangement contemplating the dissolution of the Company, then, in
each such case, as a condition to the consummation of such a transaction, proper
and adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation, merger, or reclassification
or the effective date of such dissolution, as the case may be, shall receive, in
lieu of the Common Stock (or Other Securities) issuable on such exercise prior
to such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 3.
2.2. DISSOLUTION. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrants after the effective date of
such dissolution pursuant to this Section 2 to a bank or trust company (a
"Trustee") having its principal office in New York, New York, or in Los Angeles,
California, as trustee for the Holder of the Warrants, all as if such Holder had
so exercised this Warrant, immediately prior to such dissolution, all subject to
further adjustment thereafter as provided in Section 3.
2.3. CONTINUATION OF TERMS. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 2, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other
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Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 3. In the event this Warrant does not continue in full force
and effect after the consummation of the transaction described in this Section
2, then only in such event will the Company's securities and property (including
cash, where applicable) receivable by the Holder of the Warrants be delivered to
the Trustee as contemplated by Section 2.2.
2.4 SHARE ISSUANCE. If, on or before the Expiration Date of this
Warrant and prior to the complete exercise hereof, the Company shall issue any
shares of Common Stock (except for Excepted Issuances) for a consideration less
than the Purchase Price in effect at the time of such issuance, then, and
thereafter successively upon each such issuance, the Purchase Price shall be
reduced as follows: (i) the number of shares of Common Stock outstanding
immediately prior to such issuance shall be multiplied by the Purchase Price in
effect at the time of such issuance and the product shall be added to the
aggregate consideration, if any, received by the Company upon such issuance of
additional shares of Common Stock; and (ii) the sum so obtained shall be divided
by the number of shares of Common Stock outstanding immediately after such
issuance. The resulting quotient shall be the adjusted Purchase Price. For
purposes of this adjustment, the issuance of any security of the Company
carrying the right to convert such security into shares of Common Stock or of
any warrant, right, or option to purchase Common Stock shall result in an
adjustment to the Purchase Price upon the issuance of security, whether or not
the underlying shares of Common Stock have been issued due to the exercise of
such conversion or purchase rights; PROVIDED, HOWEVER, that, upon the expiration
of any such conversion or purchase rights that were not so exercised, the
Purchase Price then in effect shall be equitably increased (in the same manner
as was previously utilized) by an amount to reflect such lack of exercise.
3. EXTRAORDINARY EVENTS REGARDING COMMON STOCK. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 3.
The number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 3) be issuable on such exercise by a fraction of which (a) the numerator
is the Purchase Price that would otherwise (but for the provisions of this
Section 3) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise. The Company will use commercially reasonable
efforts to provide notice of any such extraordinary event not less than ten (10)
days prior to effective date of such event.
4. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
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statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant and any
Warrant Agent of the Company (appointed pursuant to Section 9 hereof).
5. RESERVATION OF STOCK, ETC. ISSUABLE ON EXERCISE OF WARRANT. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.
6. ASSIGNMENT; EXCHANGE OF WARRANT. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the "Transferor Endorsement Form") and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company at its expense, twice, only, but with payment by the Transferor of any
applicable transfer taxes, will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor. No such transfers shall result
in a public distribution of the Warrant.
7. REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction, or mutilation of this Warrant
and, in the case of any such loss, theft, or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
8. REGISTRATION RIGHTS. The Holder of this Warrant has been granted certain
registration rights by the Company, as set forth in the Registration Rights
Agreement, the terms of which are incorporated herein by this reference.
9. WARRANT AGENT. The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a "Warrant Agent") for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to Section
1, exchanging this Warrant pursuant to Section 6, and replacing this Warrant
pursuant to Section 7, or any of the foregoing, and thereafter any such
issuance, exchange, or replacement, as the case may be, shall be made at such
office by such Warrant Agent.
10. TRANSFER ON THE COMPANY'S BOOKS. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
11. NOTICES. Any notice required or permitted under this Warrant shall be
given in writing and shall be deemed effectively given upon personal delivery to
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the party to be notified or by telex or confirmed facsimile, or one delivery day
after deposit with a recognized overnight express delivery service or courier
(for next day delivery), and addressed to the party to be notified at the
address indicated for such party below, or at such other address as such party
may designate by ten days' advance written notice to the other party: (a) If to
the Company: Astrata Group Incorporated 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000 Xxx
Xxxxxxx, Xxxxxxxxxx 00000-0000 Attention: Chief Financial Officer Facsimile:
000-000-0000
(a) If to the Company: Astrata Group Incorporated
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: 000-000-0000
With a copy to: Xxxxx Xxxx LLP
(which shall not 0000 Xxxx Xxxxxx, Xxxxx 000
constitute notice) Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile: 000-000-0000
(b) If to the Holder: _________________________________
_________________________________
_________________________________
_________________________________
Facsimile:_______________________
12. ATTORNEYS FEES TO PREVAILING PARTY. The prevailing party in an action,
claim, suit, investigation, or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened (a "Proceeding") shall be reimbursed by the other party for its
reasonable attorneys' fees and other costs and expenses incurred with the
investigation, preparation, and prosecution of such Proceeding.
13. MISCELLANEOUS. This Warrant and any term hereof may be changed, waived,
discharged, or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge, or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of Nevada. Any dispute relating to this Warrant shall be
adjudicated in Xxxxx County in the State of Nevada. The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise affect any
of the terms hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.
ASTRATA GROUP INCORPORATED
By: ____________________________ Witness:_________________________________
Xxxxxx Xxxxx, Chief Financial Officer Xxxxxx Xxxxxx, Chief Operating Officer
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EXHIBIT A
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: ASTRATA GROUP INCORPORATED
The undersigned, pursuant to the provisions set forth in the attached Warrant
(No. 2005-JAN-___), hereby irrevocably elects to purchase ________ shares of the
Common Stock covered by such Warrant.
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $5.00. Such
payment takes the form of $__________ in lawful money of the United States or
_______ shares of the Company's Common Stock in accordance with Sections 1.4 and
1.5 of the attached Warrant.
The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to ____________________________________, whose address is
________________________________________________________________________________
________________________________________________________________________________
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.
Dated:____________________ _________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
_________________________________________
_________________________________________
(Address)
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Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading "Transferees" the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of Astrata Group Incorporated to which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
Astrata Group Incorporated with full power of substitution in the premises.
TRANSFEREES PERCENTAGE TRANSFERRED NUMBER TRANSFERRED
----------- ---------------------- ------------------
-------------------- ------------------------------ ----------------------
-------------------- ------------------------------ ----------------------
-------------------- ------------------------------ ----------------------
-------------------- ------------------------------ ----------------------
Dated:
----------, -------- --------------------------------------------
(Signature must conform to name of holder as
specified on the face of the warrant)
Signed in the presence of:
-------------------------- --------------------------------------------
(Name) (Address)
ACCEPTED AND AGREED:
[TRANSFEREE]
-------------------------- --------------------------------------------
(Name) (Address)
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