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EXHIBIT 4.5
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT
BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR SOME OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS IS
AVAILABLE WITH RESPECT THERETO.
PREFERRED STOCK PURCHASE WARRANT
Warrant No. __________ Number of Shares: 5,714
Series C-2 Preferred Stock
CHEMCONNECT, INC.
Void after October 31, 2006
1. ISSUANCE. This Warrant is issued to LIGHTHOUSE CAPITAL PARTNERS III,
L.P. by CHEMCONNECT, INC., a Delaware corporation (hereinafter with its
successors called the "Company").
2. PURCHASE PRICE; NUMBER OF SHARES. The registered holder of this
Warrant (the "Holder"), commencing on the date hereof, is entitled upon
surrender of this Warrant with the subscription form annexed hereto duly
executed, at the principal office of the Company, to purchase from the Company
the following securities (collectively, the "Shares") at a price per share of
$3.50 (the "Purchase Price"), 5,714 fully paid and nonassessable shares of
Series C-2 Preferred Stock, $0.0001 par value, of the Company (the "Preferred
Stock"). Until such time as this Warrant is exercised in full or expires, the
Purchase Price and the securities issuable upon exercise of this Warrant are
subject to adjustment as hereinafter provided. The person or persons in whose
name or names any certificate representing shares of Preferred Stock is issued
hereunder shall be deemed to have become the holder of record of the shares
represented thereby as at the close of business on the date this Warrant is
exercised with respect to such shares, whether or not the transfer books of the
Company shall be closed.
3. PAYMENT OF PURCHASE PRICE. The Purchase Price may be paid (i) in cash
or by check, (ii) by the surrender by the Holder to the Company of any
promissory notes or other obligations issued by the Company, with all such notes
and obligations so surrendered being credited against the Purchase Price in an
amount equal to the principal amount thereof plus accrued interest to the date
of surrender, or (iii) by any combination of the foregoing.
4. NET ISSUE ELECTION. The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares of Preferred Stock
equal to the value of this Warrant or any portion hereof by the surrender of
this Warrant or such portion to the Company, with the net issue election notice
annexed hereto duly executed, at the principal office of the Company. Thereupon,
the Company shall issue to the Holder such number of fully paid and
nonassessable shares of Preferred Stock as is computed using the following
formula:
X=Y(A-B)/A
where: X = the number of shares of Preferred Stock to be
issued to the Holder pursuant to this SECTION 4.
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Y = the number of shares of Preferred Stock covered by this
Warrant in respect of which the net issue election is made
pursuant to this SECTION 4.
A = the Fair Market Value (defined below) of one share of
Preferred Stock, as determined at the time the net issue
election is made pursuant to this SECTION 4.
B = the Purchase Price in effect under this Warrant at the
time the net issue election is made pursuant to this
SECTION 4.
"Fair Market Value" of a share of Preferred Stock (or Common Stock if the
Preferred Stock has been automatically converted into Common Stock) as of a
particular date (the "Determination Date") shall mean:
(a) If the net issue election is made in connection with and
contingent upon the closing of the sale of the Company's Common Stock to
the public in a public offering pursuant to a Registration Statement
under the Securities Act of 1933 ("1933 Act") (a "Public Offering"), and
if the Company's Registration Statement relating to such Public Offering
("Registration Statement") has been declared effective by the Securities
and Exchange Commission, then the initial "Price to Public" specified in
the final prospectus with respect to such offering multiplied by the
number of shares of Common Stock into which each share of Preferred
Stock is then convertible.
(b) If the net issue election is not made in connection with and
contingent upon a Public Offering, then as follows:
(i) If traded on a securities exchange or the Nasdaq
National Market, the fair market value of the Common Stock shall
be deemed to be the average of the closing or last reported sale
prices of the Common Stock on such exchange or market over the
five day period ending five business days prior to the
Determination Date, and the fair market value of the Preferred
Stock shall be deemed to be such fair market value of the Common
Stock multiplied by the number of shares of Common Stock into
which each share of Preferred Stock is then convertible;
(ii) If otherwise traded in an over-the-counter market,
the fair market value of the Common Stock shall be deemed to be
the average of the closing ask prices of the Common Stock over
the five day period ending five business days prior to the
Determination Date, and the fair market value of the Preferred
Stock shall be deemed to be such fair market value of the Common
Stock multiplied by the number of shares of Common Stock into
which each share of Preferred Stock is then convertible; and
(iii) If there is no public market for the Common Stock,
then fair market value shall be determined in good faith by the
Company's Board of Directors.
5. PARTIAL EXERCISE. This Warrant may be exercised in part, and the
Holder shall be entitled to receive a new warrant, which shall be dated as of
the date of this Warrant, covering the number of shares in respect of which this
Warrant shall not have been exercised.
6. FRACTIONAL SHARES. In no event shall any fractional share of
Preferred Stock be issued upon any exercise of this Warrant. If, upon exercise
of this Warrant in its entirety, the Holder would, except as provided in this
SECTION 6, be entitled to receive a fractional share of Preferred Stock, then
the Company shall pay in lieu thereof, the Fair Market Value of such fractional
share in cash.
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7. EXPIRATION DATE; AUTOMATIC EXERCISE. This Warrant shall expire at the
close of business on October 31, 2006, and shall be void thereafter.
Notwithstanding the foregoing, this Warrant shall automatically be deemed to be
exercised in full pursuant to the provisions of SECTION 4 hereof, without any
further action on behalf of the Holder, immediately prior to the time this
Warrant would otherwise expire pursuant to the preceding sentence.
8. RESERVED SHARES; VALID ISSUANCE. The Company covenants that it will
at all times from and after the date hereof reserve and keep available such
number of its authorized shares of Preferred Stock and Common Stock, $0.0001 par
value, of the Company (the "Common Stock"), free from all preemptive or similar
rights therein, as will be sufficient to permit, respectively, the exercise of
this Warrant in full and the conversion into shares of Common Stock of all
shares of Preferred Stock receivable upon such exercise. The Company further
covenants that such shares as may be issued pursuant to such exercise and/or
conversion will, upon issuance, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.
9. STOCK SPLITS AND DIVIDENDS. If after the date hereof the Company
shall subdivide the Preferred Stock, by split-up or otherwise, or combine the
Preferred Stock, or issue additional shares of Preferred Stock in payment of a
stock dividend on the Preferred Stock, the number of shares of Preferred Stock
issuable on the exercise of this Warrant shall forthwith be proportionately
increased in the case of a subdivision or stock dividend, or proportionately
decreased in the case of a combination, and the Purchase Price shall forthwith
be proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination.
10. NO STOCKHOLDER RIGHTS. Except as expressly provided in this Warrant,
prior to exercise of this Warrant, the Holder shall not be entitled to any
rights of a stockholder with respect to the Shares, including without limitation
the right to vote such Shares, receive dividends or other distributions thereon,
exercise preemptive rights or be notified of stockholder meetings, and such
Holder shall not be entitled to any notice or other communication concerning the
business or affairs of the Company, provided, however, that nothing in this
SECTION 10 shall limit the right of the Holder to be provided the notices
required under the Warrant.
11. MERGERS AND RECLASSIFICATIONS. If after the date hereof the Company
shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Preferred Stock which might have been purchased by the
Holder immediately prior to such Reorganization, and in any such case
appropriate provisions shall be made with respect to the rights and interest of
the Holder to the end that the provisions hereof (including without limitation,
provisions for the adjustment of the Purchase Price and the number of shares
issuable hereunder and the provisions relating to the net issue election) shall
thereafter be applicable in relation to any shares of stock or other securities
and property thereafter deliverable upon exercise hereof. For the purposes of
this SECTION 11, the term "Reorganization" shall mean and refer to (i) an
acquisition of the Company by another entity by means of a merger,
consolidation, or other transaction or series of related transactions resulting
in the exchange of the outstanding shares of the Company's capital stock such
that stockholders of the Company prior to such transaction own, directly or
indirectly, less than 50% of the voting power of the surviving entity, or (ii) a
sale or transfer of all or substantially all of the Company's asset to any other
person.
12. CERTIFICATE OF ADJUSTMENT. Whenever the Purchase Price is adjusted,
as herein provided, the Company shall promptly deliver to the Holder a
certificate of the Company's chief financial officer setting forth the Purchase
Price after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.
13. NOTICES OF RECORD DATE, ETC. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase, sell or otherwise acquire or dispose of any shares of
stock of any class or any other securities or property, or to receive any other
right;
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(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger involving the
Company, or sale or conveyance of all or substantially all of its assets; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then in each such event the Company will provide or cause to be provided to the
Holder a written notice thereof. Such notice shall be provided at least twenty
(20) business days prior to the date specified in such notice on which any such
action is to be taken.
14. REPRESENTATIONS, WARRANTIES AND COVENANTS. This Warrant is issued
and delivered by the Company and accepted by each Holder on the basis of the
following representations, warranties and covenants made by the Company:
(a) The Company has all necessary authority to issue, execute and
deliver this Warrant and to perform its obligations hereunder. This Warrant has
been duly authorized issued, executed and delivered by the Company and is the
valid and binding obligation of the Company, enforceable in accordance with its
terms.
(b) The shares of Preferred Stock issuable upon the exercise of
this Warrant have been duly authorized and reserved for issuance by the Company
and, when issued in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable.
(c) The issuance, execution and delivery of this Warrant do not,
and the issuance of the shares of Preferred Stock upon the exercise of this
Warrant in accordance with the terms hereof will not, (i) violate or contravene
the Certificate or by-laws, or to the Company's knowledge, any law, statute,
regulation, rule, judgment or order applicable to the Company, (ii) violate,
contravene or result in a breach or default under any contract, agreement or
instrument to which the Company is a party or by which the Company or any of its
assets are bound or (iii) require the consent or approval of or the filing of
any notice or registration with any person or entity.
(d) As long as this Warrant is, or any shares of Preferred Stock
issued upon exercise of this Warrant or any shares of Common Stock issued upon
conversion of such shares of Preferred Stock are, issued and outstanding, the
Company will provide to the Holder the financial and other information described
in that certain Lease Line Schedule No. 01 to Master Equipment Lease Agreement
No. 2192 between the Company and Lighthouse Capital Partners III, L.P. dated as
of November 4, 1999.
(e) As of the date hereof, the authorized capital stock of the
Company consists of (i)thirty million (30,000,000) shares of Common Stock, of
which one million nine hundred thirty-eight thousand fifty-two (1,938,052) are
outstanding, (ii) five million six hundred eighty-six thousand five hundred
seventy-three (5,686,573) shares of Series A Preferred Stock, all of which are
issued and outstanding, (iii) four million three hundred forty-six thousand five
hundred thirty-nine (4,346,539) shares of Series B Preferred Stock, four million
three hundred twenty-five thousand (4,325,000) of which are issued and
outstanding, (iv) one million nine hundred thousand (1,900,000) shares of Series
C-1 Preferred Stock, six hundred sixty-six thousand six hundred sixty-seven
(666,667) of which are issued and outstanding, and (v) eight million (8,000,000)
shares of Series C-2 Preferred Stock, seven million nine hundred twenty-eight
thousand five hundred seventy (7,928,570) of which are issued and outstanding.
Attached hereto as EXHIBIT C is a capitalization table
summarizing the capitalization of the Company, including, without limitation,
the current Conversion Price of the Series C-2 Preferred Stock.
15. INVESTORS' RIGHTS AGREEMENT. The Company agrees that, upon the next
amendment of that certain Xxxxxxx and Restated Investors' Rights Agreement by
and among the Company, the Investors and the Founders listed therein dated as of
July 15, 1999 (the "Investors' Rights Agreement"), it will use its best efforts
to effect such amendment so that the Holder shall be an Investor within the
meaning of such Investors' Rights Agreement.
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16. RIGHT OF FIRST REFUSAL. Subject to the terms and conditions
contained in this SECTION 16, the Company agrees that the holder of this Warrant
has the right of first refusal to purchase its pro rata portion of any New
Securities (as defined in SECTION 16(a) below) which the Company may, from time
to time, propose to sell and issue. A holder's pro rata portion for purposes of
this SECTION 16 is the ratio that (x) the sum of the number of shares of the
Company's Common Stock then issued or issuable to the holder (including upon
conversion of any Preferred Stock held by the holder and upon exercise of this
Warrant and conversion of the Shares issued thereupon) bears to (y) the sum of
the total number of shares of Company's Common Stock then outstanding, the
number of shares of the Company's Common Stock issuable upon conversion of the
Preferred Stock then outstanding, and the number of shares of the Company's
Common Stock issuable to the holder upon exercise of this Warrant and conversion
of the Shares issued thereupon.
(a) DEFINITION OF NEW SECURITIES. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company, including
Common Stock and Preferred Stock, whether now authorized or not, and rights,
options or warrants to purchase said shares of Common Stock or Preferred Stock,
and securities of any type whatsoever that are, or may become, convertible into
or exercisable for said shares of Common Stock or Preferred Stock.
Notwithstanding the foregoing, "New Securities" does not include: (i) Common
Stock issuable upon conversion of any Preferred Stock outstanding as of the
grant date; (ii) securities offered to the public generally pursuant to a
registration statement under the Securities Act; (iii) securities issued
pursuant to the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or shares or other reorganization;
(iv) shares of the Company's Common Stock or related options convertible into or
exercisable for such Common Stock issued to employees, officers and directors
of, and consultants to, the Company, pursuant to any compensatory benefit plan;
(v) stock issued pursuant to any rights or agreements, including, without
limitation, convertible securities, options and warrants, provided that the
Company shall have complied with the right of first refusal established by this
SECTION 16 with respect to the initial sale or grant by the Company of such
rights or agreements; or (vi) stock issued in connection with any stock split,
reverse stock split, stock dividend, combination or recapitalization by the
Company.
(b) NOTICE OF RIGHT. In the event the Company proposes to
undertake an issuance of New Securities, it shall give the holder written notice
of its intention, describing the type of New Securities and the price and terms
upon which the Company proposes to issue the same. The holder shall have fifteen
(15) days from the date of receipt of any such notice to agree to purchase
shares of such New Securities (up to the amount referred to in this SECTION 16),
for the price and upon the terms specified in the notice, by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased.
(c) EXERCISE OF RIGHT. If the holder exercises its right of first
refusal hereunder, the closing of the purchase of the New Securities with
respect to which such right has been exercised shall take place within ninety
(90) calendar days after the holder gives notice of such exercise, which period
of time shall be extended in order to comply with applicable laws and
regulations. Upon exercise of such right of first refusal, the Company and the
holder shall be legally obligated to consummate the purchase contemplated
thereby and shall use their best efforts to secure any approvals required in
connection therewith.
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(d) LAPSE AND REINSTATEMENT OF RIGHT. In the event the holder
fails to exercise the right of first refusal provided in this SECTION 16 within
said fifteen (15) day period, the Company shall have ninety (90) days thereafter
to sell or enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be closed, if at all, within sixty (60) days from the date
of said agreement) to sell the New Securities not elected to be purchased by the
holder at the price and upon the terms no more favorable to the purchasers of
such securities than specified in the Company's notice. In the event the Company
has not sold the New Securities or entered into an agreement to sell the New
Securities within said ninety (90) day period (or sold and issued New Securities
in accordance with the foregoing within sixty (60) days from the date of said
agreement), the Company shall not thereafter issue or sell any New Securities
without first offering such securities to the holder in the manner provided
above.
(e) ASSIGNMENT. The right of the holder to purchase any part of
the New Securities may be assigned in whole or in part to any partner,
subsidiary, affiliate or shareholder of the holder.
(f) TERMINATION OF RIGHT OF FIRST REFUSAL. The right of first
refusal granted under SECTION 16 shall terminate on and be of no further force
or effect upon the closing of a firmly underwritten public offering of the
securities of the Company.
17. AMENDMENT. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Holder and the Company.
18. REPRESENTATIONS AND COVENANTS OF THE HOLDER. This Preferred Stock
Purchase Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Holder, which by its execution
hereof the Holder hereby confirms:
(a) INVESTMENT PURPOSE. The right to acquire Preferred Stock
issuable upon exercise of the Holder's rights contained herein or Common Stock
issuable upon conversion thereof (the "Conversion Shares") will be acquired for
investment and not with a view to the sale or distribution of any part thereof,
and the Holder has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption. The
Holder further represents that such Holder does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, or
grant participations to such person or to any third person, with respect to any
of the Preferred Stock or Conversion Shares.
(b) ACCREDITED INVESTOR. Holder is an "accredited investor"
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
(c) PRIVATE ISSUE. The Holder understands (i) that the Preferred
Stock issuable upon exercise of the Holder's rights contained herein and the
Conversion Shares is not registered under the 1933 Act or qualified under
applicable state securities laws on the ground that the issuance contemplated by
this Warrant will be exempt from the registration and qualifications
requirements thereof, and (ii) that the Company's reliance on such exemption is
predicated on the representations set forth in this SECTION 18.
(d) FINANCIAL RISK. The Holder is an investor in securities of
companies in the development stage and has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.
(e) DISCLOSURE OF INFORMATION. The Holder believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Warrant and the Preferred Stock issuable upon exercise
thereof. Such Holder further represents that it has had the opportunity to ask
questions and receive
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answers from the Company regarding the terms and conditions of the Preferred
Stock and the business, properties, prospects and financial condition of the
Company.
19. NOTICES, TRANSFERS, ETC.
(a) Any notice or written communication required or permitted to
be given to the Holder may be given by certified mail or delivered to the Holder
at the address most recently provided by the Holder to the Company.
(b) Subject to compliance with applicable federal and state
securities laws, this Warrant may be transferred by the Holder with respect to
any or all of the shares purchasable hereunder. Upon surrender of this Warrant
to the Company, together with the assignment notice annexed hereto duly
executed, for transfer of this Warrant as an entirety by the Holder, the Company
shall issue a new warrant of the same denomination to the assignee. Upon
surrender of this Warrant to the Company, together with the assignment hereof
properly endorsed, by the Holder for transfer with respect to a portion of the
shares of Preferred Stock purchasable hereunder, the Company shall issue a new
warrant to the assignee, in such denomination as shall be requested by the
Holder hereof, and shall issue to such Holder a new warrant covering the number
of shares in respect of which this Warrant shall not have been transferred.
(c) In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and denomination
and deliver the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of an affidavit of the Holder or other
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant
20. NO IMPAIRMENT. The Company will not, by amendment of its Certificate
or through any reclassification, capital reorganization, consolidation, merger,
sale or conveyance of assets, dissolution, liquidation, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
of 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 action as may be necessary or appropriate in order to protect the rights of
the Holder.
21. GOVERNING LAW. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the internal laws of the State of
California.
22. SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors, legal representatives and permitted assigns.
23. BUSINESS DAYS. If the last or appointed day for the taking of any
action required or the expiration of any rights granted herein shall be a
Saturday or Sunday or a legal holiday in California, then such action may be
taken or right may be exercised on the next succeeding day which is not a
Saturday or Sunday or such a legal holiday.
24. QUALIFYING PUBLIC OFFERING. If the Company shall effect a firm
commitment underwritten public offering of shares of Common Stock which results
in the conversion of the Preferred Stock into Common Stock pursuant to the
Certificate in effect immediately prior to such offering, then, effective upon
such conversion, this Warrant shall change from the right to purchase shares of
Preferred Stock to the right to purchase shares of Common Stock, and the Holder
shall thereupon have the right to purchase, at a total price equal to that
payable upon the exercise of this Warrant in full, the number of shares of
Common Stock which would have been receivable by the Holder upon the exercise of
this Warrant for shares of Preferred Stock immediately prior to such conversion
of such shares of Preferred Stock into shares of Common Stock, and in such event
appropriate provisions shall be made with respect to the rights and interest of
the Holder to the end that the provisions hereof (including, without limitation,
the provisions for the adjustment of the Purchase Price and of the number of
shares purchasable upon exercise of this Warrant and the provisions relating to
the net issue election) shall thereafter be applicable to any shares of Common
Stock deliverable upon the exercise hereof.
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25. VALUE. The Company and the Holder agree that the value of this
Warrant on the date of grant is $125.
Dated: November ____, 1999 CHEMCONNECT, INC.
By:
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Name: Xxxx X. Xxxxx
---------------------------------
Title: President and COO
---------------------------------
[CORPORATE SEAL]
Attest:
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SUBSCRIPTION
To: __________________________________________________ Date: ___________________
The undersigned hereby subscribes for ____________ shares of Preferred
Stock covered by this Warrant. The certificate(s) for such shares shall be
issued in the name of the undersigned or as otherwise indicated below:
Signature:_________________________________
Name for Registration:_____________________
Mailing Address:___________________________
___________________________________________
NET ISSUE ELECTION NOTICE
To: __________________________________________________ Date: ___________________
The undersigned hereby elects under SECTION 4 to surrender the right to
purchase __________ shares of Preferred Stock pursuant to this Warrant. The
certificate(s) for such shares issuable upon such net issue election shall be
issued in the name of the undersigned or as otherwise indicated below:
Signature:_________________________________
Name for Registration:_____________________
Mailing Address:___________________________
___________________________________________
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ASSIGNMENT
For value received ___________________________ hereby sells, assigns and
transfers unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
[Please print or typewrite name and address of Assignee]
________________________________________________________________________________
the within Warrant, and does hereby irrevocably constitute and appoints
________________________________ its attorney to transfer the within Warrant on
the books of the within named Company with full power of substitution on the
premises.
Dated:______________________________________
In the Presence of:
____________________________________________
