WARRANT AGREEMENT
AGREEMENT, dated as of this 10th day of September, 1999, by and among
iPARTY CORP., a Delaware corporation (the "Company"), CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, as warrant agent (the "Warrant Agent"), and COMMONWEALTH
ASSOCIATES, L.P., a New York limited partnership ("Commonwealth").
W I T N E S S E T H
WHEREAS, in connection with a private placement (the "Private
Placement") of a up to 50,000 units ("Units") each Unit consisting (i) two
shares of Series C Convertible Preferred Stock and (ii) ten redeemable common
stock purchase warrants (the "Warrants"), each Warrant exercisable to purchase
one share of the Company's common stock, $.001 par value (the "Common Stock"),
the Company will issue up to 500,000 Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, exchange and redemption of the Warrants, the
issuance of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the holders thereof;
NOW THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall have
the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean stock of the Company of any
class, whether now or hereafter authorized, which has the right to
participate in the distributions of earnings and assets of the Company
without limit as to amount or percentage, which at the date hereof
consists of 50,000,000 authorized shares of Common Stock, $.001 value.
(b) "Corporate Office" shall mean the office of the Warrant
Agent (or its successor) at which at any particular time its principal
business shall be administered, which office is located at the date
hereof at ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(c) "Exercise Date" shall mean, as to any Warrant, the date on
which the Warrant Agent shall have received both (a) the Warrant
Certificate representing such Warrant, with the exercise form thereon
duly executed by the Registered Holder thereof or his attorney duly
authorized in writing, and (b) payment in cash, or by official bank or
certified check made payable to the Company, of an amount in lawful
money of the United States of America equal to the Exercise Price.
(d) "Exercise Price" shall mean the purchase price to be paid
upon exercise of each Warrant in accordance with the terms hereof,
which price shall be $2.00 per share subject to adjustment from time to
time pursuant to the provisions of Section 8 hereof and subject to the
Company's right to reduce the Exercise Price upon notice to all
warrantholders.
(e) "Initial Warrant Exercise Date" shall mean September 10,
2000.
(f) "Registered Holder" shall mean the person in whose name
any certificate representing Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.
(g) "Redemption Price" shall mean the price at which the
Company may, at its option in accordance with the terms hereof, redeem
the Warrants, which price shall be $0.05 per Warrant.
(h) "Transfer Agent" shall mean Continental Stock Transfer &
Trust Company, as the Company's transfer agent, or its authorized
successor, as such.
(i) "Warrant Expiration Date" shall mean 5:00 P.M. (New York
time) on September 10, 2005 or, with respect to Warrants which are
outstanding as of the applicable Redemption Date (as defined in Section
8), the Redemption Date, whichever is earlier; provided that if such
date shall in the State of New York be a holiday or a day on which
banks are authorized to close, then 5:00 P.M. (New York time) on the
next following day which in the State of New York is not a holiday or a
day on which banks are authorized to close. Upon notice to all
warrantholders the Company shall have the right to extend the Warrant
Expiration Date.
(j) "Warrant Shares" shall mean the shares of Common Stock
deliverable upon exercise of the Warrants, as adjusted from time to
time.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) A Warrant shall initially entitle the Registered Holder of
the Warrant Certificate representing such Warrant to purchase one share
of Common Stock upon the exercise thereof, in accordance with the terms
hereof, subject to modification and adjustment as provided in Section
8.
(b) From time to time, up to the Warrant Expiration Date, the
Transfer Agent shall execute and deliver stock certificates in required
whole number denominations
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representing up to an aggregate of 500,000 shares of Common Stock,
subject to adjustment as described herein, upon the exercise of
Warrants in accordance with this Agreement.
(c) From time to time, up to the Warrant Expiration Date, the
Warrant Agent shall execute and deliver Warrant Certificates in
required whole number denominations to the persons entitled thereto in
connection with any transfer or exchange permitted under this
Agreement; provided that no Warrant Certificates shall be issued except
(i) those initially issued hereunder, (ii) those issued on or after the
Initial Warrant Exercise Date, upon the exercise of fewer than all
Warrants represented by any Warrant Certificate, to evidence any
unexercised Warrants held by the exercising Registered Holder, (iii)
those issued upon any transfer or exchange pursuant to Section 6; (iv)
those issued in replacement of lost, stolen, destroyed or mutilated
Warrant Certificates pursuant to Section 7; and (v) at the option of
the Company, in such form as may be approved by the its Board of
Directors, to reflect (a) any adjustment or change in the Exercise
Price or the number of shares of Common Stock purchasable upon exercise
of the Warrants, made pursuant to Section 8 hereof and (b) other
modifications approved by Warrantholders in accordance with Section 16
hereof.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) The Warrant Certificates shall be substantially in the
form annexed hereto as Exhibit A (the provisions of which are hereby
incorporated herein) and may have such letters, numbers or other marks
of identification or designation and such legends, summaries or
endorsements printed, lithographed, engraved or typed thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Warrants may be
listed, or to conform to usage. The Warrant Certificates shall be dated
the date of issuance thereof (whether upon initial issuance, transfer,
exchange or in lieu of mutilated, lost, stolen, or destroyed Warrant
Certificates) and issued in registered form.
Warrants shall be numbered serially with the letters PWC.
(b) Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer,
President or any Vice President and by its Secretary or an Assistant
Secretary, by manual signatures or by facsimile signatures printed
thereon, and shall have imprinted thereon a facsimile of the Company's
seal. In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer of the Company
before the date of issuance of the Warrant Certificates and issue and
delivery thereof, such Warrant Certificates may nevertheless be
issued and delivered with the same force and effect as though the
person who signed such Warrant Certificates had not ceased to be such
officer of the Company. After execution
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by the Company, Warrant Certificates shall be delivered by the Warrant
Agent to the Registered Holder.
SECTION 4. EXERCISE.
(a) Each Warrant may be exercised by the Registered Holder
thereof at any time on or after the Initial Exercise Date, but not
after the Warrant Expiration Date, upon the terms and subject to the
conditions set forth herein and in the applicable Warrant Certificate.
A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the Exercise Date and the person entitled to
receive the securities deliverable upon such exercise shall be treated
for all purposes as the holder upon exercise thereof as of the close of
business on the Exercise Date. As soon as practicable on or after the
Exercise Date the Warrant Agent shall forward to the Company the
proceeds received from the exercise of a Warrant, and promptly after
receiving authorization from the Company shall cause to be issued and
delivered by the Transfer Agent, to the person or persons entitled to
receive the same, a certificate or certificates for the securities
deliverable upon such exercise, (plus a certificate for any remaining
unexercised Warrants of the Registered Holder). Notwithstanding the
foregoing, in the case of payment made in the form of a check drawn on
an account of Commonwealth or such other investment banks and brokerage
houses as the Company shall approve, certificates shall immediately be
issued without any delay. Upon the exercise of any Warrant, the Warrant
Agent shall promptly forward the proceeds received for the Warrant to
the Company or as the Company may direct in writing.
(b) The Registered Holder may, at its option, exchange this
Warrant, in whole or in part (a "Warrant Exchange"), into the number of
Warrant Shares determined in accordance with this Section (4)(b), by
surrendering the Warrant Certificate at the principal office of the
Company or at the office of its stock transfer agent, accompanied by a
notice stating such Registered Holder's intent to effect such exchange,
the number of Warrant Shares to be exchanged and the date on which the
Registered Holder requests that such Warrant Exchange occur (the
"Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the
Notice of Exchange is received by the Company (the "Exchange Date").
Certificates for the shares issuable upon such Warrant Exchange and, if
applicable, a new warrant of like tenor evidencing the balance of the
shares remaining subject to such Warrant, shall be issued as of the
Exchange Date and delivered to the Registered Holder within seven (7)
days following the Exchange Date. In connection with any Warrant
Exchange, a Warrant shall represent the right to subscribe for and
acquire the number of Warrant Shares (rounded to the next highest
integer) equal to (i) the number of Warrant Shares specified by the
Registered Holder in its Notice of Exchange (the "Total Number") less
(ii) the number of Warrant Shares equal to the quotient obtained by
dividing (A) the product of the Total Number and the existing Exercise
Price by (B) the current market value of a share of Common Stock.
Current market value shall have the meaning set forth
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Section 11(a) hereof, except that for purposes hereof, the date of
exercise, as used in such Section 11(a) hereof, shall mean the Exchange
Date.
SECTION 5. RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.
(a) The Company covenants that it will at all times reserve
and keep available out of its authorized Common Stock, solely for the
purpose of issue upon exercise of Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Common
Stock which shall be issuable upon exercise of the Warrants and payment
of the Exercise Price shall, at the time of delivery, be duly and
validly issued, fully paid, nonassessable and free from all taxes,
liens and charges with respect to the issue thereof (other than those
which the Company shall promptly pay or discharge).
(b) The Company will use reasonable efforts to obtain
appropriate approvals or registrations under state "blue sky"
securities laws with respect to the exercise of the Warrants; provided,
however, that the Company shall not be obligated to file any general
consent to service of process or qualify as a foreign corporation in
any jurisdiction. With respect to any such securities laws, however,
Warrants may not be exercised by, or shares of Common Stock issued to,
any Registered Holder in any state in which such exercise would be
unlawful.
(c) The Company shall pay all documentary, stamp or similar
taxes and other governmental charges that may be imposed with respect
to the issuance of Warrants, or the issuance, or delivery of any shares
upon exercise of the Warrants; provided, however, that if the shares of
Common Stock are to be delivered in a name other than the name of the
Registered Holder of the Warrant Certificate representing any Warrant
being exercised, then no such delivery shall be made unless the person
requesting the same has paid to the Warrant Agent the amount of
transfer taxes or charges incident thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized to
requisition the Company's Transfer Agent from time to time for
certificates representing shares of Common Stock required upon exercise
of the Warrants, and the Company will authorize the Transfer Agent to
comply with all such proper requisitions.
SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER. Subject to the
restrictions on transfer contained in the Warrant Certificates and the
Subscription Agreements between the Company and the purchasers of Units:
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants of the
same class or may be
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transferred in whole or in part. Warrant Certificates to be exchanged
shall be surrendered to the Warrant Agent at its Corporate Office, and
upon satisfaction of the terms and provisions hereof, the Company shall
execute, and the Warrant Agent shall countersign, issue and deliver in
exchange therefor the Warrant Certificate or Certificates which the
Registered Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in which,
subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and the transfer thereof in accordance
with its regular practice. Upon due presentment for registration of
transfer of any Warrant Certificate at its office, the Company shall
execute and the Warrant Agent shall issue and deliver to the transferee
or transferees a new Warrant Certificate or Certificates representing
an equal aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for
registration of transfer, or for exchange or exercise, the subscription
form on the reverse thereof shall be duly endorsed, or be accompanied
by a written instrument or instruments of transfer and subscription, in
form satisfactory to the Company, duly executed by the Registered
Holder or his attorney-in-fact duly authorized in writing.
(d) The Company may require payment by such holder of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for
exchange in case of mutilated Warrant Certificates shall be promptly
canceled by the Warrant Agent and thereafter retained by the Warrant
Agent until termination of this Agreement or resignation of the Warrant
Agent, or, with the prior written consent of Commonwealth, disposed of
or destroyed, at the direction of the Company.
(f) Prior to due presentment for registration of transfer
thereof, the Company and the Warrant Agent may deem and treat the
Registered Holder of any Warrant Certificate as the absolute owner
thereof and of each Warrant represented thereby (notwithstanding any
notations of ownership or writing thereon made by anyone other than a
duly authorized officer of the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary.
SECTION 7. LOSS OR MUTILATION. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership of and loss,
theft, destruction or mutilation of any Warrant Certificate and (in case of
loss, theft or destruction) of indemnity satisfactory to them, and (in the case
of mutilation) upon surrender and cancellation thereof, the Company shall
execute and the Warrant Agent shall (in the absence of notice to the Company
and/or Warrant Agent that the Warrant Certificate has been acquired by a
bonafide purchaser) countersign and deliver to the Registered Holder in lieu
thereof a new Warrant Certificate of like tenor representing an equal aggregate
number of Warrants. Applicants for a substitute Warrant
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Certificate shall comply with such other reasonable regulations and pay such
other reasonable charges as the Warrant Agent may prescribe.
SECTION 8. ANTI-DILUTION PROVISIONS. Subject to the provisions of
Section l hereof, the Exercise Price in effect at any time and the number and
kind of securities purchasable upon the exercise of the Warrants shall be
subject to adjustment from time to time upon the happening of certain events as
follows:
(a) In case the Company shall hereafter (i) declare a dividend
or make a distribution on its outstanding shares of Common Stock in
shares of Common Stock, (ii) subdivide or reclassify its outstanding
shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify its outstanding shares of Common Stock into a
smaller number of shares, the Exercise Price in effect at the time of
the record date for such dividend or distribution or of the effective
date of such subdivision, combination or reclassification shall be
adjusted so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall be the
number of shares of Common Stock outstanding after giving effect to
such action, and the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to such action. Such
adjustment shall be made successively whenever any event listed above
shall occur.
(b) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of its Common Stock
entitling them to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price (the "Subscription
Price") (or having a conversion price per share) less than the current
market price of the Common Stock (as defined in Subsection (h) below)
on the record date mentioned below, or less than the Exercise Price on
such record date the Exercise Price shall be adjusted so that the same
shall equal the lower of (i) the price determined by multiplying the
Exercise Price in effect immediately prior to the date of such issuance
by a fraction, the numerator of which shall be the sum of the number of
shares of Common Stock outstanding on the record date mentioned below
and the number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered
(or the aggregate conversion price of the convertible securities so
offered) would purchase at such current market price per share of the
Common Stock, and the denominator of which shall be the sum of the
number of shares of Common Stock outstanding on such record date and
the number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible securities so
offered are convertible) or (ii) in the event the Subscription Price is
equal to or higher than the current market price but is less than the
Exercise Price, the price determined by multiplying the Exercise Price
in effect immediately prior to the date of issuance by a fraction, the
numerator of which shall be the sum of the number of shares outstanding
on the record date mentioned below and the number of additional shares
of Common Stock which the aggregate offering price of the total number
of shares of
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Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at the Exercise Price
in effect immediately prior to the date of such issuance, and the
denominator of which shall be the sum of the number of shares of Common
Stock outstanding on the record date mentioned below and the number of
additional shares of Common Stock offered for subscription or purchase
(or into which the convertible securities so offered are convertible).
Such adjustment shall be made successively whenever such rights or
warrants are issued and shall become effective immediately after the
record date for the determination of shareholders entitled to receive
such rights or warrants; and to the extent that shares of Common Stock
are not delivered (or securities convertible into Common Stock are not
delivered) after the expiration of such rights or warrants the Exercise
Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights or
warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible into Common Stock)
actually delivered.
(c) In case the Company shall hereafter distribute to the
holders of its Common Stock evidences of its indebtedness or assets
(excluding cash dividends or distributions and dividends or
distributions referred to in Subsection (a) above) or subscription
rights or warrants (excluding those referred to in Subsection (b)
above), then in each such case the Exercise Price in effect thereafter
shall be determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding multiplied by
the current market price per share of Common Stock (as defined in
Subsection (h) below), less the fair market value (as determined by the
Company's Board of Directors) of said assets or evidences of
indebtedness so distributed or of such rights or warrants, and the
denominator of which shall be the total number of shares of Common
Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made successively whenever such
a record date is fixed. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of shareholders entitled to receive
such distribution.
(d) In case the Company shall hereafter issue shares of its
Common Stock (excluding shares issued (i) in any of the transactions
described in Subsection (a) above, (ii) upon exercise of options
granted to the Company's officers, directors, employees and consultants
under a plan or plans adopted by the Company's Board of Directors and
approved by its shareholders, if such shares would otherwise be
included in this Subsection (d), (but only to the extent that the
aggregate number of shares excluded hereby and issued after the date
hereof, shall not exceed 25% of the Company's Common Stock outstanding,
on a fully-diluted basis, at the time of any issuance), (iii) upon
exercise of options, warrants, convertible securities and convertible
debentures outstanding as of the final closing of the Private
Placement, or exercise of the Warrants, (iv) to shareholders of any
corporation which merges into the Company in proportion to
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their stock holdings of such corporation immediately prior to such
merger, upon such merger, or (v) issued in a bona fide public offering
pursuant to a firm commitment underwriting, but only if no adjustment
is required pursuant to any other specific subsection of this Section 8
(without regard to Subsection (i) below) with respect to the
transaction giving rise to such rights) for a consideration per share
(the "Offering Price") less than the current market price per share (as
defined in Subsection (h) below) on the date the Company fixes the
offering price of such additional shares or less than the Exercise
Price, the Exercise Price shall be adjusted immediately thereafter so
that it shall equal the lower of (i) the price determined by
multiplying the Exercise Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to the issuance of
such additional shares and the number of shares of Common Stock which
the aggregate consideration received (determined as provided in
Subsection (g) below) for the issuance of such additional shares would
purchase at such current market price per share of Common Stock, and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after the issuance of such additional shares or
(ii) in the event the Offering Price is equal to or higher than the
current market price per share but less than the Exercise Price, the
price determined by multiplying the Exercise Price in effect
immediately prior to the date of issuance by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such additional shares and the
number of shares of Common Stock which the aggregate consideration
received (determined as provided in subsection (g) below) for the
issuance of such additional shares would purchase at the Exercise Price
in effect immediately prior to the date of such issuance, and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately after the issuance of such additional shares.
Such adjustment shall be made successively whenever such an issuance is
made.
(e) In case the Company shall hereafter issue any securities
convertible into or exchangeable for its Common Stock (excluding
securities issued in transactions described in Subsections (b) and (c)
above) for a consideration per share of Common Stock (the
"Conversion Price") initially deliverable upon conversion or exchange
of such securities (determined as provided in Subsection (g) below)
less than the current market price per share (as defined in Subsection
(h) below) in effect immediately prior to the issuance of such, or less
than the Exercise Price, the Exercise Price shall be adjusted
immediately thereafter so that it shall equal the lower of (i) the
price determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall
be the sum of the number of shares of Common Stock outstanding
immediately prior to the issuance of such securities and the number of
shares of Common Stock which the aggregate consideration received
(determined as provided in Subsection (g) below) for such securities
would purchase at such current market price per share of Common Stock,
and the denominator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such issuance and the
maximum
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number of shares of Common Stock of the Company deliverable upon
conversion of or in exchange for such securities at the initial
conversion or exchange price or rate or (ii) in the event the
Conversion Price is equal to or higher than the current market price
per share but less than the Exercise Price, the price determined by
multiplying the Exercise Price in effect immediately prior to the date
of issuance by a fraction, the numerator of which shall be the sum of
the number of shares outstanding immediately prior to the issuance of
such securities and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in subsection
(g) below) for such securities would purchase at the Exercise Price in
effect immediately prior to the date of such issuance, and the
denominator of which shall be the sum of the number of shares of Common
Stock outstanding immediately prior to the issuance of such securities
and the maximum number of shares of Common Stock of the Company
deliverable upon conversion of or in exchange for such securities at
the initial conversion or exchange price or rate. Such adjustment shall
be made successively whenever such an issuance is made.
(f) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsections (a), (b), (c), (d) and (e)
above, the number of Shares purchasable upon exercise of this Warrant
shall simultaneously be adjusted by multiplying the number of Shares
initially issuable upon exercise of this Warrant by the Exercise Price
in effect on the date hereof and dividing the product so obtained by
the Exercise Price, as adjusted.
(g) For purposes of any computation respecting consideration
received pursuant to Subsections (d) and (e) above, the following shall
apply:
(A) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such
cash, provided that in no case shall any deduction be made for
any commissions, discounts or other expenses incurred by
the Company for any underwriting of the issue or otherwise in
connection therewith;
(B) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the
fair market value thereof as determined in good faith by the
Board of Directors of the Company (irrespective of the
accounting treatment thereof), whose determination shall be
conclusive; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock,
the aggregate consideration received therefor shall be deemed
to be the consideration received by the Company for the
issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the
conversion or exchange thereof (the
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consideration in each case to be determined in the same manner
as provided in clauses (A) and (B) of this Subsection (g)).
(h) For the purpose of any computation under Subsections (b),
(c), (d) and (e) above, the current market price per share of Common
Stock at any date shall be determined in the manner set forth in
Section (11) hereof except that the current market price per share
shall be deemed to be the higher of (i) the average of the prices for
30 consecutive business days before such date or (ii) the price on the
business day immediately preceding such date.
(i) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least five cents ($0.05) in such price; provided, however, that any
adjustments which by reason of this Subsection (i) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment required to be made hereunder. All calculations
under this Section 8 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be. Anything in this
Section 8 to the contrary notwithstanding, the Company shall be
entitled, but shall not be required, to make such changes in the
Exercise Price, in addition to those required by this Section 8, as it
shall determine, in its sole discretion, to be advisable in order that
any dividend or distribution in shares of Common Stock, or any
subdivision, reclassification or combination of Common Stock, hereafter
made by the Company shall not result in any Federal Income tax
liability to the holders of Common Stock or securities convertible into
Common Stock (including Warrants).
(j) Whenever the Exercise Price is adjusted, as herein
provided, the Company shall promptly but no later than 10 days after
any request for such an adjustment by the Holder, cause a notice
setting forth the adjusted Exercise Price and adjusted number of Shares
issuable upon exercise of each Warrant, and, if requested, information
describing the transactions giving rise to such adjustments, to be
mailed to the Holders at their last addresses appearing in the Warrant
Register, and shall cause a certified copy thereof to be mailed to its
transfer agent, if any. The Company may retain a firm of independent
certified public accountants selected by the Board of Directors (who
may be the regular accountants employed by the Company) to make any
computation required by this Section 8, and a certificate signed by
such firm shall be conclusive evidence of the correctness of such
adjustment.
(k) In the event that at any time, as a result of an
adjustment made pursuant to Subsection (a) above, the Holder of this
Warrant thereafter shall become entitled to receive any shares of the
Company, other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this 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 Common
Stock contained in Subsections (a) to (i), inclusive above.
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(l) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the similar
Warrants initially issuable pursuant to this Agreement.
SECTION 9. REDEMPTION.
(a) On not less than thirty (30) days written notice (the
"Redemption Notice"), to Registered Holders of the Warrants being
redeemed, the Warrants may be redeemed, at the option of the Company,
at a redemption price of $0.05 per Warrant, provided (i) the market
price (determined in accordance with section 11 hereof) shall exceed
$8.00 for the 20 consecutive trading days ending on the fifth trading
day prior to the date of the Redemption Notice (the "Target Price"),
subject to adjustment as set forth in Section 9(f) hereof and (ii) a
registration statement covering the Warrants and the Warrant Shares
filed under the Securities Act of 1933, as amended (the "Act") has been
declared effective and remains effective on the date fixed for
redemption of the Warrants (the "Redemption Date").
(b) If the conditions set forth in Section 9(a) are met, and
the Company desires to exercise its right to redeem the Warrants, it
shall mail a Redemption Notice to each of the Registered Holders of the
Warrants to be redeemed, first class, postage prepaid, not later than
the thirtieth day before the date fixed for redemption, at their last
address as shall appear on the records maintained pursuant to Section
6(b). Any notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given whether or not the
Registered Holder receives such notice.
(c) The Redemption Notice shall specify (i) the redemption
price, (ii) the Redemption Date, (iii) the place where the Warrant
Certificates shall be delivered and the redemption price paid, and (iv)
that the right to exercise the Warrant shall terminate at 5:00 P.M.
(New York time) on the business day immediately preceding the
Redemption Date. No failure to mail such notice nor any defect therein
or in the mailing thereof shall affect the validity of the proceedings
for such redemption except as to a Registered Holder (a) to whom notice
was not mailed or (b) whose notice was defective. An affidavit of the
Warrant Agent or of the Secretary or an Assistant Secretary of the
Underwriter or the Company that notice of redemption has been mailed
shall, in the absence of fraud, be prima facie evidence of the facts
stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00
P.M. (New York time) on the business day immediately preceding the
Redemption Date. On and after the Redemption Date, Registered Holders
of the Warrants shall have no further rights except to receive, upon
surrender of the Warrant, the Redemption Price.
-12-
(e) From and after the Redemption Date, the Company shall, at
the place specified in the Redemption Notice, upon presentation and
surrender to the Company by or on behalf of the Registered Holder
thereof of one or more Warrant Certificates evidencing Warrants to be
redeemed, deliver or cause to be delivered to or upon the written order
of such Registered Holder a sum in cash equal to the Redemption Price
of each such Warrant. From and after the Redemption Date and upon the
deposit or setting aside by the Company of a sum sufficient to redeem
all the Warrants called for redemption, such Warrants shall expire and
become void and all rights hereunder and under the Warrant
Certificates, except the right to receive payment of the Redemption
Price, shall cease.
(f) If the shares of the Company's Common Stock are subdivided
or combined into a greater or smaller number of shares of Common Stock,
the Target Price shall be proportionally adjusted by the ratio which
the total number of shares of Common Stock outstanding immediately
prior to such event bears to the total number of shares of Common Stock
to be outstanding immediately after such event.
SECTION 10. REGISTRATION UNDER THE SECURITIES ACT OF 1933. The
Company agrees to register the Warrants and the Warrant Shares for resale under
the Securities Act of 1933, as amended (the "Act") on the terms and subject to
the conditions set forth in Section IV of the Subscription Agreement between the
Company and each of the investors in the Private Placement.
SECTION 11. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
(a) If the number of shares of Common Stock purchasable upon
the exercise of each Warrant is adjusted pursuant to Section 8 hereof,
the Company shall nevertheless not be required to issue fractions of
shares, upon exercise of the Warrants or otherwise, or to distribute
certificates that evidence fractional shares. With respect to any
fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of such fractional share,
determined as follows:
(A) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges
on such exchange or listed for trading on the Nasdaq National
Market System ("NMS"), the current market value shall be the
last reported sale price of the Common Stock on such exchange
on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day or no closing
sale price is quoted, the average of the closing bid and asked
prices for such day on such exchange or system; or
(B) If the Common Stock is listed in the
over-the-counter market (other than on NMS) or admitted to
unlisted trading privileges, the current market value shall be
the mean of the last reported bid and asked prices reported by
the
-13-
National Quotation Bureau, Inc. on the last business day
prior to the date of the exercise of this Warrant; or
(C) If the Common Stock is not so listed or admitted
to unlisted trading privileges and bid and asked prices are
not so reported, the current market value shall be an amount
determined in such reasonable manner as may be prescribed by
the Board of Directors of the Company.
SECTION 12. WARRANT HOLDERS NOT DEEMED STOCKHOLDERS. No holder of
Warrants shall, as such, be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of such Warrants for any purpose whatsoever, nor shall anything contained herein
be construed to confer upon the holder of Warrants, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issue or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Holder shall have exercised such Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.
SECTION 13. RIGHTS OF ACTION. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Warrants, and
any Registered Holder of a Warrant, without consent of the Warrant Agent or of
the holder of any other Warrant, may, on his own behalf and for his own benefit,
enforce against the Company his right to exercise his Warrants for the purchase
of shares of Common Stock in the manner provided in the Warrant Certificate and
this Agreement.
SECTION 14. AGREEMENT OF WARRANT HOLDERS. Every holder of a Warrant, by
his acceptance thereof, consents and agrees with the Company, the Warrant Agent
and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books
of the Warrant Agent by the Registered Holder thereof in person or by
his attorney duly authorized in writing and only if the Warrant
Certificates representing such Warrants are surrendered at the office
of the Warrant Agent, duly endorsed or accompanied by a proper
instrument of transfer satisfactory to the Warrant Agent and the
Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) The Company may deem and treat the person in whose name
the Warrant Certificate is registered as the holder and as the
absolute, true and lawful owner of the Warrants represented thereby for
all purposes, and the Company shall not be affected by any notice or
knowledge to the contrary, except as otherwise expressly provided in
Section 7 hereof.
-14-
SECTION 15. CANCELLATION OF WARRANT CERTIFICATES. If the
Company shall purchase or acquire any Warrant or Warrants, the Warrant
Certificate or Warrant Certificates evidencing the same shall thereupon be
canceled by it and retired. The Warrant Agent shall also cancel Common Stock
following exercise of any or all of the Warrants represented thereby or
delivered to it for transfer, splitup, combination or exchange.
SECTION 16. CONCERNING THE WARRANT AGENT.
(a) The Warrant Agent acts hereunder as agent and in a
ministerial capacity for the Company, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent shall
not, by issuing and delivering Warrant Certificates or by any other act
hereunder be deemed to make any representations as to the validity,
value or authorization of the Warrant Certificates or the Warrants
represented thereby or of any securities or other property delivered
upon exercise of any Warrant or whether any stock issued upon exercise
of any Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay the Company, as
provided in Section 4, all moneys received by the Warrant Agent upon
the exercise of such Warrants. The Warrant Agent shall, upon request of
the Company from time to time, deliver to the Company such complete
reports of registered ownership of the Warrants and such complete
records of transactions with respect to the Warrants and the shares of
Common Stock as the Company may request. The Warrant Agent shall also
make available to the Company and Commonwealth for inspection by their
agents or employees, from time to time as either of them may request,
such original books of accounts and record (including original Warrant
Certificates surrendered to the Warrant Agent upon exercise of
Warrants) as may be maintained by the Warrant Agent in connection with
the issuance and exercise of Warrants hereunder, such inspections to
occur at the Warrant Agent's office as specified in Section 18, during
normal business hours.
(c) The Warrant Agent shall not at any time be under any duty
or responsibility to any holder of Warrant Certificates to make or
cause to be made any adjustment of the Exercise Price provided in this
Agreement, or to determine whether any fact exists which may require
any such adjustments, or with respect to the nature or extent of any
such adjustment, when made, or with respect to the method employed in
making the same. It shall not (i) be liable for any recital or
statement of facts contained herein or for any action taken, suffered
or omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine and
to have been signed or presented by the proper party or parties, (ii)
be responsible for any failure on the part of the Company to comply
with any of its covenants and obligations contained in this Agreement
or in any Warrant Certificate, or (iii) be liable for any act or
omission in connection with this Agreement except for its own
negligence or wilful misconduct.
-15-
The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good
faith in accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction,
order or demand of the Company shall be sufficiently evidenced by an
instrument signed by the Chairman of the Board, Chief Executive
Officer, President, any Vice President, its Secretary, or Assistant
Secretary, (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any
action taken, suffered or omitted by it in accordance with such notice,
statement, instruction, request, direction, order or demand believed by
it to be genuine.
(e) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its
reasonable expenses hereunder; it further agrees to indemnify the
Warrant Agent and save it harmless against any and all losses, expenses
and liabilities, including judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the execution of its
duties and powers hereunder except losses, expenses and liabilities
arising as a result of the Warrant Agent's negligence or wilful
misconduct.
(f) The Warrant Agent may resign its duties and be discharged
from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own negligence or wilful
misconduct), after giving 30 days' prior written notice to the Company.
At least 15 days prior to the date such resignation is to become
effective, the Warrant Agent shall cause a copy of such notice of
resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation, or any
inability of the Warrant Agent to act as such hereunder, the Company
shall appoint a new warrant agent in writing. If the Company shall fail
to make such appointment within a period of 15 days after it has been
notified in writing of such resignation by the resigning Warrant Agent,
then the Registered Holder of any Warrant Certificate may apply to any
court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by
such a court, shall be a bank or trust company having a capital and
surplus, as shown by its last published report to its stockholders, of
not less than $10,000,000 or a stock transfer company. After acceptance
in writing of such appointment by the new warrant agent is received by
the Company, such new warrant agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the
resigning Warrant Agent. Not later than the effective date of any such
appointment the Company shall file notice thereof with the
-16-
resigning Warrant Agent and shall forthwith cause a copy of such notice
to be mailed to the Registered Holder of each Warrant Certificate.
(g) Any corporation into which the Warrant Agent or any new
warrant agent may be converted or merged or any corporation resulting
from any consolidation to which the Warrant Agent or any new warrant
agent shall be a party or any corporation succeeding to the trust
business of the Warrant Agent shall be a successor warrant agent under
this Agreement without any further act, provided that such corporation
is eligible for appointment as successor to the Warrant Agent under the
provisions of the preceding paragraph. Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be
mailed to the Company and to the Registered Holder of each Warrant
Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and
any of its or their officers or directors, may buy and hold or sell
Warrants or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like effects
as though it were not Warrant Agent. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for
any other legal entity.
SECTION 17. MODIFICATION OF AGREEMENT. Subject to the provisions of
Section 4(b), the parties hereto may by supplemental agreement make any changes
or corrections in this Agreement (i) that it shall deem appropriate to cure any
ambiguity or to correct any defective or inconsistent provision or manifest
mistake or error herein contained; (ii) to reflect an increase in the number of
Warrants which are to be governed by this Agreement resulting from an increase
in the size of the Private Placement; (iii) to reflect an increase in the number
of Warrants which are to be governed by this Agreement resulting from the
conversion of warrants issued to the placement agent of the Private Placement or
its designees; or (iv) that it may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in writing of the
Registered Holders of Warrant Certificates representing not less than 50% of the
Warrants then outstanding; and provided, further, that no change in the number
or nature of the securities purchasable upon the exercise of any Warrant, or the
Exercise Price therefor, or the acceleration of the Warrant Expiration Date,
shall be made without the consent in writing of the Registered Holder of the
Warrant Certificate representing such Warrant, other than such changes as are
specifically prescribed by this Agreement as originally executed.
SECTION 18. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail, postage
prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company, at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
-17-
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer; if to the Warrant Agent, at
its Corporate Office and if to Commonwealth, at Commonwealth Associates,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
SECTION 19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
SECTION 20. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company and the Warrant Agent (and their respective
successors and assigns) and the holders from time to time of Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer upon any other person any right, remedy or claim, in equity or at law, or
to impose upon any other person any duty, liability or obligation.
SECTION 21. TERMINATION. This Agreement shall terminate on the earlier
to occur of (i) the close of business on the Expiration Date of all the
Warrants; or (iii) the date upon which all Warrants have been exercised.
SECTION 22. COUNTERPARTS. This Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
-18-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
iPARTY CORP.
By: __________________________________
▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
COMMONWEALTH ASSOCIATES, L.P.
By: Commonwealth Associates Management Corp., its
general partner
By: __________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
By: _______________________________
Authorized Officer
-19-
THIS WARRANT AND ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS EXERCISE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED
UNTIL (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (THE "ACT")
SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO, OR (2) RECEIPT BY THE ISSUER
OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT
THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER NOR IS SUCH TRANSFER IN VIOLATION OF ANY APPLICABLE STATE SECURITIES
LAWS.
No. PWC _____ Warrants
VOID AFTER SEPTEMBER ____ , 2005
WARRANT CERTIFICATE FOR PURCHASE
OF COMMON STOCK
iPARTY CORP.
This certifies that FOR VALUE RECEIVED
________________________ or registered assigns (the "Registered Holder") is the
owner of the number of Warrants ("Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms and
conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.001 par value ("Common Stock") of iParty Corp., a Delaware corporation (the
"Company") at any time commencing September 10, 2000 and prior to the Expiration
Date (as hereinafter defined), upon the presentation and surrender of this
Warrant Certificate with the Subscription Form on the reverse hereof duly
executed, at the corporate office of Continental Stock Transfer & Trust Company,
as Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment
of an amount equal to $2.00 for each Warrant (the "Exercise Price") in lawful
money of the United States of America in cash or by official bank or certified
check made payable to iParty Corp. The Company may, at its election, reduce the
Exercise Price.
This Warrant Certificate and each Warrant represented hereby
are issued pursuant to and are subject in all respects to the terms and
conditions set forth in the Warrant Agreement (the "Warrant Agreement"), dated
September 10, 1999 by and among the Company, the Warrant Agent and Commonwealth
Associates, L.P.
In the event of certain contingencies provided for in the
Warrant Agreement, the Exercise Price or the number of shares of Common Stock
subject to purchase upon the exercise of each Warrant represented hereby are
subject to modification or adjustment.
A-1
Each Warrant represented hereby is exercisable at the option
of the Registered Holder, but no fractional shares of Common Stock will be
issued. In the case of the exercise of less than all the Warrants represented
hereby, the Company shall cancel this Warrant Certificate upon the surrender
hereof and shall execute and deliver a new Warrant Certificate or ▇▇▇▇▇▇
Certificates of like tenor, which the Warrant Agent shall countersign, for the
balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M. (New York
time) on September 10, 2005. If such date shall in the State of New York be a
holiday or a day on which the banks are authorized to close, then the Expiration
Date shall mean 5:00 P.M. (New York time) the next following day which in the
State of New York is not a holiday or a day on which banks are authorized to
close. The Company may, at its election, extend the Expiration Date.
This Warrant Certificate is exchangeable, upon the surrender
hereof by the Registered Holder at the corporate office of the Warrant Agent,
for a new Warrant Certificate or Warrant Certificates of like tenor representing
an equal aggregate number of Warrants, each of such new Warrant Certificates to
represent such number of Warrants as shall be designated by such Registered
Holder at the time of such surrender. Upon due presentment with any tax or other
governmental charge imposed in connection therewith, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the
Registered Holder shall not be entitled to any of the rights of a stockholder of
the Company, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided in the Warrant
Agreement.
The Warrants represented hereby may be redeemed at the option
of the Company, at a redemption price of $.05 per Warrant at any time, provided
the market price (as defined in the Warrant Agreement) for the Common Stock
shall exceed $8.00 per share. Notice of redemption shall be given not later than
the thirtieth day before the date fixed for redemption, all as provided in the
Warrant Agreement. On and after the date fixed for redemption, the Registered
Holder shall have no rights with respect to the Warrants represented hereby
except to receive the $.05 per Warrant upon surrender of this Warrant
Certificate.
Prior to due presentment for registration of transfer hereof,
the Company may deem and treat the Registered Holder as the absolute owner
hereof and of each Warrant represented hereby (notwithstanding any notations of
ownership or writing hereon made by anyone other than a duly authorized officer
of the Company) for all purposes and shall not be affected by any notice to the
contrary.
A-2
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed, manually or in facsimile by two of its officers
thereunto duly authorized and a facsimile of its corporate seal to be imprinted
hereon.
iPARTY CORP.
Dated: ______________
By:_____________________________
By:______________________________
[seal]
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
By:______________________________
A-3
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to
exercise _____________ Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
--------------------
--------------------
--------------------
--------------------
[please print or type name and address]
and be delivered to
--------------------
--------------------
--------------------
--------------------
[please print or type name and address]
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
Dated: ______________________
X______________________
-----------------
------------------
Address
----------------------
Taxpayer Identification Number
--------------------------
Signature Guaranteed
A-4
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, __________________ hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
--------------------
--------------------
--------------------
--------------------
[please print or type name and address]
_________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
____________________________________ _______________________________ Attorney to
transfer this Warrant Certificate on the books of the Company, with full power
of substitution in the premises.
Dated: ____________________
X________________________
Signature Guaranteed
-------------------------
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.
A-5