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EXHIBIT 3
WARRANT
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY
JURISDICTION, AND MUST BE HELD INDEFINITELY UNLESS THEY ARE
TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS, OR
AFTER RECEIPT OF AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
SATISFACTORY TO FORTUNE FINANCIAL, INC., TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED AND THE TRANSFER DOES NOT VIOLATE ANY
APPLICABLE SECURITIES LAW.
WARRANT TO PURCHASE COMMON STOCK OF
FORTUNE FINANCIAL, INC.
FORTUNE FINANCIAL, INC., a Florida corporation (hereinafter called the
"Company"), for value received hereby certifies that Mid-Ohio Securities Corp.,
FBO R. Lee Smith (Acct. 15051) or assigns ("Purchaser") has the right at any
time, and from time to time, prior to December 23, 2003, as set forth in and
subject to Section 2.1 hereof, to purchase 330,579 fully paid and non-assessable
shares of Common Stock, $.025 par value, of the Company (hereinafter called
"Common Stock") at the price set forth herein, all as provided herein and upon
compliance with and subject to the conditions set forth herein.
ARTICLE I
TRANSFER
Section 1.1. TRANSFER BOOKS. The Company shall maintain books for the
transfer and registration of this Warrant.
Section 1.2. TRANSFER. The Company, from time to time, shall register the
transfer of this Warrant in the books to be maintained by the Company for that
purpose upon surrender at the principal office of the Company of this Warrant
properly endorsed or accompanied by appropriate instruments of transfer and
written instructions for transfer. Upon any such transfer, a new Warrant shall
be issued to the transferee and the
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surrendered Warrant shall be canceled by the Company. The Company may require
the payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any such transfer.
Section 1.3. TRANSFER RESTRICTIONS. This Warrant, and except as set forth
in any registration rights agreement between the Company and Purchaser, the
Common Stock underlying this Warrant, will not be registered under the
Securities Act of 1933, as amended (the "1933 Act"), or any securities act of
any state or other jurisdiction, and is being issued in reliance on registration
exemptions under such statutes for private offerings. This Warrant or any of the
underlying shares of Common Stock may not be sold or otherwise transferred
except in accordance with the 1933 Act and all other applicable securities laws,
and prior to any transfer (other than pursuant to an effective registration
statement under the 1933 Act and otherwise in compliance with applicable law)
the holder must furnish to the Company a written opinion of counsel, in form and
substance satisfactory to the Company, to the effect that registration under the
1933 Act is not required and that all requisite action has been taken under all
applicable securities laws in connection with the proposed transfer.
ARTICLE II
NUMBER OF SHARES; WARRANT PRICE; DURATION;
AND EXERCISE OF WARRANT
Section 2.1. NUMBER OF SHARES; WARRANT PRICE; AND DURATION. This Warrant
was issued pursuant to a Securities Purchase Agreement of even date herewith
between the Company and Purchaser (the "Loan Agreement") and contemporaneously
with the issuance of a Promissory Note in the amount of $800,000 (the "Note")
issued pursuant to the Loan Agreement. This Warrant entitles the registered
holder thereof, subject to the provisions hereof, to purchase from the Company
at any time and from time to time (after receipt of approval of the Company's
shareholders if required by NASD rules) prior to December 31, 2003, 330,579
shares of Common Stock, subject to adjustment as provided in Article III hereof,
for a price per share of Common Stock equal to $2.42 per share, less the Book
Value Adjustment as hereinafter defined, and as further adjusted hereby from
time to time, payable in full at the time of purchase. The Book Value Adjustment
means the amount per outstanding share of Common Stock by which the book value
of the Company's outstanding Common Stock is increased or reduced as a result of
(a) the financial impact of any reinsurance arbitration proceeding pending on
the date of this Warrant and (b) any increase or decrease in the Company's loss
reserves for periods ending on or before September 30, 2000; in each case
determined by the Company's independent public accountants on or before the
completion of their audit of the Company's financial statements for the year
ending December 31, 2001. The term "Warrant Price" as used herein refers to the
foregoing price per share as adjusted hereby and in effect from time to time.
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Section 2.2. EXERCISE.
(A) This Warrant may be exercised, in whole or in part, by
surrendering this Warrant, at the principal office of the Company, with the
Election to Exercise form set forth at the end hereof duly executed, and by
paying in full, the Warrant Price for each share of Common Stock as to which
this Warrant is exercised and any applicable taxes, other than taxes that the
Company is required to pay hereunder. Such payment may be (i) in cash or by
cashier's or bank check, (ii) by surrender of the Note with an outstanding
amount (principal and interest) equal to the exercise price or (iii) if the
Common Stock is at the time traded on a national securities exchange or a Nasdaq
market, by making a cashless exercise. Upon exercise by surrender of a Note, if
the Purchaser does not elect to convert any portion of the outstanding interest,
then the Company shall pay the accrued interest under such Note surrendered in
cash within five (5) business days of such surrender and if the Purchaser
surrenders only a portion of any Note, then the Company shall reissue a
substitute Note for the amount not surrendered. Upon a cashless exercise, the
Purchaser shall receive shares of Common Stock on a net basis such that, without
the payment of any funds, the Purchaser shall surrender this Warrant in exchange
for the number of shares of Common Stock equal to the product of (i) the number
of shares of Common Stock as to which this Warrant is being exercised,
multiplied by (ii) a fraction, the numerator of which is the aggregate Market
Price of such Common Stock less the aggregate then applicable exercise price,
and the denominator of which is such aggregate Market Price. In respect of such
calculation, the term Market Price shall mean at any applicable date (i) the
last reported sale price of the Common Stock, or, (ii) in case no such reported
sale takes place on such day, the average of the last reported sales prices for
the last three (3) trading days, in either case, as officially reported on the
Nasdaq market or on such other principal national securities exchange on which
the Common Stock is then listed or admitted to trading.
(B) As soon as practicable after the exercise or partial
exercise of this Warrant, the Company shall cause to be issued to or upon the
order of the holder of this Warrant a certificate or certificates for the number
of full shares of Common Stock to which he is entitled, registered in such name
or names as may be directed by him, and, if applicable, a substitute Warrant for
the number of shares not exercised.
(C) Anything contained herein to the contrary notwithstanding,
the Company shall not be required to issue any fraction of a share in connection
with the exercise of this Warrant, but in any case where the holder hereof
would, except for the provisions of this Section 2.2, be entitled under the
terms of this Warrant to receive a fraction of a share upon the exercise hereof,
the Company shall, upon the exercise of this Warrant and receipt of the Warrant
Price, issue a certificate for the largest number of full shares of Common Stock
then called for hereby and pay a sum in cash equal to the market value of such
fraction of a share.
(D) All shares of Common Stock issued upon the exercise of
this Warrant shall be validly issued, fully paid and non-assessable, and the
Company shall pay all taxes in respect of the issue thereof. The Company shall
not be required, however, to pay any tax imposed in connection with any transfer
involved in the issuance of a certificate for shares
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of Common Stock or any other securities in any name other than that of the
holder of this Warrant; and in such case the Company shall not be required to
issue or deliver any such certificate until such tax shall have been paid.
(E) Each person in whose name any such certificate for shares
of Common Stock is issued shall for all purposes be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the purchase price and any applicable taxes was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
ARTICLE III
ADJUSTMENT OF SHARES OF COMMON STOCK PURCHASABLE
AND WARRANT PRICE
Section 3.1 SPECIAL DEFINITIONS. For purposes of this Article III, the
following definitions shall apply:
(A) "Option" shall mean any right, option or warrant to
subscribe for, purchase or otherwise acquire shares of
Common Stock or Convertible Securities.
(B) "Original Issue Date" shall mean the date on which this
Warrant is first issued.
(C) "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or
indirectly convertible into or exchangeable for Common
Stock.
(D) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Section 3.2 hereof,
deemed to be issued) by the Company after the Original Issue
Date other than the shares of Common Stock issued upon the
exercise of any of the issued options or other convertible
securities described in the Loan Agreement ("Permitted
Options").
(E) "Rights to Acquire Common Stock" (or "Rights") shall mean
all rights whenever issued by the Company to acquire Common
Stock by exercise of a warrant, option or similar call or
conversion of any existing instruments, in either case for
consideration fixed, in amount or by formula, as of the date
of issuance other than Permitted Options.
Section 3.2 ISSUE OF SECURITIES DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON
STOCK. If the Company at any time or from time to time after the Original Issue
Date shall issue any Options or Convertible Securities or other Rights to
Acquire Common Stock, then the
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maximum number of shares of Common Stock (as set forth in the instrument
relating thereto without regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the exercise of such
Options, Rights or, in the case of Convertible Securities, the conversion or
exchange of such Convertible Securities, shall be deemed to be Additional Shares
of Common Stock issued as of the time of such issue, provided that Additional
Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share (determined pursuant to Section 3.4 hereof) of such
Additional Shares of Common Stock would be less than the Warrant Price on the
date of and immediately prior to such issue, or such record date, as the case
may be, and provided further that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) No further adjustment in the number of shares of Common
Stock issuable upon exercise of the Warrant shall be made
upon the subsequent issue of shares of Common Stock upon the
exercise of such Rights or conversion or exchange of such
Convertible Securities;
(B) Upon the expiration or termination of any unexercised Option
or Right prior to exercise of this Warrant, the number of
shares of Common Stock issuable upon exercise of the Warrant
shall be readjusted, and the Additional Shares of Common
Stock deemed issued as the result of the original issue of
such Option or Right shall not be deemed issued for the
purposes of any subsequent adjustment of the number of
shares of Common Stock issuable upon exercise of the
Warrant; and
(C) In the event of any change in the number of shares of Common
Stock issuable upon the exercise, conversion or exchange of
any Option, Right or Convertible Security, including, but
not limited to, a change resulting from the anti-dilution
provisions thereof, the number of shares of Common Stock
issuable upon exercise of the Warrant shall forthwith be
readjusted (but not downwards) to such number of shares of
Common Stock issuable upon exercise of the Warrant as would
have obtained had the adjustment that was made upon the
issuance of such Option, Right or Convertible Security not
exercised or converted prior to such change been made upon
the basis of such change, but no further adjustment shall be
made for the actual issuance of Common Stock upon the
exercise or conversion of any such Option, Right or
Convertible Security.
Section 3.3. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES ISSUABLE UPON
EXERCISE. Except in the case of shares issued as a stock dividend described in
Section 3.6, issued upon a stock split or combination as described in Section
3.5, if the Company shall at any time after the Original Issue Date issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 3.2 hereof) without consideration or for
a consideration per share less than the Warrant Price on the date of and
immediately prior to such issue, then and in such event, the Warrant Price of
each Warrant shall be decreased, concurrently with such issue to an amount equal
to the
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consideration per share received by the Company for the Additional Shares of
Common Stock so issued or deemed issued. If the Warrant Price shall be so
reduced or if the Warrant Price is reduced as a result of a Book Value
Adjustment, then the number of shares of Common Stock issuable upon exercise of
this Warrant shall be increased as of such reduction to the product obtained by
multiplying the number of shares of Common Stock originally issuable upon
exercise of this Warrant by a fraction:
- the numerator of which shall be the original Warrant Price,
and
- the denominator of which shall be the Warrant Price in
effect immediately after the time of such issuance.
Section 3.4. DETERMINATION OF CONSIDERATION. For purposes of this Article
III, the consideration received by the Company for the issue of any Additional
Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
(1) insofar as it consists of cash, be computed at the
aggregate of cash received by the Company;
(2) insofar as it consists of property other than cash, be
computed at the fair market value thereof at the time
of such issue, as determined in good faith by the
Company's Board of Directors; and
(3) in the event Additional Shares of Common Stock are
issued together with other shares or securities or
other assets of the Company for consideration which
covers both, be the proportion of such consideration so
received, computed as provided in clauses (1) and (2)
above, as determined in good faith by the Company's
Board of Directors.
(B) Options, Rights and Convertible Securities: The
consideration per share received by the Company for
Additional Shares of Common Stock deemed to have been issued
pursuant to Section 3.2 hereof relating to Options, Rights
and Convertible Securities, shall be determined by dividing
- the total amount, if any, received or receivable by the
Company as consideration for the issue of such Options,
Rights or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to
the Company upon the exercise of such Options, Rights
or the conversion or exchange of such Convertible
Securities, by
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- the maximum number of shares of Common Stock as set
forth in the instruments relating thereto (without
regard to any provision contained therein for a
subsequent adjustment of such number) issuable upon the
exercise of such Options or Rights or the conversion or
exchange of such Convertible Securities.
Section 3.5. ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company
shall at any time or from time to time after the Original Issue Date effect a
subdivision of the outstanding Common Stock, the number of shares of Common
Stock issuable upon exercise of the Warrant immediately before that subdivision
shall be proportionately increased. If the Company shall at any time or from
time to time after the Original Issue Date combine the outstanding shares of
Common Stock, the number of shares of Common Stock issuable upon exercise of the
Warrant immediately before the combination shall be proportionately decreased.
In the event of any such subdivision or combination, the Warrant Price shall be
adjusted to equal: (i) the Warrant Price immediately prior to the occurrence of
any such event, (ii) multiplied by a fraction, (A) the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and
(B) the denominator of which is the number of shares of Common Stock outstanding
immediately after the adjustment. Any adjustment under this paragraph shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
Section 3.6. ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the
event the Company at any time or from time to time after the Original Issue Date
shall make or issue a dividend or other distribution payable in Additional
Shares of Common Stock, then and in each such event (i) the Warrant Price shall
be adjusted to equal: (i) the Warrant Price immediately prior to the occurrence
of any such event, (ii) multiplied by a fraction, (A) the numerator of which is
the number of shares of Common Stock outstanding immediately before such event
and (B) the denominator of which is the number of shares of Common Stock
outstanding immediately after the adjustment, and (ii) the number of shares of
Common Stock issuable upon exercise of the Warrant shall be increased as of the
time of such issuance, to the product obtained by multiplying the number of
shares of Common Stock originally issuable upon exercise of the Warrant by a
fraction:
- the numerator of which shall be the original Warrant
Price, and
- the denominator of which shall be the Warrant Price in
effect immediately after the time of such adjustment.
Section 3.7. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the
event the Company at any time or from time to time after the Original Issue Date
shall make or issue a dividend or other distribution payable in securities of
the Company other than shares of Common Stock, then and in each such event
provision shall be made so that the Warrantholder shall receive upon exercise
hereof in addition to the number of shares of Common Stock receivable thereupon,
the amount of securities of the Company that he would have received had this
Warrant been exercised on the date of such event and had thereafter, during the
period from the date of such event to and including the conversion
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date, retained such securities receivable by them as aforesaid during such
period given application to all adjustments called for during such period, under
this Article III.
Section 3.8. ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE, OR SUBSTITUTION. If
the Common Stock issuable upon the exercise of this Warrant shall be changed
into the same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for above, or a
reorganization, merger, consolidation, share exchange or sale of assets provided
for below), then and in each such event the holder of this Warrant shall have
the right thereafter to exercise this Warrant for the kind and amount of shares
of stock and other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of Common
Stock into which this Warrant might have been converted immediately prior to
such reorganization, reclassification, or change, all subject to further
adjustment as provided herein.
Section 3.9. ADJUSTMENT FOR MERGER OR REORGANIZATION, ETC. In case of any
consolidation, merger or share exchange of the Company with or into another
corporation or the sale of all or substantially all of the assets of the Company
to another corporation, then this Warrant shall thereafter be convertible into
the kind and amount of shares of stock or other securities or property to which
a holder of the number of shares of Common Stock of the Company deliverable upon
exercise of this Warrant would have been entitled upon such consolidation,
merger or sale; and, in such case, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions in this Article III to the end that the provisions set forth in
this Article III (including provisions with respect to changes in and other
adjustments of the number of shares of Common Stock issuable upon exercise of
the Warrant) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the exercise of this Warrant.
Section 3.10. NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, share exchange, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Article III and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holder of this
Warrant against impairment.
Section 3.11. CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the number of shares of Common Stock issuable upon
exercise of this Warrant pursuant to this Article III, the Company and the
Warrantholder shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and shall jointly prepare a certificate setting
forth such adjustment and showing in detail the facts upon which such adjustment
or readjustment is based and shall file a copy of such certificate with its
corporate records. The Company shall, upon the written request at any time of
the holder of this Warrant, furnish or cause to be furnished to such holder a
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similar certificate setting forth (1) such adjustments and readjustments, (2)
the Warrant Price then in effect, and (3) the number of shares of Common Stock
and the amount, if any, of other property which then would be received upon the
exercise of this Warrant. Despite such adjustment or readjustment, the form of
this Warrant need not be changed in order for the adjustments or readjustments
to be valued in accordance with the provisions hereof, which shall control.
Section 3.12. NOTICE OF RECORD DATE. In the event:
(A) that the Company declares a dividend (or any other distribution)
on its Common Stock;
(B) that the Company subdivides or combines its outstanding shares of
Common Stock;
(C) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of
Common Stock or a stock dividend or stock distribution thereon),
or of any consolidation, merger or share exchange of the Company
into or with another corporation, or of the sale of all or
substantially all of the assets of the Company; or
(D) of the involuntary or voluntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at its principal office and shall cause
to be mailed to the holders of this Warrant at its last address as shown on the
records of the Company, at least 20 days prior to the record date specified in
(A) below or 20 days before the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution, subdivision or
combination, or, if a record is not to be taken, the date as to
which the holders of Common Stock of record to be entitled to
such dividend, distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification, consolidation, merger,
share exchange, sale, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, consolidation,
merger, sale, dissolution or winding up.
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ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF THIS WARRANT
Section 4.1. NO RIGHTS AS SHAREHOLDER. This Warrant does not entitle the
holder hereof to any of the rights of a shareholder of the Company.
Section 4.2. LOST WARRANT, ETC.. If this Warrant is lost, stolen, mutilated
or destroyed, the Company may, upon receipt of a proper affidavit (and surrender
of any mutilated Warrant Certificate) and bond of indemnity in form and amount
and with corporate surety satisfactory to the Company in each instance
protecting the Company, issue a new Warrant of like tenor and date. Any such new
Warrant shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate shall be at any time enforceable by anyone.
Section 4.3. AUTHORIZED SHARES. The Company shall at all times have
authorized for issuance upon exercise of this Warrant a number of shares of
Common Stock sufficient to permit the exercise in full of this Warrant.
ARTICLE V
MISCELLANEOUS
Section 5.1. TAXES AND CHARGES. The Company will from time to time promptly
pay all taxes and charges that may be imposed upon the Company in respect of the
issuance or delivery of shares of Common Stock upon the exercise of this
Warrant, but the Company shall not be obligated to pay any transfer taxes in
respect of this Warrant or such shares.
Section 5.2. ASSIGNS. All the covenants and provisions of this Warrant by
or for the benefit of the Company or the holder of this Warrant shall bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 5.3. NOTICES. All notices, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly given, when
delivered personally or three days after having been sent by certified mail
return receipt requested, postage prepaid, or upon transmission by telex,
telecopy, facsimile or similar electronic medium to the parties at the addresses
set forth in the Agreement (or at such other address for a party as shall be
specified by like notice).
Section 5.4. GOVERNING LAW. The validity, interpretation and performance of
this Warrant shall be governed by the laws of the State of Florida.
Section 5.5. THIRD PARTIES. Nothing in this Warrant expressed and nothing
that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
parties hereto and the holders of this Warrant any right, remedy or claim
hereunder or by reason of any covenant, condition, stipulation, promise or
agreement hereof, and all covenants, conditions,
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stipulations, promises and agreements in this Warrant shall be for the sole and
exclusive benefit of the parties hereto and their successors and of the holders
of this Warrant.
Section 5.6. WARRANTHOLDERS. The Company may deem and treat the person in
whose name this Warrant is registered as the absolute owner for all purposes
whatever (notwithstanding any notation of ownership or other writing thereon
made by anyone other than the Company) and the Company shall not be affected by
any notice to the contrary. The terms "Warrantholder" and holder of this Warrant
and all other similar terms used herein shall mean such person in whose name
this Warrant is registered on the books of the Company.
Section 5.7. HEADINGS. The Article and Section headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its President and attested by its Secretary.
<TABLE>
<S> <C>
Dated: November 15, 2000 FORTUNE FINANCIAL, INC., a Florida corporation
By: /s/ J. JOHN WORTMAN
-------------------------------------
President
Attest:__________________________________
Secretary
</TABLE>
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ELECTION TO EXERCISE
TO FORTUNE FINANCIAL, INC.:
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by this Warrant for, and to purchase thereunder, shares of
Common Stock, as provided for therein, and tenders herewith payment of the
purchase price in full in the form of cash or a check or notes in the amount of
$ .
Pursuant to the terms of the attached Warrant, the undersigned hereby
elects to make a Cashless Exercise as provided for in Section 2.2 of such
Warrant with respect to _____ shares of Common Stock. Please issue a certificate
or certificates for such shares of Common Stock and a replacement Warrant for
any portion not exercised in the name of, and pay any cash for any fractional
shares to:
<TABLE>
<S> <C>
Name_________________________________
INSERT SOCIAL SECURITY OR (Please Print Name and Address)
OTHER IDENTIFYING NUMBER
_________________________ Signature____________________________
Address______________________________
NOTE: The above signature should correspond
exactly with the name on the face of
this Warrant or with the name of assignee
appearing in the assignment form below.
</TABLE>
ASSIGNMENT
For value received, _________________________ hereby sells, assigns and
transfers unto ____________________________ the within Warrant, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint ___________________________ attorney, to transfer said Warrant on
the books of the within-named Company, with full power of substitution in the
premises.
Dated: __________________________
NOTE: The above signature should
correspond exactly with the
name on the face of this Warrant
