Exhibit 4.4
WARRANT AGENT AGREEMENT
This Warrant Agent Agreement, dated as of ___________, 2001 (this
"Agreement"), is by and between Crest View Inc., a Nevada corporation (the
"Company"), and Pacific Stock Transfer Company, a Nevada corporation, as warrant
agent (in such capacity, the "Warrant Agent").
WHEREAS, the Company proposes to issue and sell to the public up to
2,100,000 units (each, a "Unit"), each Unit consisting of one share of the
common stock, par value $.001 per share (the "Common Stock"), of the
Company and one-third (1/3) of a Class A Redeemable Common Stock Purchase
Warrant (each, a "Class A Warrant");
WHEREAS, each whole Class A Warrant will entitle its registered holder
to purchase from the Company one share of Common Stock and one Class B
Redeemable Common Stock Purchase Warrant (each, a "Class B Warrant"), upon
the terms and conditions as provided in this Agreement;
WHEREAS, each whole Class B Warrant will entitle the holder to
purchase from the Company one share of Common Stock, upon the terms and
conditions as provided in this Agreement; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, registration, transfer, exchange
and exercise of the Class A Warrants and Class B Warrants, and the Warrant
Agent is willing to so act, both upon the terms and conditions as provided
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the premises and the
mutual agreements set forth in this Agreement, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as warrant agent for the Company in accordance with the
instructions set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment.
Section 2. Form of Warrant Certificates; Exercise Price.
(a) (i) The text of the form of certificate (the "Class A Warrant
Certificate") to evidence each and every Class A Warrant and election form to be
printed on the reverse side of each and every Class A Warrant Certificate
substantially in the forms as attached as Exhibit A-1 to this Agreement.
(ii) Each Class A Warrant Certificate shall be executed on behalf of
the Company by the manual or facsimile signature of the present or any
future Chief Executive Officer, President or Vice President of the Company,
attested to by the manual or facsimile signature of the present or any
future Secretary or Assistant Secretary of the Company. Each Class A
Warrant Certificate shall be dated as of the issuance of the Class A
Warrant(s) evidenced by such Class A Warrant Certificate by the Warrant
Agent either upon initial issuance or upon transfer or exchange.
(iii) Each whole Class A Warrant shall entitle the registered holder
thereof to purchase one share of Common Stock and one Class B Warrant at an
exercise price of $6.00 (the "Class A Warrant Exercise Price") at any time
(the "Class A Warrant Exercise Period") commencing on the date (the
"Warrant Exercise Commencement Date") on which the United States Securities
and Exchange Commission (the "SEC") shall have declared effective the
registration statement (Registration Number: 333-45780) (the "Registration
Statement") pursuant to which the Units are being offered for sale to the
public by the Company and terminating at 5:00 p.m., Henderson, Nevada time
(the "Class A Warrant Exercise Termination Time"), on the date which is the
fourth anniversary of the Warrant Exercise Commencement Date, subject to
the provisions of Section 13 of this Agreement. In the event the Class A
Warrant Exercise Termination Time falls on a Saturday or Sunday, or on a
legal holiday on which the New York Stock Exchange is closed, then the
Class A Warrants shall expire at 5:00 p.m., Henderson, Nevada time, on the
next succeeding day on which the New York Stock Exchange is open.
Notwithstanding anything contained to the contrary in the Agreement, the
Company may, at any time up to the then applicable Class A Warrant Exercise
Termination Time, upon notice (a "Class A Warrant Extension Notice") to the
Warrant Agent, extend the Class A Warrant Exercise Termination Time to a
later date and time. The Warrant Agent shall forward a copy of each Class A
Warrant Extension Notice to each registered holder of a Class A Warrant
upon the Warrant Agent's receipt of such Class A Warrant Extension Notice.
(iv) The Class A Warrant Exercise Price and the number of shares of
Common Stock, but not the number of Class B Warrants, issuable upon
exercise of the Class A Warrants are subject to adjustment upon the
occurrence of certain events, all as hereinafter provided.
(b) (i) The text of the form of certificate (the "Class B Warrant
Certificate") to evidence each and every Class B Warrant and election form to be
printed on the reverse side of each and every Class B Warrant Certificate shall
be substantially in the forms as attached as Exhibit A-2 to this Agreement.
(ii) Each Class B Warrant Certificate shall be executed on behalf of
the Company by the manual or facsimile signature of the present or any
future Chief Executive Officer, President or Vice President of the Company,
attested to by the manual or facsimile signature of the present or any
future Secretary or Assistant Secretary of the Company. Each Class B
Warrant Certificate shall be dated as of the issuance of the Class B
Warrant(s)
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evidenced by such Class B Warrant Certificate by the Warrant Agent either
upon initial issuance or upon transfer or exchange.
(iii) Each whole Class B Warrant shall entitle the registered holder
thereof to purchase one share of Common Stock at an exercise price of $9.00
(the "Class B Warrant Exercise Price") at any time (the "Class B Warrant
Exercise Period") commencing on the Warrant Exercise Commencement Date and
terminating at 5:00 p.m., Henderson, Nevada time (the "Class B Warrant
Exercise Termination Time"), on the date which is the fifth anniversary of
the Warrant Exercise Commencement Date, subject to the provisions of
Section 13 of this Agreement. In the event the Class B Warrant Exercise
Termination Time falls on a Saturday or Sunday, or on a legal holiday on
which the New York Stock Exchange is closed, then the Class B Warrants
shall expire at 5:00 p.m., Henderson, Nevada time, on the next succeeding
day on which the New York Stock Exchange is open. Notwithstanding anything
contained to the contrary in the Agreement, the Company may, at any time up
to the then applicable Class B Warrant Exercise Termination Time, upon
notice (a "Class B Warrant Extension Notice") to the Warrant Agent, extend
the Class B Warrant Exercise Termination Time to a later date and time. The
Warrant Agent shall forward a copy of each Class B Warrant Extension Notice
to each registered holder of a Class B Warrant upon the Warrant Agent's
receipt of such Class B Warrant Extension Notice.
(iv) The Class B Warrant Exercise Price and the number of shares of
Common Stock issuable upon exercise of the Class B Warrants are subject to
adjustment upon the occurrence of certain events, all as hereinafter
provided.
Section 3. Countersignature and Registration.
(a) The Warrant Agent shall maintain books for the transfer and
registration of the Class A Warrants and Class B Warrants.
(b) From time to time during the offering period for the Units made
pursuant to the Registration Statement, and within two business days following
the completion of such offering period, the Company shall advise the Warrant
Agent in writing of the number of Units sold, the names, addresses and federal
taxpayer identification numbers, to the extent known, of the purchasers of such
Units and the number of Class A Warrants included in such Units sold to, and
being issued to, each such purchaser. Upon the initial issuance of the Class A
Warrants, the Warrant Agent shall issue and register the Class A Warrants in the
names of the respective holders of the Class A Warrants. Each Class A Warrant
Certificate shall be countersigned manually or by facsimile by the Warrant Agent
(or by any successor to the Warrant Agent then acting as warrant agent under
this Agreement) and shall not be valid for any purpose unless so countersigned.
Class A Warrant Certificates may, however, be so countersigned by the Warrant
Agent (or by its successor as Warrant Agent) and be delivered by the Warrant
Agent, notwithstanding that one or more of the persons whose manual or facsimile
signatures appear thereon as proper officers of the Company shall have ceased to
be such officers at the time of such countersignature or delivery.
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(c) Upon the initial issuance of a Class B Warrant, the Warrant Agent shall
issue and register such Class B Warrant in the name of the holder of such Class
B Warrant. Each Class B Warrant Certificate shall be countersigned manually or
by facsimile by the Warrant Agent (or by any successor to the Warrant Agent then
acting as warrant agent under this Agreement) and shall not be valid for any
purpose unless so countersigned. Class A Warrant Certificates may, however, be
so countersigned by the Warrant Agent (or by its successor as Warrant Agent) and
be delivered by the Warrant Agent, notwithstanding that one or more of the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature or delivery.
Section 4. Transfers and Exchanges.
(a) The Warrant Agent shall transfer, from time to time, any and all
outstanding Class A Warrants upon the books to be maintained by the Warrant
Agent for that purpose, upon surrender of the Class A Warrant Certificate
evidencing such Class A Warrants for transfer properly endorsed or accompanied
by appropriate instructions for transfer. Upon any such transfer, new Class A
Warrant Certificate(s) shall be issued to the transferee and the surrendered
Class A Warrant Certificate(s) shall be canceled by the Warrant Agent. Class A
Warrant Certificates so canceled shall be delivered by the Warrant Agent to the
Company from time to time upon the request of the Company. A Class A Warrant
Certificate may be exchanged at the option of the holder of such Class A Warrant
Certificate, when surrendered at the office of the Warrant Agent, for another
Class A Warrant Certificate, or other Class A Warrant Certificates of different
denominations of like tenor and evidencing in the aggregate a like number of
Class A Warrants.
(b) The Warrant Agent shall transfer, from time to time, any and all
outstanding Class B Warrants upon the books to be maintained by the Warrant
Agent for that purpose, upon surrender of the Class B Warrant Certificate
evidencing such Class B Warrants for transfer properly endorsed or accompanied
by appropriate instructions for transfer. Upon any such transfer, new Class B
Warrant Certificate(s) shall be issued to the transferee and the surrendered
Class B Warrant Certificate(s) shall be canceled by the Warrant Agent. Class B
Warrant Certificates so canceled shall be delivered by the Warrant Agent to the
Company from time to time upon the request of the Company. A Class B Warrant
Certificate may be exchanged at the option of the holder of such Class B Warrant
Certificate, when surrendered at the office of the Warrant Agent, for another
Class B Warrant Certificate, or other Class B Warrant Certificates of different
denominations of like tenor and evidencing in the aggregate a like number of
Class B Warrants.
Section 5. Exercise of Warrants.
(a) Subject to the provisions of this Agreement, each registered holder of
a Class A Warrant shall have the right, which may be exercised at any time
during the Class A Warrant Exercise Period, to purchase from the Company (and
the Company shall issue and sell to such registered holder of such Class A
Warrant) one fully paid and non-assessable share of Common Stock and one fully
paid and non-assessable Class B Warrant for every Class A Warrant owned by
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such holder upon the surrender to the Company at the office of the Warrant Agent
of the Class A Warrant Certificate evidencing such Class A Warrant, with the
form of election to purchase on the reverse side of such Class A Warrant
Certificate duly completed, dated and signed, and upon payment to the Company of
the applicable Class A Warrant Exercise Price, determined in accordance with the
provisions of Sections 9 and 10 of this Agreement, for the number of Class A
Warrants so exercised. Payment of such Class A Warrant Exercise Price shall be
made in cash or by certified check or bank draft payable to the order of the
Company, which cash, certified check or bank draft shall immediately be
delivered to the Company. Notwithstanding the provisions of the immediately
preceding sentence, payment of the Class A Warrant Exercise Price upon the
exercise of a Class A Warrant may be made in the form of services rendered
having a value equal to the amount of such Class A Warrant Exercise Price, the
delivery of a duly executed and enforceable promissory note in the principal
amount of such Class A Warrant Exercise Price or other form of consideration, in
each instance as approved, in advance of such exercise, by the Board of
Directors of the Company and certified as so approved by the Secretary of the
Company in writing to the Warrant Agent. Subject to the provisions of Section 6
of this Agreement, upon surrender of such duly completed, dated and signed Class
A Warrant Certificate(s) and payment of the applicable Class A Warrant Exercise
Price, the Company shall issue and cause to be delivered with all reasonable
dispatch to, or upon the written order of, the registered holder of such Class A
Warrant(s) and in such name(s) as such registered holder may designate, one or
more stock certificates evidencing the number of full shares of Common Stock and
one or more Class B Warrant Certificates evidencing the number of full Class B
Warrants so purchased upon the exercise of such Class A Warrants. Such stock
certificate(s) and Class B Warrant Certificate(s) shall be deemed to have been
issued, and any person so designated to be named on such stock certificate(s)
and Class B Warrant Certificate(s) shall be deemed to have become a registered
holder of such shares of Common Stock and Class B Warrants, as of the date of
the surrender of such duly completed, dated and signed Class A Warrant(s) and
payment of the applicable Class A Warrant Exercised Price as provided in this
paragraph 5(a). The right to exercise the Class A Warrants evidenced by each
Class A Warrant Certificate shall be exercisable, at the election of the
registered holder of such Class A Warrant Certificate, either as an entirety or
from time to time for a portion of the Class A Warrants specified on the
exercise form and, in the event that less than all of the Class A Warrants
evidenced by a Class A Warrant Certificate are exercised at any time prior to
the Class A Warrant Exercise Termination Time, one or more new Class A Warrant
Certificate(s) will be issued to the registered holder to evidence the remaining
number of Class A Warrants specified in such Class A Warrant Certificate so
surrendered. The Warrant Agent is hereby irrevocably authorized to countersign
and to deliver the required new Class A Warrant Certificate(s) pursuant to the
provisions of this paragraph 5(a) and of Section 3 of this Agreement and the
Company, whenever requested by the Warrant Agent, will supply the Warrant Agent
with Class A Warrant Certificates duly executed on behalf of the Company for
such purpose. Anything in the foregoing to the contrary notwithstanding, no
Class A Warrant will be exercisable unless, at the time of exercise, there is
effective with the SEC a registration statement under the Securities Act of
1933, as amended (the "Act"), covering the shares of Common Stock and Class B
Warrants issuable upon exercise of such Class A Warrant and such shares and
Class B Warrants have been so registered or qualified or deemed to be exempt
under the securities laws of the state of residence of the registered holder of
such Class A Warrant. The Company shall use its best efforts to have all shares
of Common Stock and Class B Warrants so registered or qualified through no
earlier than the Class A Warrant Exercise Termination Time.
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(b) Subject to the provisions of this Agreement, each registered holder of
a Class B Warrant shall have the right, which may be exercised at any time
during the Class B Warrant Exercise Period, to purchase from the Company (and
the Company shall issue and sell to such registered holder of such Class B
Warrant) one fully paid and non-assessable share of Common Stock for every Class
B Warrant owned by such holder upon the surrender to the Company at the office
of the Warrant Agent of the Class B Warrant Certificate evidencing such Class B
Warrant, with the form of election to purchase on the reverse side of such Class
B Warrant Certificate duly completed, dated and signed, and upon payment to the
Company of the applicable Class B Warrant Exercise Price, determined in
accordance with the provisions of Sections 9 and 10 of this Agreement, for the
number of Class B Warrants so exercised. Payment of such Class B Warrant
Exercise Price shall be made in cash or by certified check or bank draft payable
to the order of the Company, which cash, certified check or bank draft shall
immediately be delivered to the Company. Notwithstanding the provisions of the
immediately preceding sentence, payment of the Class B Warrant Exercise Price
upon the exercise of a Class B Warrant may be made in the form of services
rendered having a value equal to the amount of such Class B Warrant Exercise
Price, the delivery of a duly executed and enforceable promissory note in the
principal amount of such Class B Warrant Exercise Price or other form of
consideration, in each instance as approved, in advance of such exercise, by the
Board of Directors of the Company and certified as so approved by the Secretary
of the Company in writing to the Warrant Agent. Subject to the provisions of
Section 6 of this Agreement, upon surrender of such duly completed, dated and
signed Class B Warrant Certificate(s) and payment of the applicable Class B
Warrant Exercise Price, the Company shall issue and cause to be delivered with
all reasonable dispatch to, or upon the written order of, the registered holder
of such Class B Warrant(s) and in such name(s) as such registered holder may
designate, one or more stock certificates evidencing the number of full shares
of Common Stock so purchased upon the exercise of such Class B Warrants. Such
stock certificate(s) shall be deemed to have been issued, and any person so
designated to be named on such stock certificate(s) shall be deemed to have
become a registered holder of such shares of Common Stock, as of the date of the
surrender of such duly completed, dated and signed Class B Warrant(s) and
payment of the Class B Warrant Exercised Price as provided in this paragraph
5(b). The right to exercise the Class B Warrants evidenced by each Class B
Warrant Certificate shall be exercisable, at the election of the registered
holder of such Class B Warrant Certificate, either as an entirety or from time
to time for a portion of the Class B Warrants specified on the exercise form
and, in the event that less than all of the Class B Warrants evidenced by a
Class B Warrant Certificate are exercised at any time prior to the Class B
Warrant Exercise Termination Time, one or more new Class B Warrant
Certificate(s) will be issued to the registered holder to evidence the remaining
number of Class B Warrants specified in such Class B Warrant Certificate so
surrendered. The Warrant Agent is hereby irrevocably authorized to countersign
and to deliver the required new Class B Warrant Certificate(s) pursuant to the
provisions of this paragraph 5(b) and of Section 3 of this Agreement and the
Company, whenever requested by the Warrant Agent, will supply the Warrant Agent
with Class B Warrant Certificates duly executed on behalf of the Company for
such purpose. Anything in the foregoing to the contrary notwithstanding, no
Class B Warrant will be exercisable unless, at the time of exercise, there is
effective with the SEC a registration statement under the Act covering the
shares of Common Stock issuable upon exercise of such Class B Warrant and such
shares have been so registered or qualified or deemed to be exempt under the
securities laws of the state of residence of the registered holder of such Class
B
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Warrant. The Company shall use its best efforts to have all shares of Common
Stock so registered or qualified through no earlier than the Class B Warrant
Exercise Termination Time.
(c) The Company and Warrant Agent shall determine, in their sole and
absolute discretion, whether a Class A Warrant Certificate or Class B Warrant
Certificate has been duly completed, dated and signed to effect a valid exercise
of the Class A Warrants evidenced by such Class A Warrant Certificate or to
effect a valid exercise of the Class B Warrants evidenced by such Class B
Warrant Certificate, as the case may be. The Warrant Agent will provide the
Company with such information, in connection with the exercise of each Class A
Warrant and Class B Warrant, as the Company may reasonably request.
(d) The Company may at any time, during business hours, examine the records
of the Warrant Agent with respect to the Class A Warrants and Class B Warrants,
including the Warrant Agent's ledger of original Class A Warrant Certificates
and/or Class B Warrant Certificates returned to the Warrant Agent upon exercise
of Class A Warrants or Class B Warrants, as the case may be.
(e) The Warrant Agreement shall have the right to impose additional rules
regarding the valid exercise or transfer of Class A Warrants or Class B
Warrants, including requirements as to signature guarantees on warrant
certificates evidencing the Class A Warrants or Class B Warrants being so
exercised, assigned or transferred.
Section 6. Payment of Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of shares of Common Stock and Class B
Warrants issuable upon exercise of Class A Warrants and the initial issuance of
shares of Common Stock issuable upon exercise of Class B Warrants; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in (i) the issue or delivery of any
shares of Common Stock or Class B Warrants in a name other than that of the
registered holder of Class A Warrants in respect of which such shares and Class
B Warrants are issued or (ii) the issue or delivery of any shares of Common
Stock in a name other than that of the registered holder of Class B Warrants in
respect of which such shares are issued; and in either such case, neither the
Company nor the Warrant Agent shall be required to issue or deliver any
certificate evidencing shares of Common Stock, any Class A Warrants or any Class
B Warrants until the person requesting the same has paid to the Company the
amount of such tax or has established to the Company's satisfaction that such
tax has been paid.
Section 7. Mutilated or Missing Warrants. In case any Class A Warrant
Certificate or Class B Warrant Certificate shall be mutilated, lost, stolen or
destroyed, the Company may, in its discretion, issue and the Warrant Agent shall
countersign and deliver in exchange and substitution for and upon cancellation
of the mutilated warrant certificate or, in lieu of and in substitution for the
lost, stolen or destroyed warrant certificate, a new Class A Warrant Certificate
or Class B Warrant Certificate, as the case may be, of like tenor and
representing an equivalent right or interest, but only upon receipt of evidence
satisfactory to the Company and Warrant Agent of such loss, theft or destruction
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and, in case of a lost, stolen or destroyed warrant certificate, an indemnity,
if requested, also satisfactory to the Company and Warrant Agent. Applicants for
such substitute warrant certificates shall also comply with such other
reasonable regulations and pay such reasonable charges as the Company or Warrant
Agent may prescribe.
Section 8. Reservation and Issuance of Common Stock; Cancellation of Warrant
Certificates. There have been reserved, and the Company shall at all times keep
reserved, out of the authorized and unissued shares of Common Stock, a number of
shares of Common Stock sufficient to provide for the exercise of the rights of
purchase represented by both the Class A Warrants and Class B Warrants,
including those Class B Warrants that have yet to be issued due to the fact that
the Class A Warrants have yet to be exercised, and the transfer agent for the
shares of Common Stock and every subsequent transfer agent for any shares of
Common Stock issuable upon the exercise of any of the Class A Warrants and Class
B Warrants are irrevocably authorized and directed at all times to reserve such
number of authorized and unissued shares of Common Stock as shall be required
for such purpose. The Company agrees that all shares of Common Stock issued upon
exercise of the Class A Warrants and Class B Warrants shall be, at the time of
delivery of the certificates of such shares, validly issued and outstanding,
fully paid and non-assessable and listed on any national securities exchange or
quoted on the Nasdaq Stock Market upon which the other shares of Common Stock
are then listed or quoted. So long as any unexpired Class A Warrants or Class B
Warrants remain outstanding, the Company will file such post-effective
amendments to the Registration Statement (or other appropriate registration
statements or post-effective amendment or supplements) as may be necessary to
permit the to deliver to each holder exercising a Class A Warrant or Class B
Warrant, a prospectus meeting the requirements of Section 10(a)(3) of the Act
and otherwise complying with the Act, and will deliver such a prospectus to each
such person. To the extent that during any period where it is not reasonably
likely that the Class A Warrants or Class B Warrants will be exercised, due to
market price or otherwise, the Company need not file such a post-effective
amendment (or other appropriate registration statements or post-effective
amendment or supplements) during such period. The Company will keep a copy of
this Agreement on file with the transfer agent for the shares of Common Stock
and with every subsequent transfer agent for any shares of Common Stock issuable
upon the exercise of the Class A Warrants and Class B Warrants. The Warrant
Agent is irrevocably authorized to requisition from time to time from such
transfer agent stock certificates required to honor the exercise of outstanding
Class A Warrants and/or Class B Warrants. The Company will supply such transfer
agent with duly executed stock certificates for that purpose. All Class A
Warrant Certificates and Class B Warrant Certificates surrendered in the
exercise of Class A Warrants and Class B Warrants shall be canceled by the
Warrant Agent and shall thereafter be delivered to the Company, and such
canceled warrant certificates shall constitute sufficient evidence of the number
of shares of Common Stock which have been issued upon the exercise of the Class
A Warrants and/or Class B Warrants evidenced by such canceled warrant
certificates. Promptly after the Class A Warrant Exercise Expiration Time, the
Warrant Agent shall certify to the Company the total aggregate amount of Class A
Warrants then outstanding and, thereafter, no shares of Common Stock shall be
subject to reservation in respect of such Class A Warrants nor may such Class A
Warrants be exercised, except as provided in Section 13 of this Agreement.
Promptly after the Class B Warrant Exercise Expiration Time, the Warrant Agent
shall certify to the Company the total aggregate amount of Class B Warrants then
outstanding and,
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thereafter, no shares of Common Stock shall be subject to reservation in respect
of such Class B Warrants nor may such Class B Warrants be exercised, except as
provided in Section 13 of this Agreement.
Section 9. Warrant Exercise Prices; Adjustments.
(a) Adjustments to Class A Warrants. The Class A Warrant Exercise Price
initially shall be $6.00 per Class A Warrant. The Class A Warrant Exercise
Price, the number and kind of securities, but not the number of Class B
Warrants, purchasable upon the exercise of each Class A Warrant shall be subject
to adjustment from time to time upon the happening of the events enumerated in
this paragraph 9(a).
(i) Stock Dividends, Subdivisions and Combinations. In case the
Company shall at any time on or after the Warrant Exercise Commencement
Date and on or before the Class A Warrant Expiration Time:
(A) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock or such other stock to holders
of all outstanding shares of Common Stock;
(B) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares;
(C) combine the outstanding shares of Common Stock into a smaller
number of shares of Common Stock; or
(D) issue by reclassification of shares of Common Stock other
securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation);
then the number and kind of shares of Common Stock, but not the number and
kind of Class B Warrants, purchasable upon exercise of each Class A Warrant
outstanding immediately prior thereto shall be adjusted so that each Class
A Warrant shall entitle the holder thereof to receive the kind and number
of shares of Common Stock or other securities of the Company which the
Class A Warrant would have entitled the holder to receive after the
happening of any of the events described above had such Class A Warrant
been exercised in full immediately prior to the earlier of the happening of
such event or any record date in respect thereto. In the event of any
adjustment of the number of shares of Common Stock purchasable upon the
exercise of each then outstanding Class A Warrant pursuant to this
subparagraph 9(a)(i), the Class A Warrant Exercise Price shall be adjusted
to be the amount resulting from dividing the number of shares of Common
Stock (including fractional shares of Common Stock) covered by such Class A
Warrant immediately after such adjustment into the total amount payable
upon exercise of such Class A Warrant in full immediately prior to
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such adjustment. An adjustment made pursuant to this subparagraph 9(a)(i)
shall become effective immediately after the effective date of such event
retroactive to the record date for any such event. Such adjustment shall be
made successively whenever any event listed above shall occur.
(ii) Extraordinary Dividends. In case the Company shall, at any time
on or after the Warrant Exercise Commencement Date and on or before the
Class A Warrant Expiration Time, fix a record date for the issuance of
rights, options, or warrants to all holders of outstanding shares of Common
Stock, entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase shares of Common Stock (or
securities exchangeable for or convertible into shares of Common Stock) at
a price per share of Common Stock (or having an exchange or conversion
price per share of Common Stock, with respect to a security exchangeable
for or convertible into shares of Common Stock) which is lower than the
current Market Price per share of Common Stock (as defined in paragraph
9(c) of this Agreement) on such record date, then each Class A Warrant
shall be adjusted by multiplying the Class A Warrant Exercise Price in
effect immediately prior to such record date by a fraction, of which (A)
the numerator shall be the number of shares of Common Stock outstanding on
such record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
to be offered (or the aggregate initial exchange or conversion price of the
exchangeable or convertible securities so to be offered) would purchase at
such current Market Price and (B) the denominator shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock to be offered for subscription or
purchase (or into which the exchangeable or convertible securities so to be
offered are initially exchangeable or convertible). Such adjustment shall
become effective at the close of business on such record date; provided,
however, to the extent that shares of Common Stock (or securities
exchangeable for or convertible into shares of Common Stock) are not
delivered after the expiration of such rights, options, or warrants, the
Class A Warrant Exercise Price shall be readjusted (but only with respect
to Class A Warrants exercised after such expiration) to the Class A Warrant
Exercise Price which would then be in effect had the adjustments made upon
the issuance of such rights, options, or warrants been made upon the basis
of delivery of only the number of shares of Common Stock (or securities
exchangeable for or convertible into shares of Common Stock) actually
issued. In case any subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company and shall be described in a statement delivered to
the Warrant Agent. Shares of Common Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation.
(iii) Extraordinary Distributions. In case the Company shall, at any
time on or after the Warrant Commencement Date and on or before the Class A
Warrant Expiration Time, distribute to all holders of outstanding shares of
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving corporation)
evidences of the Company's indebtedness or assets (excluding cash dividends
and distributions payable out of consolidated net income or earned
10
surplus in accordance with Nevada law and dividends or distributions
payable in shares of stock described in subparagraphs 9(a)(i) or 9(b)(i) of
this Agreement) or rights, options, or warrants or exchangeable or
convertible securities containing the right to subscribe for or purchase
shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock), then the Class A Warrant Exercise Price shall be
adjusted by multiplying the Class A Warrant Exercise Price in effect
immediately prior to the record date for such distribution by a fraction,
of which (A) the numerator shall be the current Market Price per share of
Common Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be conclusive, and described in a statement delivered to the Warrant
Agent) of the portion of the evidences of indebtedness or assets so to be
distributed or of such rights, options or warrants applicable to one share
of Common Stock and (B) the denominator shall be such current Market Price
per share of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of
distribution retroactive to the record date for such transaction.
(iv) Capital Reorganizations and Other Reclassifications. In case of
any capital reorganization of the Company, or of any reclassification of
the shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in subparagraphs 9(a)(i)
or 9(b)(i) of this Agreement), or in case of the consolidation of the
Company with, or the merger of the Company with, or merger of the Company
into, any other corporation (other than a reclassification of the shares of
Common Stock referred to in subparagraphs 9(a)(i) or 9(b)(i) of this
Agreement or a consolidation or merger which does not result in any
reclassification or change of the outstanding shares of Common Stock) or of
the sale of the properties and assets of the Company as, or substantially
as, an entirety to any other corporation or entity occurring on or after
the Warrant Exercise Commencement Date and on or before the Class A Warrant
Exercise Expiration Time, each Class A Warrant shall, after such capital
reorganization, reclassification of shares of Common Stock, consolidation,
merger, or sale, be exercisable, upon the terms and conditions specified in
this Agreement, for the kind, amount and number of shares or other
securities, assets, or cash to which a holder of the number of shares of
Common Stock purchasable (at the time of such capital reorganization,
reclassification of shares of Common Stock, consolidation, merger or sale)
upon exercise of such Class A Warrant would have been entitled to receive
upon such capital reorganization, reclassification of shares of Common
Stock, consolidation, merger, or sale, along with a Class B Warrant as
otherwise provided herein; and, in any such case, if necessary, the
provisions set forth in this paragraph 9(a) with respect to the rights and
interests thereafter of the holders of Class A Warrants shall be
appropriately adjusted so as to be applicable, as nearly equivalent as
possible, to any shares or other securities, assets, or cash thereafter
deliverable on the exercise of the Class A Warrants. The Company shall not
effect any such consolidation, merger, or sale, unless prior to or
simultaneously with the consummation thereof the successor corporation or
entity (if other than the Company) resulting from such consolidation or
merger or the corporation or entity purchasing such assets or other
appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the holders of Class A Warrants such shares,
securities, assets, or cash as, in
11
accordance with the foregoing provisions, such holders may be entitled to
purchase and the other obligations hereunder. The subdivision or
combination of shares of Common Stock at any time outstanding into a
greater or lesser number of shares shall not be deemed to be a
reclassification of the shares of Common Stock for purposes of this
subparagraph 9(a)(iv).
(b) Adjustments to Class B Warrants. The Class B Warrant Exercise Price
initially shall be $9.00 per Class B Warrant. The Class B Warrant Exercise
Price, the number and kind of securities, purchasable upon the exercise of each
Class B Warrant shall be subject to adjustment from time to time upon the
happening of the events enumerated in this paragraph 9(b).
(i) Stock Dividends, Subdivisions and Combinations. In case the
Company shall at any time on or after the Warrant Exercise Commencement
Date and on or before the Class B Warrant Expiration Time:
(A) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock or such other stock to holders
of all outstanding shares of Common Stock;
(B) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares;
(C) combine the outstanding shares of Common Stock into a smaller
number of shares of Common Stock; or
(D) issue by reclassification of shares of Common Stock other
securities of the Company (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation);
then the number and kind of shares of Common Stock purchasable upon
exercise of each Class B Warrant outstanding immediately prior thereto
shall be adjusted so that each Class B Warrant shall entitle its holder to
receive the kind and number of shares of Common Stock or other securities
of the Company which the Class B Warrant would have entitled the holder
thereof to receive after the happening of any of the events described above
had such Class B Warrant been exercised in full immediately prior to the
earlier of the happening of such event or any record date in respect
thereto. In the event of any adjustment of the number of shares of Common
Stock purchasable upon the exercise of each then outstanding Class B
Warrant pursuant to this subparagraph 9(b)(i), the Class B Warrant Exercise
Price shall be adjusted to be the amount resulting from dividing the number
of shares of Common Stock (including fractional shares of Common Stock)
covered by such Class B Warrant immediately after such adjustment into the
total amount payable upon exercise of such Class B Warrant in full
immediately prior to such adjustment. An adjustment made pursuant to this
subparagraph 9(b)(i) shall become effective immediately after the effective
date of such event retroactive to the record date for any such event. Such
adjustment shall be made successively whenever any event listed above shall
occur.
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(ii) Extraordinary Dividends. In case the Company shall, at any time
on or after the Warrant Exercise Commencement Date and on or before the
Class B Warrant Expiration Time, fix a record date for the issuance of
rights, options, or warrants to all holders of outstanding shares of Common
Stock, entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase shares of Common Stock (or
securities exchangeable for or convertible into shares of Common Stock) at
a price per share of Common Stock (or having an exchange or conversion
price per share of Common Stock, with respect to a security exchangeable
for or convertible into shares of Common Stock) which is lower than the
current Market Price per share of Common Stock on such record date, then
each Class B Warrant shall be adjusted by multiplying the Class B Warrant
Exercise Price in effect immediately prior to such record date by a
fraction, of which (A) the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of
shares of Common Stock so to be offered (or the aggregate initial exchange
or conversion price of the exchangeable or convertible securities so to be
offered) would purchase at such current Market Price and (B) the
denominator shall be the number of shares of Common Stock outstanding on
such record date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the exchangeable or
convertible securities so to be offered are initially exchangeable or
convertible). Such adjustment shall become effective at the close of
business on such record date; provided however, to the extent that shares
of Common Stock (or securities exchangeable for or convertible into shares
of Common Stock) are not delivered after the expiration of such rights,
options, or warrants, the Class B Warrant Exercise Price shall be
readjusted (but only with respect to Class B Warrants exercised after such
expiration) to the Class B Warrant Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights, options,
or warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities exchangeable for or convertible into
shares of Common Stock) actually issued. In case any subscription price may
be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company and shall be described in a
statement delivered to the Warrant Agent. Shares of Common Stock owned by
or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation.
(iii) Extraordinary Distributions. In case the Company shall, at any
time on or after the Warrant Commencement Date and on or before the Class B
Warrant Expiration Time, distribute to all holders of outstanding shares of
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving corporation)
evidences of the Company's indebtedness or assets (excluding cash dividends
and distributions payable out of consolidated net income or earned surplus
in accordance with Nevada law and dividends or distributions payable in
shares of stock described in subparagraphs 9(a)(i) or 9(b)(i) of this
Agreement) or rights, options, or warrants or exchangeable or convertible
securities containing the right to subscribe for or purchase shares of
Common Stock (or securities exchangeable for or convertible into shares of
Common Stock), then the Class B Warrant Exercise Price shall be adjusted by
multiplying
13
the Class B Warrant Exercise Price in effect immediately prior to the
record date for such distribution by a fraction, of which (A) the numerator
shall be the current Market Price per share of Common Stock on such record
date, less the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be conclusive, and
described in a statement delivered to the Warrant Agent) of the portion of
the evidences of indebtedness or assets so to be distributed or of such
rights, options or warrants applicable to one share of Common Stock and (B)
the denominator shall be such current Market Price per share of Common
Stock. Such adjustment shall be made whenever any such distribution is
made, and shall become effective on the date of distribution retroactive to
the record date for such transaction.
(iv) Capital Reorganizations and Other Reclassifications. In case of
any capital reorganization of the Company, or of any reclassification of
the shares of Common Stock (other than a reclassification, subdivision or
combination of shares of Common Stock referred to in subparagraphs 9(a)(i)
or 9(b)(i) of this Agreement), or in case of the consolidation of the
Company with, or the merger of the Company with, or merger of the Company
into, any other corporation (other than a reclassification of the shares of
Common Stock referred to in subparagraphs 9(a)(i) or 9(b)(i) or a
consolidation or merger which does not result in any reclassification or
change of the outstanding shares of Common Stock) or of the sale of the
properties and assets of the Company as, or substantially as, an entirety
to any other corporation or entity occurring on or after the Warrant
Exercise Commencement Date and on or before the Class B Warrant Exercise
Expiration Time, each Class B Warrant shall, after such capital
reorganization, reclassification of shares of Common Stock, consolidation,
merger, or sale, be exercisable, upon the terms and conditions specified in
this Agreement, for the kind, amount and number of shares or other
securities, assets, or cash to which a holder of the number of shares of
Common Stock purchasable (at the time of such capital reorganization,
reclassification of shares of Common Stock, consolidation, merger or sale)
upon exercise of such Class B Warrant would have been entitled to receive
upon such capital reorganization, reclassification of shares of Common
Stock, consolidation, merger, or sale; and, in any such case, if necessary,
the provisions set forth in this paragraph 9(b) with respect to the rights
and interests thereafter of the holders of Class B Warrants shall be
appropriately adjusted so as to be applicable, as nearly equivalent as
possible, to any shares or other securities, assets, or cash thereafter
deliverable on the exercise of the Class B Warrants. The Company shall not
effect any such consolidation, merger, or sale, unless prior to or
simultaneously with the consummation thereof the successor corporation or
entity (if other than the Company) resulting from such consolidation or
merger or the corporation or entity purchasing such assets or other
appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the holders of Class B Warrants such shares,
securities, assets, or cash as, in accordance with the foregoing
provisions, such holders may be entitled to purchase and the other
obligations hereunder. The subdivision or combination of shares of Common
Stock at any time outstanding into a greater or lesser number of shares
shall not be deemed to be a reclassification of the shares of Common Stock
for purposes of this subparagraph 9(b)(iv).
14
(c) Current Market Price Defined. For the purpose of any computation under
paragraphs 9(a) and/or 9(b) and Section 10 of this Agreement, the current Market
Price per share of Common Stock at any date shall be deemed to be the average
daily Closing Price of the shares of Common Stock for twenty consecutive trading
days ending within fifteen days before the date in question. The term "Closing
Price" of the shares of Common Stock for a day or days shall mean (i) if the
shares of Common Stock are listed or admitted for trading on a national
securities exchange, the last reported sales price regular way, or, in case no
such reported sale takes place on such day or days, the average of the reported
closing bid and asked prices regular way, in either case on the principal
national securities exchange on which the shares of the Common Stock are listed
or admitted for trading, or (ii) if the shares of Common Stock are not listed or
admitted for trading on a national securities exchange, (A) the last transaction
price for the Common Stock on The Nasdaq Stock Market ("Nasdaq") or, in the case
no such reported transaction takes place on such day or days, the average of the
reported closing bid and asked prices thereof quoted on Nasdaq, or (B) if the
shares of Common Stock are not quoted on Nasdaq, the average of the closing bid
and asked prices of the Common Stock as quoted on the Over-The-Counter Bulletin
Board maintained by the National Association of Securities Dealers, Inc. (the
"Bulletin Board"), or (C) if the shares of Common Stock are not quoted on Nasdaq
nor on the Bulletin Board, the average of the closing bid and asked prices of
the common stock in the over-the-counter market, as reported by The Pink Sheets,
LLC, or an equivalent generally accepted reporting service, or (iii) if on any
such day or days the shares of Common Stock are not listed on a national
securities exchange nor quoted on Nasdaq, on the Bulletin Board or by The Pink
Sheets, LLC, the fair market value of the shares of Common Stock on such day or
days, as determined in good faith by the Board of Directors of the Company,
shall be used.
(d) Minimum Adjustment. Except as hereinafter provided, no adjustment of
the Class A Warrant Exercise Price nor the Class B Warrant Exercise Price shall
be made if such adjustment results in a change of the Class A Warrant Exercise
Price or Class B Warrant Exercise Price then in effect of less than five cents
($.05) per Class A Warrant or Class B Warrant, as the case may be. Any
adjustment of less than five cents ($.05) per share of any Class A Warrant
Exercise Price or the Class B Warrant Exercise Price shall be carried forward
and shall be made at the time of and together with any subsequent adjustment
which, together with adjustment or adjustments so carried forward, amounts to
five cents ($.05) or more per Class A Warrant or Class B Warrant, as the case
may be. However, upon exercise of a Class A Warrant or Class B Warrant, the
Company shall make all necessary adjustments (to the nearest cent) not
theretofore made to the Class A Warrant Exercise Price and Class B Warrant
Exercise Price up to and including the effective date upon which such Class A
Warrant or Class B Warrant, as the case may be, is exercised.
(e) Notice of Adjustments. Whenever the Class A Warrant Exercise Price or
Class B Warrant Exercise Price shall be adjusted pursuant to this Section 9, the
Company shall promptly deliver a certificate signed by the President or a Vice
President and by the Chief Financial Officer, Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Company, setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board of Directors of the Company made any
determination hereunder), to the
15
Warrant Agent who shall forward copies of such certificate to each registered
holder of Class A Warrants and Class B Warrants.
(f) Adjustments to Other Securities. Except with respect to the Class B
Warrants issued upon exercise of Class A Warrants, in the event that at any
time, as a result of an adjustment made pursuant to this Section 9, the holder
of a Class A Warrant or Class B Warrant shall become entitled to purchase any
shares or securities of the Company other than the shares of Common Stock,
thereafter the number of such other shares or securities so purchasable upon
exercise of each Class A Warrant and Class B Warrant and the Class A Warrant
Exercise Price and Class B Warrant Exercise Price for such shares or securities
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as possible to the provisions contained in Paragraphs 9(a) and
9(b) of this Agreement.
(g) Deferral of Issuance of Additional Shares in Certain Circumstances. In
any case in which this Section 9 shall require that an adjustment in the Class A
Warrant Exercise Price or Class B Warrant Exercise Price be made effective as of
a record date for a specified event, the Company may elect to defer until the
occurrence of such event issuing to the holder of a Class A Warrant or Class B
Warrant exercised after such record date the shares of Common Stock, if any,
issuable upon such exercise over and above the shares of Common Stock, if any,
issuable upon such exercise on the basis of the Class A Warrant Exercise Price
or Class B Warrant Exercise Price, as the case may be, in effect prior to such
adjustment; provided, however, that the Company shall deliver as soon as
practicable to such holder a due bill or other appropriate instrument provided
by the Company evidencing such holder's right to receive such additional shares
of Common Stock upon the occurrence of the event requiring such adjustment.
(h) Company Right to Reduce the Class A Warrant Exercise Price and/or Class
B Warrant Exercise Price. Notwithstanding anything contained in this Agreement
to the contrary, the Company has the right, exercisable in the Company's sole
discretion, at any time prior to the Class A Warrant Expiration Time with
respect to the Class A Warrants and at any time prior to the Class B Warrant
Expiration Time with respect to the Class B Warrants, and from time to time, on
not less than 30 days' prior written notice (each, a "Reduced Warrant Exercise
Price Notice") to the registered holders of all outstanding Class A Warrants
and/or Class B Warrants, to reduce the Class A Warrant Exercise Price and/or
Class B Warrant Exercise Price as then in effect; provided that the period in
which such reduced Class A Warrant Exercise Price and/or Class B Warrant
Exercise Price shall be in effect shall be for no less than fifteen nor more
than 90 days and such period shall be clearly identified in the Reduced Warrant
Exercise Price Notice.
(i) Warrant Agent's Obligations and Liabilities with Respect to an Exercise
Price Adjustment. The Warrant Agent shall have no duty with respect to any
statement or certificate of the Company filed with the Warrant Agent pursuant to
this Section 9, except to keep such statement on file, forward copies to the
registered holders of Class A Warrants and Class B Warrants as required by this
Section 9 and to make such statement or certificate available for inspection by
the registered holders of Class A Warrants or Class B Warrants during reasonable
business hours, and the Warrant Agent may conclusively rely upon the latest
statement(s) or certificate(s) furnished to the Warrant Agent pursuant to this
Section 9. The Warrant Agent shall not at any time be under any
16
duty or responsibility to any holder of a Class A Warrant or Class B Warrant to
determine whether any facts exist which may require any adjustment of the Class
A Warrant Exercise Price or Class B Warrant Exercise Price, or with respect to
the nature or extent of any adjustment of the Class A Warrant Exercise Price or
Class B Warrant Exercise Price when made, or with respect to the method employed
in making any such adjustment, or with respect to the nature or extent of the
property or securities deliverable hereunder. In the absence of a statement or
certificate having been furnished, the Warrant Agent may conclusively rely upon
the provisions of this Agreement and the Class A Warrant Certificates and Class
B Warrant Certificates with respect to the Common Stock deliverable upon the
exercise of the Class A Warrants and Class B Warrants and the applicable Class A
Warrant Exercise Price and Class B Warrant Exercise Price.
(j) Use of Warrant Certificates Following an Adjustment in an Exercise
Price. Irrespective of any adjustments in the Class A Warrant Exercise Price or
Class B Warrant Exercise Price, or the number or kind of securities issuable
upon exercise of the Class A Warrants or Class B Warrants, warrants certificates
previously or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar warrant certificates
initially issuable pursuant to this Agreement.
(k) The Company may retain a firm of independent public accountants (who
may be any such firm regularly employed by the Company) to make any computation
required under this Section 9, and any certificate setting forth such
computation signed by such firm shall be conclusive evidence of the correctness
of any computation made under this Section 9.
Section 10. Fractional Interest. Class A Warrants and/or Class B Warrants may
only be exercised to purchase full shares of Common Stock and the Company shall
not be required to issue fractions of shares of Common Stock upon the exercise
of Class A Warrants or Class B Warrants. However, if a registered holder
exercises all Class A Warrants or Class B Warrants then owned of record by such
registered holder and such exercise would result in the issuance of a fractional
share, the Company will pay to such record holder, in lieu of the issuance of
any fractional share otherwise issuable, an amount of cash based on the current
Market Price of the Common Stock as of such date of final exercise.
Section 11. Information to Warrantholders. The Company shall cause copies of all
financial statements and reports, proxy statements and other documents that are
sent to the Company's stockholders to be sent by first-class mail, postage
prepaid, on the date of mailing to such stockholders, to each record holder of
Class A Warrants and Class B Warrants at such holder's address appearing in the
warrant registers as of the record date for the determination of the
stockholders entitled to such documents.
17
Section 12. Disposition of Proceeds on Exercise of Warrants; Copy of Agreement
Available for Inspection.
(a) The Warrant Agent shall promptly forward to the Company all monies
received by the Warrant Agent through the exercise of Class A Warrants and Class
B Warrants.
(b) The Warrant Agent shall keep a copy of this Agreement available for
inspection by registered holders of Class A Warrants and Class B Warrants during
normal business hours.
Section 13. Redemption of Warrants.
(a) Notwithstanding anything to the contrary contained in this Agreement,
the Class A Warrants are redeemable by the Company, in whole but not in part, on
not less than 30 days' prior written notice (the "Class A Redemption Notice"),
at a redemption price (the "Redemption Price") of $.001 per Warrant, at any time
on or after the Warrant Exercise Commencement Date. Each holder of a Class A
Warrant will have full rights to exercise all of such holder's Class A Warrants
subject to the Class B Redemption Notice until 5:00 p.m., Henderson, Nevada time
(the "Class A Accelerated Expiration Time"), on the business day immediately
preceding the date (the "Class A Redemption Date") fixed for redemption in the
Class A Redemption Notice. Notwithstanding anything to the contrary contained in
this Agreement, (i) the Company shall have the option, without further
compensation to the holders of Class A Warrants other than the payment of the
Redemption Price per Class A Warrant, to cause any or all of those Class A
Warrants (each, a "Non-Exercised Class A Warrant") which were not properly
exercised on or before the Class A Accelerated Expiration Time to be assigned to
one or more third parties (each, a "Standby Purchaser"), effective immediately
following the Class A Accelerated Expiration Time, for the consideration equal
to $.001 per Non-Exercised Class A Warrant payable to the Company, and (ii) each
Standby Purchaser shall have the right to exercise the Non-Exercised Class A
Warrants so assigned to such Standby Purchaser through the fourteenth day
following the Class A Redemption Date.
(b) Notwithstanding anything to the contrary contained in this Agreement,
the Class B Warrants are redeemable by the Company, in whole but not in part, on
not less than 30 days' prior written notice (the "Class B Redemption Notice"),
at the Redemption Price, at any time on or after the Warrant Exercise
Commencement Date. Each holder of a Class B Warrant will have full rights to
exercise all of such holder's Class B Warrants subject to the Class B Redemption
Notice until 5:00 p.m., Henderson, Nevada time (the "Class B Accelerated
Expiration Time"), on the business day immediately preceding the date (the
"Class B Redemption Date") fixed for redemption in the Class B Redemption
Notice. Notwithstanding anything to the contrary contained in this Agreement,
(i) the Company shall have the option, without further compensation to the
holders of Class B Warrants other than the payment of the Redemption Price per
Class B Warrant, to cause any or all of those Class B Warrants (each, a
"Non-Exercised Class B Warrant") which were not properly exercised on or before
the Class B Accelerated Expiration Time to be assigned to one or more Standby
Purchasers, effective immediately following the Class B Accelerated Expiration
Time, for
18
the consideration equal to $.001 per Non-Exercised Class B Warrant payable to
the Company, and (ii) each Standby Purchaser shall have the right to exercise
the Non-Exercised Class B Warrants so assigned to such Standby Purchaser through
the fourteenth day following the Class B Redemption Date.
Section 14. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation or company which may succeed to the corporate trust business of the
Warrant Agent, by any merger or consolidation or otherwise, shall be the
successor to the Warrant Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement, provided that such corporation would be eligible to serve as a
successor Warrant Agent under the provisions of Sections 15 and 16 of this
Agreement. In case, at the time such successor to the Warrant Agent shall
succeed to the agency created by this Agreement, any of the Class A Warrant
Certificates or Class B Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such warrant
certificates as so countersigned. In case, at any time the name of the Warrant
Agent shall be changed and at such time any of the Class A Warrant Certificates
or Class B Warrant Certificates shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and
deliver such warrant certificates as so countersigned. In all such cases, such
warrant certificates as so countersigned shall have the full force provided in
the warrant certificates and in this Agreement.
Section 15. Duties of Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the terms and conditions set forth in
this Section 15, by all of which the Company and the holders of Class A Warrants
and/or Class B Warrants, by their acceptance of warrant certificates evidencing
such Class A Warrants or Class B Warrants, as the case may be, shall be bound.
(a) The statements of fact and recitals contained herein and in the Class A
Warrant Certificates and Class B Warrant Certificates shall be taken as
statements of the Company, and the Warrant Agent assumes no responsibility for
the correctness of any of the same except such as describe the Warrant Agent or
action taken or to be taken by the Warrant Agent. The Warrant Agent assumes no
responsibility with respect to the distribution of the Class A Warrants, Class B
Warrants, Class A Warrant Certificates or Class B Warrant Certificates, except
as expressly provided in this Agreement.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Class A Warrant Certificates or Class B Warrant Certificates to be complied
with by the Company.
(c) The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Class A
Warrant or Class B Warrant in respect
19
of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Class A Warrant or Class B Warrant for any
action taken in reliance on any notice, resolution, waiver, consent, order,
certificate or other instrument believed by the Warrant Agent to be genuine and
to have been signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of this
Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement except as a result of the Warrant Agent's
negligence, willful misconduct or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any action,
suit or legal proceeding or to take any other action likely to involve expenses
unless the Company or one or more registered holders of Class A Warrants or
Class B Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any of the Class A
Warrants or Class B Warrants may be enforced by the Warrant Agent without the
possession of any of the Class A Warrant Certificates or Class B Warrant
Certificates or the production thereof at any trial or other proceeding, and any
such action, suit or proceeding instituted by the Warrant Agent shall be brought
in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the registered holders of the Class A Warrants and Class B
Warrants, as their respective rights and interests may appear.
(g) The Warrant Agent and any stockholder, director, officer, partner or
employee of the Warrant Agent may buy, sell or deal in any of the Class A
Warrants and/or Class B Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to or otherwise act as fully and
freely as though it were not the Warrant Agent under this Agreement. Nothing
contained in this Agreement shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent and its duties
shall be determined solely by the provisions of this Agreement.
(i) The Warrant Agent may execute and exercise any of the rights or powers
vested in it or perform any duty under this Agreement either itself or by or
through the Warrant Agent's attorneys, agents or employees, and the Warrant
Agent shall not be answerable or accountable for any such attorneys, agents or
employees or for any loss to the Company resulting
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from such neglect or misconduct, provided reasonable care had been exercised in
the selection and continued employment thereof.
(j) Any request, direction, election, order or demand of the Company shall
be sufficiently evidenced by an instrument signed in the name of the Company by
its Chief Executive Officer, President or a Vice President or its Secretary or
an Assistant Secretary or its Treasurer or an Assistant Treasurer (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Warrant Agent by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company.
Section 16. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company notice
in writing, and to registered holders of the Class A Warrants and Class B
Warrants notice by mailing such notice to the registered holders at their
addresses appearing on the warrant registers, of such resignation, specifying a
date when such resignation shall take effect. The Warrant Agent may be removed
by like notice to the Warrant Agent from the Company and the like mailing of
notice to the registered holders of the Class A Warrants and Class B Warrants.
If the Warrant Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Warrant Agent.
If the Company shall fail to make such appointment within a period of 30 days
after such removal or after the Company has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Warrant Agent or
after the Company has received such notice from a registered holder of a Class A
Warrant or Class B Warrant (who shall, with such notice, submit the holder's
Class A Warrant Certificate or Class B Warrant Certificate, as the case may be,
for inspection by the Company), then the registered holder of any Class A
Warrant or Class B Warrant may apply to any court of competent jurisdiction for
the appointment of a successor to the Warrant Agent. Any successor Warrant
Agent, whether appointed by the Company or by such a court, shall be a bank or
trust company, in good standing, incorporated under Nevada, New York or federal
law. After appointment, the successor Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if the successor Warrant
Agent had been originally named as Warrant Agent under this Agreement without
further act or deed and the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent all canceled Class A Warrant Certificates and Class
B Warrant Certificates, records and property at the time held by the former
Warrant Agent, pursuant to this Agreement, and execute and deliver any further
assurance or conveyance necessary for such purpose. Failure to file or mail any
notice provided for in this Section 16, however, or any defect in such notice,
shall not affect the validity of the resignation or removal of the Warrant Agent
or the appointment of the successor Warrant Agent, as the case may be.
Section 17. Identity of Transfer Agent. Forthwith upon the appointment of any
transfer agent for the shares of Common Stock or of any subsequent transfer
agent for the shares of Common Stock or other securities of the Company issuable
upon the exercise of Class A Warrants or Class B Warrants, the Company will file
with the Warrant Agent a statement setting forth the name and address of such
transfer agent.
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Section 18. Notices. All requests, demands, notices and other communications
required or otherwise given under this Agreement shall be sufficiently given if
(a) delivered by hand against written receipt therefor, (b) forwarded by
overnight courier requiring acknowledgment of receipt or (c) mailed by postage
prepaid, registered or certified mail, return receipt requested addressed, as
follows:
If to the Company, to: Crest View Inc.
1700 West Horizon Ridge Parkway - Suite 202
Henderson, Nevada 89012
Attention: President
with a copy to: Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158-0125
Attention: Elliot H. Lutzker, Esq.
if to the Warrant Agent, to: Pacific Stock Transfer Company
500 East Warm Springs Road - Suite 240
Las Vegas, Nevada 89119
Attention: President
or, in the case of any of the parties hereto, at such other address as such
party shall have furnished in writing, in accordance with this Section 18, to
the other party to this Agreement. Each such request, demand, notice or other
communication shall be deemed given (x) on the date of delivery by hand, (y) on
the first business day following the date of delivery to an overnight courier or
(z) three business days following mailing by registered or certified mail.
Section 19. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising under this Agreement
which the Company and the Warrant Agent may deem necessary or desirable and
which shall not be inconsistent with the provisions of the Class A Warrants and
Class B Warrants and which shall not adversely affect the interest of the
holders of the Class A Warrants and Class B Warrants.
Section 20. Nevada Contract. This Agreement and each Class A Warrant and Class B
Warrant issued hereunder shall be deemed to be a contract made under the laws of
the State of Nevada and shall be construed in accordance with the laws of Nevada
applicable to agreements to be performed wholly within Nevada.
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Section 21. Benefits of this Agreement. Nothing contained in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Warrant Agent and the registered holders of the Class A Warrants and Class B
Warrants any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Warrant Agent and such registered holders.
Section 22. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
Crest View Inc.
By:
---------------------------------------
John C. Francis, Vice President
Pacific Stock Transfer Company
By:
---------------------------------------
Shelley Godfrey, President
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