Exhibit 4.5
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES OF
COMMON STOCK AND WARRANTS, OR ANY OTHER SECURITIES, ISSUABLE UPON EXERCISE OF
SUCH WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
SUCH WARRANTS HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK, ANY WARRANTS,
OR ANY OTHER SECURITIES, ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO
BE ACQUIRED, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR
SUCH SHARES AND WARRANTS, OR OTHER SECURITIES, UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF SUCH WARRANTS AND SUCH SHARES AND WARRANTS, OR
OTHER SECURITIES, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT
AND SUCH STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. ON JANUARY 19, 2004
CREST VIEW INC.
WARRANT CERTIFICATE
__________ Redeemable Common Stock Purchase Warrants
Henderson, Nevada
Warrant Certificate No. OIA-____ As of January 20, 2000
THIS IS TO CERTIFY THAT, for value received, ___________________________
("Warrantholder") is the registered owner of the number of redeemable common
stock purchase warrants (each, a "Warrant") of Crest View Inc., a Nevada
corporation (the "Company"), set forth above, each Warrant entitling the owner
thereof to purchase from the Company, at a purchase price of $6.00 per Warrant
(the "Purchase Price"), at any time on or after January 20, 2000 (the "Warrant
Commencement Date") and terminating at 5:00 p.m., New York City time, on January
19, 2004 (the "Expiration Time"), (a) one duly authorized, validly issued, fully
paid and non-assessable share (each, a "Warrant Share") of the common stock, par
value $.001 per share ("Common Stock"), of the Company and (b) one redeemable
common stock purchase warrant (each, an "Underlying Warrant"), each Underlying
Warrant entitling its holder to purchase from the Company, at a purchase price
of $9.00 per Warrant (the "Underlying Warrant Exercise Price"), at any time on
or after the Commencement Date and terminating at 5:00 p.m., New York City time,
on January 19, 2005, one share (each, an "Underlying Warrant Share") of Common
Stock, all subject to the terms and conditions contained herein. The number of
Warrants evidenced by this Warrant Certificate (and the number and kind of
securities which may be purchased upon exercise hereof) set forth above, and the
Purchase Price per share set forth above, are as of the date hereof. As provided
herein, the Purchase Price and the number of shares of Common Stock and
Underlying Warrants or other
securities which may be purchased upon the exercise of the Warrants evidenced by
this Warrant Certificate and the number of shares of Common Stock or other
securities which may be purchased upon the exercise of the Underlying Warrants
are, upon the happening of certain events, subject to modification and
adjustment. As also provided herein, the Warrants and Underlying Warrants are,
upon the happening of certain events, subject to redemption. The form of warrant
certificate to the Underlying Warrants is attached as Exhibit A to this Warrant
Certificate.
This Warrant Certificate, together with any warrant certificate(s) issued
in replacement or substitution hereof (as provided for herein) evidencing all or
part of the Warrants evidenced hereby, are sometimes collectively referred to
herein as the "Warrant Certificates."
The rights of the registered holder of this Warrant Certificate shall be
subject to the following further terms and conditions:
1. Exercise of Warrants.
(a) The Warrants may be exercised, in whole or in part, at any time and
from time to time, during the period commencing on the Commencement Date and
terminating at the Expiration Time by surrendering this Warrant Certificate,
with the purchase form provided for herein duly executed by the Warrantholder or
by the Warrantholder's duly authorized attorney-in-fact, at the principal office
of the Company, presently located at 1700 West Horizon Ridge Parkway, Henderson,
Nevada 89012, or at such other office or agency in the United States as the
Company may designate by notice in writing to the Warrantholder (in either
event, the "Company Offices"), accompanied by payment in full, either in the
form of cash, bank cashier's check or certified check payable to the order of
the Company, of the Purchase Price payable in respect of the Warrants being
exercised. If fewer than all of the Warrants are exercised, the Company shall,
upon each exercise prior to the Expiration Time, execute and deliver to the
Warrantholder a new Warrant Certificate (dated as of the date hereof) evidencing
the balance of the Warrants that remain exercisable.
(b) On the day immediately following the date of a valid exercise of any
Warrants, the Warrantholder exercising same shall be deemed to have become the
holder of record for all purposes of the Warrant Shares to which such valid
exercise relates.
(c) As soon as practicable, but not in excess of ten days, after the
exercise of all or part of the Warrants evidenced by this Warrant Certificate,
the Company, at its expense (including the payment by it of any applicable issue
taxes), will cause to be issued in the name of and delivered to the
Warrantholder, or such other party identified in the purchase form, certificates
evidencing the number of duly authorized, validly issued, fully paid and
non-assessable Warrant Shares and Underlying Warrants to which the
Warrantholder, or such other party identified in the purchase form, shall be
entitled upon such exercise.
(d) No certificates for fractional Warrant Shares and/or Underlying
Warrants shall be issued upon the exercise of any of the Warrants but, in lieu
thereof, the Company shall, upon exercise of all the Warrants, round up any
fractional Warrant Shares and/or Underlying Warrants to the nearest whole share
of Common Stock and/or whole Underlying Warrant.
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2. Issuance of Common Stock and Warrants; Reservation of Warrant Shares and
Underlying Warrant Shares. The Company covenants and agrees that:
(a) all Warrant Shares which may be issued upon the exercise of all or part
of the Warrants and all Underlying Warrant Shares which may be issued upon the
exercise of all or part of the Underlying Warrants will, upon issuance in
accordance with the terms hereof, be validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof;
(b) at all times prior to the Expiration Time, the Company shall keep
reserved for issuance a sufficient number of authorized shares of Common Stock
to permit the exercise in full of (i) the Warrants evidenced by this Warrant
Certificate and (ii) the Underlying Warrants issuable upon exercise of the
Warrants evidenced by this Warrant Certificate; and
(c) if any shares of Common Stock to be reserved for the purpose of the
issuance of Warrant Shares upon the exercise of Warrants and Underlying Warrant
Shares upon the exercise of the Underlying Warrants require registration with,
or approval of, any governmental authority under any federal or state law before
such shares may be validly issued or delivered upon exercise, then the Company
will promptly use its best efforts to effect such registration or obtain such
approval, as the case may be.
3. Adjustments of Purchase Price, Number and Character of Warrant Shares, Number
of Warrants and Number of Underlying Warrants. The Purchase Price, the number
and kind of securities, but not the number of Underlying Warrants, purchasable
upon the exercise of each Warrant shall be subject to adjustment from time to
time upon the happening of the events enumerated in this Section 3.
(a) Stock Dividends, Subdivisions and Combinations. In case the Company
shall at any time on or after the Commencement Date and on or before the
Expiration Time:
(i) 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 its
outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common Stock
into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares of Common Stock; or
(iv) issue by reclassification of its 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 corporation);
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then the number and kind of Warrant Shares, but not the number and kind of
Underlying Warrants, purchasable upon exercise of each Warrant outstanding
immediately prior thereto shall be adjusted so that the Warrantholder shall be
entitled to receive the kind and number of shares of Common Stock or other
securities of the Company which the Warrantholder would have owned or have been
entitled to receive after the happening of any of the events described above had
such 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 Warrant Shares purchasable upon the exercise of
each then outstanding Warrant pursuant to this Paragraph 3(a), the Purchase
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 Warrant immediately after such adjustment into the total amount payable
upon exercise of such Warrant in full immediately prior to such adjustment. An
adjustment made pursuant to this Paragraph 3(a) 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.
(b) Extraordinary Dividends. In case the Company shall at any time on or
after the Commencement Date and on or before the Expiration Time fix a record
date for the issuance of rights, options, or warrants to all holders of its
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 3(d) below) on such
record date, then the Purchase Price shall be adjusted by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, of
which (i) 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 (ii) 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; 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 Purchase Price shall be readjusted (but only with respect to
Warrants exercised after such expiration) to the Purchase 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 mailed to the
Warrantholder. 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.
4
(c) Extraordinary Distributions. In case the Company shall, at any time on
or after the Commencement Date and on or before the Expiration Time, distribute
to all holders of its 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 its indebtedness or assets (excluding cash
dividends and distributions payable out of consolidated net income or earned
surplus in accordance with Delaware law and dividends or distributions payable
in shares of stock described in Paragraph 3(a) above) 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 Purchase Price shall be
adjusted by multiplying the Purchase Price in effect immediately prior to the
record date for such distribution by a fraction, of which (i) the numerator
shall be the current Market Price per share of Common Stock (as defined in
Paragraph 3(d)) 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 notice to the Warrantholders) 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
(ii) 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.
(d) Current Market Price Defined. For the purpose of any computation under
Paragraphs 3(b) and/or 3(c), 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.
(e) 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 Paragraph
5
3(a)), 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 Paragraph 3(a) 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 Commencement Date and on
or before the Expiration Time, each 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
Warrant Certificate, 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
Warrant would have been entitled to receive upon such capital reorganization,
reclassification of shares of Common Stock, consolidation, merger, or sale,
along with an Underlying Warrant as otherwise provided herein; and in any such
case, if necessary, the provisions set forth in this Section 3 with respect to
the rights and interests thereafter of the Warrantholder 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 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 Warrantholder 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 Paragraph 3(e).
(f) Minimum Adjustment. Except as hereinafter provided, no adjustment of
the Purchase Price hereunder shall be made if such adjustment results in a
change of the Purchase Price then in effect of less than five cents ($.05) per
share. Any adjustment of less than five cents ($.05) per share of any Purchase
Price shall be carried forward and shall be made at the time of and together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to five cents ($.05) per share or more. However, upon
exercise of this Warrant Certificate, the Company shall make all necessary
adjustments (to the nearest cent) not theretofore made to the Purchase Price up
to and including the effective date upon which this Warrant Certificate is
exercised.
(g) Notice of Adjustments. Whenever the Purchase Price shall be adjusted
pursuant to this Section 3, 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), by first class mail
postage prepaid to each Warrantholder.
6
(h) Adjustments to Other Securities. Except with respect to the Underlying
Warrants and Underlying Warrant Shares, in the event that at any time, as a
result of an adjustment made pursuant to this Section 3, the Warrantholder 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 Warrant and the purchase 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 with
respect to the shares of Common Stock contained in Paragraphs 3(a), 3(b), 3(c),
and 3(e).
(i) Deferral of Issuance of Additional Shares in Certain Circumstances. In
any case in which this Section 3 shall require that an adjustment in the
Purchase 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 Warrant exercised after such record date the shares of Common Stock,
if any, issuable upon such exercise over and above the Warrant Shares, if any,
issuable upon such exercise on the basis of the Purchase Price 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.
(j) Company Right to Reduce the Purchase Price. Notwithstanding anything
contained in this Warrant Certificate to the contrary, the Company has the
right, exercisable in the Company's sole discretion, at any time prior to the
Expiration Time, and from time to time, on not less than 30 days' prior written
notice (each, a "Reduced Purchase Price Notice"), to reduce the Purchase Price
as then in effect; provided that the period in which such reduced Purchase 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 Purchase Price Notice.
4. Definition of Common Stock. The Common Stock issuable upon exercise of the
Warrants shall be the Common Stock as constituted on January 20, 2000, except as
otherwise provided in Section 3.
5. Replacement of Warrant Certificates. If this Warrant Certificate shall be
lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as the Company may in its discretion reasonably impose,
issue a new certificate of like tenor or date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock which
may be subscribed for and purchased hereunder. Any such new certificate 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.
6. Registration. This Warrant Certificate, as well as all other warrant
certificates representing Warrants shall be numbered and shall be registered in
a register (the "Warrant Register") maintained at the Company Offices as they
are issued. The Warrant Register shall list the name, address and Social
Security or other Federal Identification Number, if any, of all Warrantholders.
The Company shall be entitled to treat the Warrantholder as set forth in the
Warrant Register as the owner in fact of the Warrants as set forth therein for
all purposes and shall not be bound to recognize any equitable
7
or other claim to or interest in such Warrants on the part of any other person,
and shall not be liable for any registration of transfer of Warrants that are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration of transfer, or
with such knowledge of such facts that its participation therein amounts to bad
faith.
7. Transfer. NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR
THE SHARES OF COMMON STOCK AND UNDERLYING WARRANTS OR ANY OTHER SECURITIES
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS HAVE BEEN ACQUIRED, AND ANY
SHARES OF COMMON STOCK AND UNDERLYING WARRANTS OR ANY OTHER SECURITIES ISSUABLE
UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES AND UNDERLYING
WARRANTS OR OTHER SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF SUCH WARRANTS AND SUCH SHARES AND UNDERLYING WARRANTS OR OTHER
SECURITIES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND
SUCH STATE SECURITIES LAWS.
8. Exchange of Warrant Certificates. This Warrant Certificate may be exchanged
for another certificate or certificates entitling the Warrantholder thereof to
purchase a like aggregate number of Warrant Shares as this Warrant Certificate
entitles such Warrantholder to purchase. A Warrantholder desiring to so exchange
this Warrant Certificate shall make such request in writing delivered to the
Company, and shall surrender this Warrant Certificate therewith. Thereupon, the
Company shall execute and deliver to the person entitled thereto a new
certificate or certificates, as the case may be, as so requested.
9. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and, if to the Company, at the Company Offices or such other address as the
Company shall give notice thereof to the Warrantholder in accordance with this
Section 9.
10. Registration Rights.
(a) Defined Terms. As used in this Section 10, terms defined elsewhere
herein shall have their assigned meanings and each of the following terms shall
have the following meanings (such definitions to be applicable to both the
plural and singular of the terms defined):
8
(i) Registerable Securities. The term "Registerable Securities" shall
mean any of the Warrant Shares or other securities issuable upon exercise
of any of the Warrants. For the purposes of this Section 10, securities
will cease to be Registerable Securities when (A) a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"),
covering such Registerable Securities has been declared effective and (1)
such Registerable Securities have been disposed of pursuant to such
effective registration statement or (2) such registration statement has
remained effective for 270 consecutive days, (B) such Registerable
Securities are distributed to the public pursuant to the Securities Act or
pursuant to an exemption from the registration requirements of the
Securities Act, including, without limitation, Rules 144 and 144A
promulgated under the Securities Act or (C) such Registerable Securities
have been otherwise transferred and the Company, in accordance with
applicable law and regulations, has delivered new certificates or other
evidences of ownership for such securities which are not subject to any
stop transfer order or other restriction on transfer.
(ii) Rightsholders. The term "Rightsholders" shall include the
Warrantholder, all successors and assigns of the Warrantholders and all
transferees of Registerable Securities where such transfer affirmatively
includes the transfer and assignment of the rights of the
transferor-Warrantholder under this Agreement with respect to the
transferred Registerable Securities and such transferee agrees in writing
to assume all of the transferor-Warrantholder's agreements, obligations and
liabilities under this Article 10 with respect to the transferred
Registerable Securities.
(iii) Interpretations of Terms. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Section 10 shall
refer to this Section 10 as a whole and not to any particular provision of
this Section 10, and subsection, paragraph, clause, schedule and exhibit
references are to this Section 10 unless otherwise specified.
(b) Piggy-Back Registration.
(i) If, at any time on or after the six months after the effective
date of a registration statement under the Securities Act with respect to
any shares of Common Stock and on or prior to two years from the Expiration
Time, the Company proposes to file a registration statement under the
Securities Act with respect to an offering by the Company or any other
party of any class of equity security similar to any Registerable
Securities (other than a registration statement on Form S-4 or S-8 or any
successor form or a registration statement filed solely in connection with
an exchange offer, a business combination transaction or an offering of
securities solely to the existing stockholders or employees of the
Company), then the Company, on each such occasion, shall give written
notice (each, a "Company Piggy-Back Notice") of such proposed filing to all
of the Rightsholders owning Registerable Securities at least fifteen days
before the anticipated filing date of such registration statement, and such
Company Piggy-Back Notice also shall be required to offer to such
Rightsholders the opportunity to register such aggregate number of
Registerable Securities as each such Rightsholder may request. Each such
Rightsholder shall have the
9
right, exercisable for the five days immediately following the giving of a
Company Piggy- Back Notice, to request, by written notice (each, a "Holder
Notice") to the Company, the inclusion of all or any portion of the
Registerable Securities of such Rightsholders in such registration
statement. The Company shall use reasonable efforts to cause the managing
underwriter(s) of a proposed underwritten offering to permit the inclusion
of the Registerable Securities which were the subject of all Holder Notices
in such underwritten offering on the same terms and conditions as any
similar securities of the Company included therein. Notwithstanding
anything to the contrary contained in this Subparagraph 10(b)(i), if the
managing underwriter(s) of such underwritten offering or any proposed
underwritten offering delivers a written opinion to the Rightsholders of
Registerable Securities which were the subject of all Holder Notices that
the total amount and kind of securities which they, the Company and any
other person intend to include in such offering is such as to materially
and adversely affect the success of such offering, then the amount of
securities to be offered for the accounts of such Rightsholders and persons
other than the Company shall be eliminated or reduced pro rata (based on
the amount of securities owned by such Rightsholders and other persons
which carry registration rights) to the extent necessary to reduce the
total amount of securities to be included in such offering to the amount
recommended by such managing underwriter(s) in the managing underwriter's
written opinion.
(ii) Number of Piggy-Back Registrations; Expenses. The obligations of
the Company under this Paragraph 10(b) shall be unlimited with respect to
each Rightsholder. Subject to the provisions of Paragraph 10(d) hereof, the
Company will pay all Registration Expenses in connection with any
registration of Registerable Securities effected pursuant to this Paragraph
10(b), but the Company shall not be responsible for the payment of any
underwriter's discount, commission or selling concession in connection
therewith.
(iii) Withdrawal or Suspension of Registration Statement.
Notwithstanding anything contained to the contrary in this Paragraph 10(b),
the Company shall have the absolute right, whether before or after the
giving of a Company Piggy-Back Notice or Holder Notice, to determine not to
file a registration statement to which the Rightsholders shall have the
right to include their Registerable Securities therein pursuant to this
Paragraph 10(b), to withdraw such registration statement or to delay or
suspend pursuing the effectiveness of such registration statement. In the
event of such a determination after the giving of a Company Piggy-Back
Notice, the Company shall give notice of such determination to all
Rightsholders and, thereupon, (A) in the case of a determination not to
register or to withdraw such registration statement, the Company shall be
relieved of its obligation under this Paragraph 10(b) to register any of
the Registerable Securities in connection with such registration and (B) in
the case of a determination to delay the registration, the Company shall be
permitted to delay or suspend the registration of Registerable Securities
pursuant to this Paragraph 10(b) for the same period as the delay in the
registration of such other securities. No registration effected under this
Paragraph 10(b) shall relieve the Company of its obligation to effect any
registration upon demand otherwise granted to a Rightsholder under any
other agreement with the Company.
10
(c) Registration Procedures.
(i) Obligations of the Company. The Company will, in connection with
any registration pursuant to Paragraph 10(b) hereof, as expeditiously as
possible:
(A) prepare and file with the Commission a registration statement
under the Securities Act on any appropriate form chosen by the
Company, in the Company's sole discretion, which shall be available
for the sale of all Registerable Securities in accordance with the
intended method(s) of distribution thereof set forth in all applicable
Holder Notices, and use the Company's commercially reasonable best
efforts to cause such registration statement to become effective as
soon thereafter as reasonably practicable but in no event more than
100 days after receipt of such notices or requests; provided, that, at
least five business days before filing with the Commission of such
registration statement, the Company shall furnish to each Rightsholder
whose Registerable Securities are included therein draft copies of
such registration statement, including all exhibits thereto and
documents incorporated by reference therein, and, upon the reasonable
request of any such Rightsholder, shall continue to provide drafts of
such registration statement until filed, and, after such filing, the
Company shall, as diligently as practicable, provide to each such
Rightsholders such number of copies of such registration statement,
each amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus), all
exhibits thereto and documents incorporated by reference therein and
such other documents as such Rightsholder may reasonably request in
order to facilitate the disposition of the Registerable Securities
owned by such Rightsholder and included in such registration
statement; provided, further, the Company shall modify or amend the
registration statement as it relates to such Rightsholder as
reasonably requested by such Rightsholder on a timely basis, and shall
reasonably consider other changes to the registration statement (but
not including any exhibit or document incorporated therein by
reference) reasonably requested by such Rightsholder on a timely
basis, in light of the requirements of the Securities Act and any
other applicable laws and regulations; and provided, further, that the
obligation of the Company to effect such registration and/or cause
such registration statement to become effective, may be postponed for
(1) such period of time when the financial statements of the Company
required to be included in such registration statement are not
available (due solely to the fact that such financial statements have
not been prepared in the regular course of business of the Company) or
(2) any other bona fide corporate purpose, but then only for a period
not to exceed 90 days;
(B) prepare and file with the Commission such amendments and
post-effective amendments to a registration statement as may be
necessary to keep such registration statement effective for up to nine
months; and cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed to
the extent required pursuant to Rule 424 promulgated under the
Securities Act, during such nine-month period; and otherwise comply
with
11
the provisions of the Securities Act with respect to the disposition
of all Registerable Securities covered by such registration statement
during the applicable period in accordance with the intended method(s)
of disposition of such Registerable Securities set forth in such
registration statement, prospectus or supplement to such prospectus;
(C) notify the Rightsholders whose Registerable Securities are
included in such registration statement and the managing
underwriter(s), if any, of an underwritten offering of any of the
Registerable Securities included in such registration statement, and
confirm such advice in writing, (1) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and,
with respect to a registration statement or any post-effective
amendment, when the same has become effective, (2) of any request by
the Commission for amendments or supplements to a registration
statement or related prospectus or for additional information, (3) of
the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any
proceedings for that purpose, (4) if at any time the representations
and warranties of the Company contemplated by subclause (J)(1) of
Subparagraph 10(c)(i) hereof cease to be true and correct, (5) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of any of the Registerable Securities
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (6) of the happening of any event
which makes any statement made in the registration statement, the
prospectus or any document incorporated therein by reference untrue or
which requires the making of any changes in the registration statement
or prospectus so that such registration statement, prospectus or
document incorporated by reference will not contain any untrue
statement of material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(D) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement at the
earliest possible moment and to prevent the entry of such an order;
(E) use reasonable efforts to register or qualify the
Registerable Securities included in such registration statement under
such other securities or blue sky laws of such jurisdictions as any
Rightsholder whose Registerable Securities are included in such
registration statement reasonably requests in writing and do any and
all other acts and things which may be necessary or advisable to
enable such Rightsholder to consummate the disposition in such
jurisdictions of such Registerable Securities; provided, that the
Company will not be required to (1) qualify generally to do business
in any jurisdiction where it would not otherwise be required to
qualify but for this clause (E), (2) subject itself to taxation in any
such jurisdiction or (3) take any action which would subject it to
general service of process in any such jurisdiction;
12
(F) make available for inspection by each Rightsholder whose
Registerable Securities are included in such registration, any
underwriter(s) participating in any disposition pursuant to such
registration statement, and any representative, agent or employee of
or attorney or accountant retained by any such Rightsholder or
underwriter(s) (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary
to enable them to exercise their due diligence responsibility (or
establish a due diligence defense), and cause the officers, directors
and employees of the Company to supply all information reasonably
requested by any such Inspector in connection with such registration
statement; provided, that records which the Company determines, in
good faith, to be confidential and which it notifies the Inspectors
are confidential shall not be disclosed by the Inspectors, unless (1)
the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or (2) the disclosure of
such Records is required by any applicable law or regulation or any
governmental regulatory body with jurisdiction over such Rightsholder
or underwriter; provided, further, that such Rightsholder or
underwriter(s) agree that such Rightsholder or underwriter(s) will,
upon learning the disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the
Company, at the Company's expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(G) cooperate with the Rightsholder whose Registerable Securities
are included in such registration statement and the managing
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Registerable Securities to be
sold thereunder, not bearing any restrictive legends, and enable such
Registerable Securities to be in such denominations and registered in
such names as such Rightsholder or any managing underwriter(s) may
reasonably request at least two business days prior to any sale of
Registerable Securities;
(H) comply with all applicable rules and regulations of the
Commission and promptly make generally available to its security
holders an earnings statement covering a period of twelve months
commencing, (1) in an underwritten offering, at the end of any fiscal
quarter in which Registerable Securities are sold to underwriter(s),
or (2) in a non-underwritten offering, with the first month of the
Company's first fiscal quarter beginning after the effective date of
such registration statement, which earnings statement in each case
shall satisfy the provisions of Section 11(a) of the Securities Act;
(I) provide a CUSIP number for all Registerable Securities not
later than the effective date of the registration statement relating
to the first public offering of Registerable Securities of the Company
pursuant hereto;
(J) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions
13
reasonably requested by the Rightsholders holding a majority of the
Registerable Securities included in such registration statement or the
managing underwriter(s) in order to expedite and facilitate the
disposition of such Registerable Securities and in such connection,
whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration, (1) make such
representations and warranties, if any, to the holders of such
Registerable Securities and any underwriter(s) with respect to the
registration statement, prospectus and documents incorporated by
reference, if any, in form, substance and scope as are customarily
made by issuers to underwriter(s) in underwritten offerings and
confirm the same if and when requested, (2) obtain opinions of counsel
to the Company and updates thereof addressed to each such Rightsholder
and the underwriter(s), if any, with respect to the registration
statement, prospectus and documents incorporated by reference, if any,
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Rightsholders and underwriter(s), (3) obtain a "cold
comfort" letter and updates thereof from the Company's independent
certified public accountants addressed to such Rightsholders and to
the underwriter(s), if any, which letters shall be in customary form
and cover matters of the type customarily covered in "cold comfort"
letters by accountants in connection with underwritten offerings, and
(4) deliver such documents and certificates as may be reasonably
requested by the Rightsholders holding a majority of such Registerable
Securities and managing underwriter(s), if any, to evidence compliance
with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company; each such action
required by this clause (J) shall be done at each closing under such
underwriting or similar agreement or as and to the extent required
thereunder; and
(K) if requested by the holders of a majority of the Registerable
Securities included in such registration statement, use its best
efforts to cause all Registerable Securities which are included in
such registration statement to be listed, subject to notice of
issuance, by the date of the first sale of such Registerable
Securities pursuant to such registration statement, on each securities
exchange, if any, on which securities similar to the Registered
Securities are listed.
(ii) Obligations of Rightsholders. In connection with any registration of
Registerable Securities of a Rightsholder pursuant to Paragraph 10(b) hereof:
(A) The Company may require that each Rightsholder whose Registerable
Securities are included in such registration statement furnish to the
Company such information regarding the distribution of such Registerable
Securities and such Rightsholder as the Company may from time to time
reasonably request in writing; and
(B) Each Rightsholder, upon receipt of any notice from the Company of
the happening of any event of the kind described in subclauses (2), (3),
(5) and (6) of clause 10(c)(i)(C), shall forthwith discontinue disposition
of
14
Registerable Securities pursuant to the registration statement covering
such Registerable Securities until such Rightsholder's receipt of the
copies of the supplemented or amended prospectus contemplated by subclause
(1) of clause 10(c)(i)(C), or until such Rightsholder is advised in writing
(the "Advice") by the Company that the use of the applicable prospectus may
be resumed, and until such Rightsholder has received copies of any
additional or supplemental filings which are incorporated by reference in
or to be attached to or included with such prospectus, and, if so directed
by the Company, such Rightsholder will deliver to the Company (at the
expense of the Company) all copies, other than permanent file copies then
in the possession of such Rightsholder, of the current prospectus covering
such Registerable Securities at the time of receipt of such notice; the
Company shall have the right to demand that such Rightsholder or other
holder verify its agreement to the provisions of this clause (B) in any
Holder Notice of the Rightsholder or in a separate document executed by the
Rightsholder.
(d) Registration Expenses. All expenses incident to the performance of or
compliance with this Agreement by the Company, including, without imitation, all
registration and filing fees of the Commission, National Association of
Securities Dealers, Inc. and other agencies, fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications of the Registerable
Securities), rating agency fees, printing expenses, messenger and delivery
expenses, internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the fees and expenses incurred in connection with the listing, if any, of the
Registerable Securities on any securities exchange and fees and disbursements of
counsel for the Company and the Company's independent certified public
accountants (including the expenses of any special audit or "cold comfort"
letters required by or incidental to such performance), Securities Act or other
liability insurance (if the Company elects to obtain such insurance), the fees
and expenses of any special experts retained by the Company in connection with
such registration and the fees and expenses of any other person retained by the
Company (but not including any underwriting discounts or commissions
attributable to the sale of Registerable Securities or other out-of-pocket
expenses of the Rightsholders, or the agents who act on their behalf, unless
reimbursement is specifically approved by the Company) will be borne by the
Company. All such expenses are herein referred to as "Registration Expenses."
(e) Indemnification: Contribution.
(i) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each Rightsholder,
its officers and directors and each person who controls such Rightsholder
(within the meaning of the Securities Act), if any, and any agent thereof
against all losses, claims, damages, liabilities and expenses incurred by
such party pursuant to any actual or threatened suit, action, proceeding or
investigation (including reasonable attorney's fees and expenses of
investigation) arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus or any omission or alleged omission to
state therein a material fact required to be stated
15
therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made)
not misleading, except insofar as the same arise out of or are based upon,
any such untrue statement or omission based upon information with respect
to such Rightsholder furnished in writing to the Company by such
Rightsholder expressly for use therein.
(ii) Indemnification by Rightsholder. In connection with any
registration statement in which a Rightsholder is participating, each such
Rightsholder will be required to furnish to the Company in writing such
information with respect to such Rightsholder as the Company reasonably
requests for use in connection with any such registration statement or
prospectus, and each Rightsholder agrees to the extent it is such a holder
of Registerable Securities included in such registration statement, and
each other such holder of Registerable Securities included in such
Registration Statement will be required to agree, to indemnify, to the full
extent permitted by law, the Company, the directors and officers of the
Company and each person who controls the Company (within the meaning of the
Securities Act) and any agent thereof, against any losses, claims, damages,
liabilities and expenses (including reasonable attorney's fees and expenses
of investigation incurred by such party pursuant to any actual or
threatened suit, action, proceeding or investigation arising out of or
based upon any untrue or alleged untrue statement of a material fact or any
omission or alleged omission of a material fact necessary, to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they are made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is based upon
information relating to such Rightsholder or other holder furnished in
writing to the Company expressly for use therein.
(iii) Conduct of Indemnification Proceedings. Promptly after receipt
by an indemnified party under this Paragraph 10(e) of written notice of the
commencement of any action, proceeding, suit or investigation or threat
thereof made in writing for which such indemnified party may claim
indemnification or contribution pursuant to this Agreement, such
indemnified party shall notify in writing the indemnifying party of such
commencement or threat; but the omission so to notify the indemnifying
party shall not relieve the indemnifying party from any liability which the
indemnifying party may have to any indemnified party (A) hereunder, unless
the indemnifying party is actually prejudiced thereby, or (B) otherwise
than under this Paragraph 10(e). In case any such action, suit or
proceeding shall be brought against any indemnified party, and the
indemnified party shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein
and the indemnifying party shall assume the defense thereof, with counsel
reasonably satisfactory to the indemnified party, and the obligation to pay
all expenses relating thereto. The indemnified party shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (A) the
indemnifying party has agreed to pay such fees and expenses, (B) the
indemnifying party shall have failed to assume the defense of such action,
suit or proceeding or to employ counsel reasonably satisfactory to the
indemnified party therein or to pay all expenses relating thereto or (C)
the named parties to any such action or proceeding
16
(including any impleaded parties) include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to the
indemnified party which are different from or additional to those available
to the indemnifying party and which may result in a conflict between the
indemnifying party and such indemnified party (in which case, if the
indemnified party notifies the indemnifying party in writing that the
indemnified party elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action or proceeding on behalf of the
indemnified party; it being understood, however, that the indemnifying
party shall not, in connection with any one such action, suit or proceeding
or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for the indemnified party,
which firm shall be designated in writing by the indemnified party).
(iv) Contribution. If the indemnification provided for in this
Paragraph 10(e) from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses (A) in such proportion as
is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
or (B) if the allocation provided by clause (A) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other but also the relative fault of the
indemnifying party and indemnified party, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
the indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages. liabilities and expenses referred to
above shall be deemed to include, subject to the limitation set forth in
Subparagraph 10(e)(v), any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Subparagraph 10(e)(iv) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in clauses (A) and (B) of the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
17
(v) Limitation. Anything to the contrary contained in this Paragraph
10(e) or in Paragraph 10(f) notwithstanding, no holder of Registerable
Securities shall be liable for indemnification and contribution payments
aggregating an amount in excess of the maximum amount received by such
holder in connection with any sale of Registerable Securities as
contemplated herein.
(f) Participation in Underwritten Registration. No Rightsholder may
participate in any underwritten registration hereunder unless such Rightsholder
(i) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and to comply with Regulation M under the Exchange Act and
(ii) completes and executes all questionnaires, appropriate and limited powers
of attorney, escrow agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangement;
provided, that all such documents shall be consistent with the provisions of
Paragraph 10(d).
11. Redemption. The Warrants are redeemable by the Company, in whole but not in
part, on not less than 30 days' prior written notice (the "Redemption Notice"),
at a redemption price (the "Redemption Price") of $.001 per Warrant, at any time
on or after the Warrant Commencement Date. The Warrantholders will have full
rights to exercise all Warrants subject to the Redemption Notice until 5:00
p.m., Henderson, Nevada time (the "Accelerated Expiration Time"), on the
business day immediately preceding the date (the "Redemption Date") fixed for
redemption in the Redemption Notice. Notwithstanding anything to the contrary
contained in this Agreement, (a) the Company shall have the option, without
further compensation to the Warrantholder other than the payment of the
Redemption Price per Warrant, to cause any or all of those Warrants (each, a
"Non-Exercised Warrant") which were not properly exercised on or before the
Accelerated Expiration Time to be assigned to one or more third parties (each, a
"Standby Purchaser"), effective immediately following the Accelerated Expiration
Time, for the consideration equal to $.001 per Non-Exercised Warrant payable to
the Company, and (b) each Standby Purchaser shall have the right to exercise the
Non- Exercised Warrants so assigned to such Standby Purchaser through the
fourteenth day following the Redemption Date.
12. Automatic Modification of the Terms and Provisions of the Warrants in the
Event of a Registered Offering of Securities of the Company. Notwithstanding
anything contained in this Warrant Certificate to the contrary, in the event (a
"Public Offering") that, at any time on or prior to the Expiration Date, the
Company shall sell and issue warrants (each, a "Public Warrant") pursuant to an
effective registration statement under the Securities Act, whether such Public
Warrants are sold separately, as a unit with other securities of the Company,
together with other securities of the Company or otherwise, then and immediately
upon such sale and issuance, each Warrant evidenced by this Warrant Certificate
shall automatically be converted into a Public Warrant, on an one-for-one (1:1)
basis, with the terms and provisions of this Warrant Certificate automatically
being amended and modified in their entirety to the terms and conditions
governing the Public Warrants. In the event of a Public Offering, this Warrant
Certificate shall be surrendered to the Company or such agent(s) as may be
appointed by the Company and whose identity is given by notice to Warrantholder.
Upon surrender of this Warrant Certificate to the Company or to such agent(s) as
may be appointed by the Company, the Warrantholder shall be entitled to a new
warrant
18
certificate evidencing the Public Warrants as so converted, amended and modified
and this Warrant Certificate as so surrendered shall be canceled. Until so
surrendered, this Warrant Certificate will be deemed from and after the Public
Offering, for all corporate purposes, to represent solely the right to receive
Public Warrants equal to the number of Warrants evidenced by this Warrant
Certificate upon surrender of this Warrant Certificate. Notwithstanding anything
to the contrary in this Section 12, neither the Company nor any other party
shall be liable to Warrantholder or any other party for any amount properly paid
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
13. Miscellaneous. This Warrant Certificate and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This certificate is deemed to have been delivered in the State of
Nevada and shall be construed and enforced in accordance with and governed by
the laws of such State. The headings in this Warrant Certificate are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof.
14. Expiration. Unless as hereinafter provided, the right to exercise the
Warrants shall expire at the Expiration Time.
Dated: As of January 20, 2000
Crest View Inc.
By:
-------------------------------------
Johnny R. Thomas, President
ATTEST:
- ----------------------------------------
Elliot Lutzker, Secretary
19
EXHIBIT A
FORM OF UNDERLYING WARRANT CERTIFICATE
NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES OF
COMMON STOCK, OR ANY OTHER SECURITIES, ISSUABLE UPON EXERCISE OF SUCH WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK, OR ANY OTHER SECURITIES,
ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT
BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES, OR OTHER
SECURITIES, UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH
WARRANTS AND SUCH SHARES, OR OTHER SECURITIES, TO THE EFFECT THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS.
VOID AFTER 5:00 P.M. ON JANUARY 19, 2005
CREST VIEW INC.
WARRANT CERTIFICATE
__________ Redeemable Common Stock Purchase Warrants
Henderson, Nevada
Warrant Certificate No. OIB-____ _____________, 200_
THIS IS TO CERTIFY THAT, for value received, ____________________________
("Warrantholder") is the registered owner of the number of redeemable common
stock purchase warrants (each, a "Warrant") of Crest View Inc., a Nevada
corporation (the "Company"), set forth above, each Warrant entitling the owner
thereof to purchase from the Company, at a purchase price of $9.00 per Warrant
(the "Purchase Price"), at any time on or after January 20, 2000 (the "Warrant
Commencement Date") and terminating at 5:00 p.m., New York City time, on January
19, 2005 (the "Expiration Time"), one duly authorized, validly issued, fully
paid and non-assessable share (each, a "Warrant Share") of the common stock, par
value $.001 per share ("Common Stock"), of the Company, all subject to the terms
and conditions contained herein. The number of Warrants evidenced by this
Warrant Certificate (and the number and kind of securities which may be
purchased upon exercise hereof) set forth above, and the Purchase Price per
share set forth above, are as of the date hereof. As provided herein, the
Purchase Price and the number of shares of Common Stock, or other securities,
which may be purchased upon the exercise of the Warrants evidenced by this
Warrant Certificate are, upon the happening of certain events, subject to
modification and adjustment. As also provided herein, the Warrants are, upon the
happening of certain events, subject to redemption.
A - 1
This Warrant Certificate, together with any warrant certificate(s) issued
in replacement or substitution hereof (as provided for herein) evidencing all or
part of the Warrants evidenced hereby, are sometimes collectively referred to
herein as the "Warrant Certificates."
The rights of the registered holder of this Warrant Certificate shall be
subject to the following further terms and conditions:
1. Exercise of Warrants.
(a) The Warrants may be exercised, in whole or in part, at any time and
from time to time, during the period commencing on the Commencement Date and
terminating at the Expiration Time by surrendering this Warrant Certificate,
with the purchase form provided for herein duly executed by the Warrantholder or
by the Warrantholder's duly authorized attorney-in-fact, at the principal office
of the Company, presently located at 1700 West Horizon Ridge Parkway, Henderson,
Nevada 89012, or at such other office or agency in the United States as the
Company may designate by notice in writing to the Warrantholder (in either
event, the "Company Offices"), accompanied by payment in full, either in the
form of cash, bank cashier's check or certified check payable to the order of
the Company, of the Purchase Price payable in respect of the Warrants being
exercised. If fewer than all of the Warrants are exercised, the Company shall,
upon each exercise prior to the Expiration Time, execute and deliver to the
Warrantholder a new Warrant Certificate (dated as of the date hereof) evidencing
the balance of the Warrants that remain exercisable.
(b) On the day immediately following the date of a valid exercise of any
Warrants, the Warrantholder exercising same shall be deemed to have become the
holder of record for all purposes of the Warrant Shares to which such valid
exercise relates.
(c) As soon as practicable, but not in excess of ten days, after the
exercise of all or part of the Warrants evidenced by this Warrant Certificate,
the Company, at its expense (including the payment by it of any applicable issue
taxes), will cause to be issued in the name of and delivered to the
Warrantholder, or such other party identified in the purchase form, certificates
evidencing the number of duly authorized, validly issued, fully paid and
non-assessable Warrant Shares to which the Warrantholder, or such other party
identified in the purchase form, shall be entitled upon such exercise.
(d) No certificates for fractional Warrant Shares shall be issued upon the
exercise of any of the Warrants but, in lieu thereof, the Company shall, upon
exercise of all the Warrants, round up any fractional Warrant Shares to the
nearest whole share of Common Stock.
2. Issuance of Common Stock and Warrants; Reservation of Warrant Shares. The
Company covenants and agrees that:
(a) all Warrant Shares which may be issued upon the exercise of all or part
of the Warrants will, upon issuance in accordance with the terms hereof, be
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges with respect to the issue thereof;
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(b) at all times prior to the Expiration Time, the Company shall keep
reserved for issuance a sufficient number of authorized shares of Common Stock
to permit the exercise in full of the Warrants evidenced by this Warrant
Certificate; and
(c) if any shares of Common Stock to be reserved for the purpose of the
issuance of Warrant Shares upon the exercise of Warrants require registration
with, or approval of, any governmental authority under any federal or state law
before such shares may be validly issued or delivered upon exercise, then the
Company will promptly use its best efforts to effect such registration or obtain
such approval, as the case may be.
3. Adjustments of Purchase Price, Number and Character of Warrant Shares and
Number of Warrants. The Purchase Price, the number and kind of securities
purchasable upon the exercise of each Warrant shall be subject to adjustment
from time to time upon the happening of the events enumerated in this Section 3.
(a) Stock Dividends, Subdivisions and Combinations. In case the Company
shall at any time on or after the Commencement Date and on or before the
Expiration Time:
(i) 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 its
outstanding shares of Common Stock;
(ii) subdivide or reclassify the outstanding shares of Common Stock
into a greater number of shares;
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares of Common Stock; or
(iv) issue by reclassification of its 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 corporation);
then the number and kind of Warrant Shares purchasable upon exercise of each
Warrant outstanding immediately prior thereto shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company which the Warrantholder would
have owned or have been entitled to receive after the happening of any of the
events described above had such 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 Warrant Shares
purchasable upon the exercise of each then outstanding Warrant pursuant to this
Paragraph 3(a), the Purchase 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 Warrant immediately after such adjustment into
the total amount payable upon exercise of such Warrant in full immediately prior
to such adjustment. An adjustment made pursuant to this Paragraph 3(a) shall
become effective immediately after the effective date of such event
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retroactive to the record date for any such event. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) Extraordinary Dividends. In case the Company shall at any time on or
after the Commencement Date and on or before the Expiration Time fix a record
date for the issuance of rights, options, or warrants to all holders of its
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 3(d) below) on such
record date, then the Purchase Price shall be adjusted by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, of
which (i) 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 (ii) 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; 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 Purchase Price shall be readjusted (but only with respect to
Warrants exercised after such expiration) to the Purchase 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 mailed to the
Warrantholder. 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.
(c) Extraordinary Distributions. In case the Company shall, at any time on
or after the Commencement Date and on or before the Expiration Time, distribute
to all holders of its 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 its indebtedness or assets (excluding cash
dividends and distributions payable out of consolidated net income or earned
surplus in accordance with Delaware law and dividends or distributions payable
in shares of stock described in Paragraph 3(a) above) 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 Purchase Price shall be
adjusted by multiplying the Purchase Price in effect immediately prior to the
record date for such distribution by a fraction, of which (i) the numerator
shall be the current Market Price per share of
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Common Stock (as defined in Paragraph 3(d)) 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 notice to
the Warrantholders) 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 (ii) 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.
(d) Current Market Price Defined. For the purpose of any computation under
Paragraphs 3(b) and/or 3(c), 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.
(e) 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 Paragraph 3(a)), 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 Paragraph 3(a) 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 Commencement Date and on or before the
Expiration Time, each 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 Warrant
Certificate, 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
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exercise of such 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 Section 3 with respect to the rights and interests thereafter of the
Warrantholder 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 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
Warrantholder 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 Paragraph 3(e).
(f) Minimum Adjustment. Except as hereinafter provided, no adjustment of
the Purchase Price hereunder shall be made if such adjustment results in a
change of the Purchase Price then in effect of less than five cents ($.05) per
share. Any adjustment of less than five cents ($.05) per share of any Purchase
Price shall be carried forward and shall be made at the time of and together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward, amounts to five cents ($.05) per share or more. However, upon
exercise of this Warrant Certificate, the Company shall make all necessary
adjustments (to the nearest cent) not theretofore made to the Purchase Price up
to and including the effective date upon which this Warrant Certificate is
exercised.
(g) Notice of Adjustments. Whenever the Purchase Price shall be adjusted
pursuant to this Section 3, 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), by first class mail
postage prepaid to each Warrantholder.
(h) Adjustments to Other Securities. In the event that at any time, as a
result of an adjustment made pursuant to this Section 3, the Warrantholder 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 Warrant and the purchase 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 with
respect to the shares of Common Stock contained in Paragraphs 3(a), 3(b), 3(c),
and 3(e).
(i) Deferral of Issuance of Additional Shares in Certain Circumstances. In
any case in which this Section 3 shall require that an adjustment in the
Purchase 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 Warrant exercised after such record date the shares of Common
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Stock, if any, issuable upon such exercise over and above the Warrant Shares, if
any, issuable upon such exercise on the basis of the Purchase Price 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.
(j) Company Right to Reduce the Purchase Price. Notwithstanding anything
contained in this Warrant Certificate to the contrary, the Company has the
right, exercisable in the Company's sole discretion, at any time prior to the
Expiration Time, and from time to time, on not less than 30 days' prior written
notice (each, a "Reduced Purchase Price Notice"), to reduce the Purchase Price
as then in effect; provided that the period in which such reduced Purchase 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 Purchase Price Notice.
4. Definition of Common Stock. The Common Stock issuable upon exercise of the
Warrants shall be the Common Stock as constituted on January 20, 2000, except as
otherwise provided in Section 3.
5. Replacement of Warrant Certificates. If this Warrant Certificate shall be
lost, stolen, mutilated or destroyed, the Company shall, on such terms as to
indemnity or otherwise as the Company may in its discretion reasonably impose,
issue a new certificate of like tenor or date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock which
may be subscribed for and purchased hereunder. Any such new certificate 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.
6. Registration. This Warrant Certificate, as well as all other warrant
certificates representing Warrants shall be numbered and shall be registered in
a register (the "Warrant Register") maintained at the Company Offices as they
are issued. The Warrant Register shall list the name, address and Social
Security or other Federal Identification Number, if any, of all Warrantholders.
The Company shall be entitled to treat the Warrantholder as set forth in the
Warrant Register as the owner in fact of the Warrants as set forth therein for
all purposes and shall not be bound to recognize any equitable or other claim to
or interest in such Warrants on the part of any other person, and shall not be
liable for any registration of transfer of Warrants that are registered or to be
registered in the name of a fiduciary or the nominee of a fiduciary unless made
with the actual knowledge that a fiduciary or nominee is committing a breach of
trust in requesting such registration of transfer, or with such knowledge of
such facts that its participation therein amounts to bad faith.
7. Transfer. NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR
THE SHARES OF COMMON STOCK, OR ANY OTHER SECURITIES, ISSUABLE UPON EXERCISE OF
SUCH WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
SUCH WARRANTS HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK, OR ANY OTHER
SECURITIES, ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED,
FOR INVESTMENT PURPOSES AND NOT WITH A
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VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES, OR OTHER SECURITIES, UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH WARRANTS AND SUCH SHARES,
OR OTHER SECURITIES, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT AND SUCH STATE SECURITIES LAWS.
8. Exchange of Warrant Certificates. This Warrant Certificate may be exchanged
for another certificate or certificates entitling the Warrantholder thereof to
purchase a like aggregate number of Warrant Shares as this Warrant Certificate
entitles such Warrantholder to purchase. A Warrantholder desiring to so exchange
this Warrant Certificate shall make such request in writing delivered to the
Company, and shall surrender this Warrant Certificate therewith. Thereupon, the
Company shall execute and deliver to the person entitled thereto a new
certificate or certificates, as the case may be, as so requested.
9. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given when delivered in person, against written receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and, if to the Company, at the Company Offices or such other address as the
Company shall give notice thereof to the Warrantholder in accordance with this
Section 9.
10. Registration Rights.
(a) Defined Terms. As used in this Section 10, terms defined elsewhere
herein shall have their assigned meanings and each of the following terms shall
have the following meanings (such definitions to be applicable to both the
plural and singular of the terms defined):
(i) Registerable Securities. The term "Registerable Securities" shall
mean any of the Warrant Shares or other securities issuable upon exercise
of any of the Warrants. For the purposes of this Section 10, securities
will cease to be Registerable Securities when (A) a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"),
covering such Registerable Securities has been declared effective and (1)
such Registerable Securities have been disposed of pursuant to such
effective registration statement or (2) such registration statement has
remained effective for 270 consecutive days, (B) such Registerable
Securities are distributed to the public pursuant to the Securities Act or
pursuant to an exemption from the registration requirements of the
Securities Act, including, without limitation, Rules 144 and 144A
promulgated under the Securities Act or (C) such Registerable Securities
have been otherwise transferred and the Company, in accordance with
applicable law and regulations, has delivered new certificates or other
evidences of ownership for such securities which are not subject to any
stop transfer order or other restriction on transfer.
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(ii) Rightsholders. The term "Rightsholders" shall include the
Warrantholder, all successors and assigns of the Warrantholders and all
transferees of Registerable Securities where such transfer affirmatively
includes the transfer and assignment of the rights of the
transferor-Warrantholder under this Agreement with respect to the
transferred Registerable Securities and such transferee agrees in writing
to assume all of the transferor-Warrantholder's agreements, obligations and
liabilities under this Article 10 with respect to the transferred
Registerable Securities.
(iii) Interpretations of Terms. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Section 10 shall
refer to this Section 10 as a whole and not to any particular provision of
this Section 10, and subsection, paragraph, clause, schedule and exhibit
references are to this Section 10 unless otherwise specified.
(b) Piggy-Back Registration.
(i) If, at any time on or after the six months after the effective
date of a registration statement under the Securities Act with respect to
any shares of Common Stock and on or prior to two years from the Expiration
Time, the Company proposes to file a registration statement under the
Securities Act with respect to an offering by the Company or any other
party of any class of equity security similar to any Registerable
Securities (other than a registration statement on Form S-4 or S-8 or any
successor form or a registration statement filed solely in connection with
an exchange offer, a business combination transaction or an offering of
securities solely to the existing stockholders or employees of the
Company), then the Company, on each such occasion, shall give written
notice (each, a "Company Piggy-Back Notice") of such proposed filing to all
of the Rightsholders owning Registerable Securities at least fifteen days
before the anticipated filing date of such registration statement, and such
Company Piggy-Back Notice also shall be required to offer to such
Rightsholders the opportunity to register such aggregate number of
Registerable Securities as each such Rightsholder may request. Each such
Rightsholder shall have the right, exercisable for the five days
immediately following the giving of a Company Piggy- Back Notice, to
request, by written notice (each, a "Holder Notice") to the Company, the
inclusion of all or any portion of the Registerable Securities of such
Rightsholders in such registration statement. The Company shall use
reasonable efforts to cause the managing underwriter(s) of a proposed
underwritten offering to permit the inclusion of the Registerable
Securities which were the subject of all Holder Notices in such
underwritten offering on the same terms and conditions as any similar
securities of the Company included therein. Notwithstanding anything to the
contrary contained in this Subparagraph 10(b)(i), if the managing
underwriter(s) of such underwritten offering or any proposed underwritten
offering delivers a written opinion to the Rightsholders of Registerable
Securities which were the subject of all Holder Notices that the total
amount and kind of securities which they, the Company and any other person
intend to include in such offering is such as to materially and adversely
affect the success of such offering, then the amount of securities to be
offered for the accounts of such Rightsholders and persons other than the
Company shall be eliminated or reduced pro rata (based on the amount of
securities owned by such Rightsholders and
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other persons which carry registration rights) to the extent necessary to
reduce the total amount of securities to be included in such offering to
the amount recommended by such managing underwriter(s) in the managing
underwriter's written opinion.
(ii) Number of Piggy-Back Registrations; Expenses. The obligations of
the Company under this Paragraph 10(b) shall be unlimited with respect to
each Rightsholder. Subject to the provisions of Paragraph 10(d) hereof, the
Company will pay all Registration Expenses in connection with any
registration of Registerable Securities effected pursuant to this Paragraph
10(b), but the Company shall not be responsible for the payment of any
underwriter's discount, commission or selling concession in connection
therewith.
(iii) Withdrawal or Suspension of Registration Statement.
Notwithstanding anything contained to the contrary in this Paragraph 10(b),
the Company shall have the absolute right, whether before or after the
giving of a Company Piggy-Back Notice or Holder Notice, to determine not to
file a registration statement to which the Rightsholders shall have the
right to include their Registerable Securities therein pursuant to this
Paragraph 10(b), to withdraw such registration statement or to delay or
suspend pursuing the effectiveness of such registration statement. In the
event of such a determination after the giving of a Company Piggy-Back
Notice, the Company shall give notice of such determination to all
Rightsholders and, thereupon, (A) in the case of a determination not to
register or to withdraw such registration statement, the Company shall be
relieved of its obligation under this Paragraph 10(b) to register any of
the Registerable Securities in connection with such registration and (B) in
the case of a determination to delay the registration, the Company shall be
permitted to delay or suspend the registration of Registerable Securities
pursuant to this Paragraph 10(b) for the same period as the delay in the
registration of such other securities. No registration effected under this
Paragraph 10(b) shall relieve the Company of its obligation to effect any
registration upon demand otherwise granted to a Rightsholder under any
other agreement with the Company.
(c) Registration Procedures.
(i) Obligations of the Company. The Company will, in connection with
any registration pursuant to Paragraph 10(b) hereof, as expeditiously as
possible:
(A) prepare and file with the Commission a registration statement
under the Securities Act on any appropriate form chosen by the
Company, in the Company's sole discretion, which shall be available
for the sale of all Registerable Securities in accordance with the
intended method(s) of distribution thereof set forth in all applicable
Holder Notices, and use the Company's commercially reasonable best
efforts to cause such registration statement to become effective as
soon thereafter as reasonably practicable but in no event more than
100 days after receipt of such notices or requests; provided, that, at
least five business days before filing with the Commission of such
registration statement, the Company shall furnish to each Rightsholder
whose Registerable Securities are included therein draft copies of
such registration statement, including all exhibits thereto and
documents incorporated
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by reference therein, and, upon the reasonable request of any such
Rightsholder, shall continue to provide drafts of such registration
statement until filed, and, after such filing, the Company shall, as
diligently as practicable, provide to each such Rightsholders such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus), all exhibits
thereto and documents incorporated by reference therein and such other
documents as such Rightsholder may reasonably request in order to
facilitate the disposition of the Registerable Securities owned by
such Rightsholder and included in such registration statement;
provided, further, the Company shall modify or amend the registration
statement as it relates to such Rightsholder as reasonably requested
by such Rightsholder on a timely basis, and shall reasonably consider
other changes to the registration statement (but not including any
exhibit or document incorporated therein by reference) reasonably
requested by such Rightsholder on a timely basis, in light of the
requirements of the Securities Act and any other applicable laws and
regulations; and provided, further, that the obligation of the Company
to effect such registration and/or cause such registration statement
to become effective, may be postponed for (1) such period of time when
the financial statements of the Company required to be included in
such registration statement are not available (due solely to the fact
that such financial statements have not been prepared in the regular
course of business of the Company) or (2) any other bona fide
corporate purpose, but then only for a period not to exceed 90 days;
(B) prepare and file with the Commission such amendments and
post-effective amendments to a registration statement as may be
necessary to keep such registration statement effective for up to nine
months; and cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed to
the extent required pursuant to Rule 424 promulgated under the
Securities Act, during such nine-month period; and otherwise comply
with the provisions of the Securities Act with respect to the
disposition of all Registerable Securities covered by such
registration statement during the applicable period in accordance with
the intended method(s) of disposition of such Registerable Securities
set forth in such registration statement, prospectus or supplement to
such prospectus;
(C) notify the Rightsholders whose Registerable Securities are
included in such registration statement and the managing
underwriter(s), if any, of an underwritten offering of any of the
Registerable Securities included in such registration statement, and
confirm such advice in writing, (1) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and,
with respect to a registration statement or any post-effective
amendment, when the same has become effective, (2) of any request by
the Commission for amendments or supplements to a registration
statement or related prospectus or for additional information, (3) of
the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any
proceedings for that purpose, (4) if at any time the representations
and warranties of the Company
A - 11
contemplated by subclause (J)(1) of Subparagraph 10(c)(i) hereof cease
to be true and correct, (5) of the receipt by the Company of any
notification with respect to the suspension of the qualification of
any of the Registerable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose and (6)
of the happening of any event which makes any statement made in the
registration statement, the prospectus or any document incorporated
therein by reference untrue or which requires the making of any
changes in the registration statement or prospectus so that such
registration statement, prospectus or document incorporated by
reference will not contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(D) make reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement at the
earliest possible moment and to prevent the entry of such an order;
(E) use reasonable efforts to register or qualify the
Registerable Securities included in such registration statement under
such other securities or blue sky laws of such jurisdictions as any
Rightsholder whose Registerable Securities are included in such
registration statement reasonably requests in writing and do any and
all other acts and things which may be necessary or advisable to
enable such Rightsholder to consummate the disposition in such
jurisdictions of such Registerable Securities; provided, that the
Company will not be required to (1) qualify generally to do business
in any jurisdiction where it would not otherwise be required to
qualify but for this clause (E), (2) subject itself to taxation in any
such jurisdiction or (3) take any action which would subject it to
general service of process in any such jurisdiction;
(F) make available for inspection by each Rightsholder whose
Registerable Securities are included in such registration, any
underwriter(s) participating in any disposition pursuant to such
registration statement, and any representative, agent or employee of
or attorney or accountant retained by any such Rightsholder or
underwriter(s) (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary
to enable them to exercise their due diligence responsibility (or
establish a due diligence defense), and cause the officers, directors
and employees of the Company to supply all information reasonably
requested by any such Inspector in connection with such registration
statement; provided, that records which the Company determines, in
good faith, to be confidential and which it notifies the Inspectors
are confidential shall not be disclosed by the Inspectors, unless (1)
the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or (2) the disclosure of
such Records is required by any applicable law or regulation or any
governmental regulatory body with jurisdiction over such Rightsholder
or underwriter; provided, further, that such Rightsholder or
underwriter(s) agree that
A - 12
such Rightsholder or underwriter(s) will, upon learning the disclosure
of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at the Company's expense,
to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(G) cooperate with the Rightsholder whose Registerable Securities
are included in such registration statement and the managing
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Registerable Securities to be
sold thereunder, not bearing any restrictive legends, and enable such
Registerable Securities to be in such denominations and registered in
such names as such Rightsholder or any managing underwriter(s) may
reasonably request at least two business days prior to any sale of
Registerable Securities;
(H) comply with all applicable rules and regulations of the
Commission and promptly make generally available to its security
holders an earnings statement covering a period of twelve months
commencing, (1) in an underwritten offering, at the end of any fiscal
quarter in which Registerable Securities are sold to underwriter(s),
or (2) in a non-underwritten offering, with the first month of the
Company's first fiscal quarter beginning after the effective date of
such registration statement, which earnings statement in each case
shall satisfy the provisions of Section 11(a) of the Securities Act;
(I) provide a CUSIP number for all Registerable Securities not
later than the effective date of the registration statement relating
to the first public offering of Registerable Securities of the Company
pursuant hereto;
(J) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions reasonably requested by the Rightsholders holding a majority
of the Registerable Securities included in such registration statement
or the managing underwriter(s) in order to expedite and facilitate the
disposition of such Registerable Securities and in such connection,
whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration, (1) make such
representations and warranties, if any, to the holders of such
Registerable Securities and any underwriter(s) with respect to the
registration statement, prospectus and documents incorporated by
reference, if any, in form, substance and scope as are customarily
made by issuers to underwriter(s) in underwritten offerings and
confirm the same if and when requested, (2) obtain opinions of counsel
to the Company and updates thereof addressed to each such Rightsholder
and the underwriter(s), if any, with respect to the registration
statement, prospectus and documents incorporated by reference, if any,
covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Rightsholders and underwriter(s), (3) obtain a "cold
comfort" letter and updates thereof from the Company's independent
certified public accountants addressed to such Rightsholders and to
the underwriter(s), if any, which letters shall be in
A - 13
customary form and cover matters of the type customarily covered in
"cold comfort" letters by accountants in connection with underwritten
offerings, and (4) deliver such documents and certificates as may be
reasonably requested by the Rightsholders holding a majority of such
Registerable Securities and managing underwriter(s), if any, to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company;
each such action required by this clause (J) shall be done at each
closing under such underwriting or similar agreement or as and to the
extent required thereunder; and
(K) if requested by the holders of a majority of the Registerable
Securities included in such registration statement, use its best
efforts to cause all Registerable Securities which are included in
such registration statement to be listed, subject to notice of
issuance, by the date of the first sale of such Registerable
Securities pursuant to such registration statement, on each securities
exchange, if any, on which securities similar to the Registered
Securities are listed.
(ii) Obligations of Rightsholders. In connection with any registration
of Registerable Securities of a Rightsholder pursuant to Paragraph 10(b)
hereof:
(A) The Company may require that each Rightsholder whose
Registerable Securities are included in such registration statement
furnish to the Company such information regarding the distribution of
such Registerable Securities and such Rightsholder as the Company may
from time to time reasonably request in writing; and
(B) Each Rightsholder, upon receipt of any notice from the
Company of the happening of any event of the kind described in
subclauses (2), (3), (5) and (6) of clause 10(c)(i)(C), shall
forthwith discontinue disposition of Registerable Securities pursuant
to the registration statement covering such Registerable Securities
until such Rightsholder's receipt of the copies of the supplemented or
amended prospectus contemplated by subclause (1) of clause
10(c)(i)(C), or until such Rightsholder is advised in writing (the
"Advice") by the Company that the use of the applicable prospectus may
be resumed, and until such Rightsholder has received copies of any
additional or supplemental filings which are incorporated by reference
in or to be attached to or included with such prospectus, and, if so
directed by the Company, such Rightsholder will deliver to the Company
(at the expense of the Company) all copies, other than permanent file
copies then in the possession of such Rightsholder, of the current
prospectus covering such Registerable Securities at the time of
receipt of such notice; the Company shall have the right to demand
that such Rightsholder or other holder verify its agreement to the
provisions of this clause (B) in any Holder Notice of the Rightsholder
or in a separate document executed by the Rightsholder.
(d) Registration Expenses. All expenses incident to the performance of or
compliance with this Agreement by the Company, including, without imitation, all
registration and
A - 14
filing fees of the Commission, National Association of Securities Dealers, Inc.
and other agencies, fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registerable Securities), rating agency fees,
printing expenses, messenger and delivery expenses, internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the fees and expenses incurred
in connection with the listing, if any, of the Registerable Securities on any
securities exchange and fees and disbursements of counsel for the Company and
the Company's independent certified public accountants (including the expenses
of any special audit or "cold comfort" letters required by or incidental to such
performance), Securities Act or other liability insurance (if the Company elects
to obtain such insurance), the fees and expenses of any special experts retained
by the Company in connection with such registration and the fees and expenses of
any other person retained by the Company (but not including any underwriting
discounts or commissions attributable to the sale of Registerable Securities or
other out-of-pocket expenses of the Rightsholders, or the agents who act on
their behalf, unless reimbursement is specifically approved by the Company) will
be borne by the Company. All such expenses are herein referred to as
"Registration Expenses."
(e) Indemnification: Contribution.
(i) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, each Rightsholder,
its officers and directors and each person who controls such Rightsholder
(within the meaning of the Securities Act), if any, and any agent thereof
against all losses, claims, damages, liabilities and expenses incurred by
such party pursuant to any actual or threatened suit, action, proceeding or
investigation (including reasonable attorney's fees and expenses of
investigation) arising out of or based upon any untrue or alleged untrue
statement of a material fact contained in any registration statement,
prospectus or preliminary prospectus or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a prospectus, in the light of
the circumstances under which they were made) not misleading, except
insofar as the same arise out of or are based upon, any such untrue
statement or omission based upon information with respect to such
Rightsholder furnished in writing to the Company by such Rightsholder
expressly for use therein.
(ii) Indemnification by Rightsholder. In connection with any
registration statement in which a Rightsholder is participating, each such
Rightsholder will be required to furnish to the Company in writing such
information with respect to such Rightsholder as the Company reasonably
requests for use in connection with any such registration statement or
prospectus, and each Rightsholder agrees to the extent it is such a holder
of Registerable Securities included in such registration statement, and
each other such holder of Registerable Securities included in such
Registration Statement will be required to agree, to indemnify, to the full
extent permitted by law, the Company, the directors and officers of the
Company and each person who controls the Company (within the meaning of the
Securities Act) and any agent thereof, against any losses, claims, damages,
liabilities and expenses (including reasonable attorney's fees and expenses
of investigation incurred by such party pursuant to
A - 15
any actual or threatened suit, action, proceeding or investigation arising
out of or based upon any untrue or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact necessary, to
make the statements therein (in the case of a prospectus, in the light of
the circumstances under which they are made) not misleading, to the extent,
but only to the extent, that such untrue statement or omission is based
upon information relating to such Rightsholder or other holder furnished in
writing to the Company expressly for use therein.
(iii) Conduct of Indemnification Proceedings. Promptly after receipt
by an indemnified party under this Paragraph 10(e) of written notice of the
commencement of any action, proceeding, suit or investigation or threat
thereof made in writing for which such indemnified party may claim
indemnification or contribution pursuant to this Agreement, such
indemnified party shall notify in writing the indemnifying party of such
commencement or threat; but the omission so to notify the indemnifying
party shall not relieve the indemnifying party from any liability which the
indemnifying party may have to any indemnified party (A) hereunder, unless
the indemnifying party is actually prejudiced thereby, or (B) otherwise
than under this Paragraph 10(e). In case any such action, suit or
proceeding shall be brought against any indemnified party, and the
indemnified party shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein
and the indemnifying party shall assume the defense thereof, with counsel
reasonably satisfactory to the indemnified party, and the obligation to pay
all expenses relating thereto. The indemnified party shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (A) the
indemnifying party has agreed to pay such fees and expenses, (B) the
indemnifying party shall have failed to assume the defense of such action,
suit or proceeding or to employ counsel reasonably satisfactory to the
indemnified party therein or to pay all expenses relating thereto or (C)
the named parties to any such action or proceeding (including any impleaded
parties) include both the indemnified party and the indemnifying party and
the indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to the indemnified party which are
different from or additional to those available to the indemnifying party
and which may result in a conflict between the indemnifying party and such
indemnified party (in which case, if the indemnified party notifies the
indemnifying party in writing that the indemnified party elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action or
proceeding on behalf of the indemnified party; it being understood,
however, that the indemnifying party shall not, in connection with any one
such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys at any time for
the indemnified party, which firm shall be designated in writing by the
indemnified party).
(iv) Contribution. If the indemnification provided for in this
Paragraph 10(e) from the indemnifying party is unavailable to an
indemnified party hereunder in respect
A - 16
of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities
or expenses (A) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and
the indemnified party on the other or (B) if the allocation provided by
clause (A) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other
but also the relative fault of the indemnifying party and indemnified
party, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and the indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages.
liabilities and expenses referred to above shall be deemed to include,
subject to the limitation set forth in Subparagraph 10(e)(v), any legal or
other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Subparagraph 10(e)(iv) were determined by pro
rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in clauses (A) and
(B) of the immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(v) Limitation. Anything to the contrary contained in this Paragraph
10(e) or in Paragraph 10(f) notwithstanding, no holder of Registerable
Securities shall be liable for indemnification and contribution payments
aggregating an amount in excess of the maximum amount received by such
holder in connection with any sale of Registerable Securities as
contemplated herein.
(f) Participation in Underwritten Registration. No Rightsholder may
participate in any underwritten registration hereunder unless such Rightsholder
(i) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and to comply with Regulation M under the Exchange Act and
(ii) completes and executes all questionnaires, appropriate and limited powers
of attorney, escrow agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangement;
provided, that all such documents shall be consistent with the provisions of
Paragraph 10(d).
A - 17
11. Redemption. The Warrants are redeemable by the Company, in whole but not in
part, on not less than 30 days' prior written notice (the "Redemption Notice"),
at a redemption price (the "Redemption Price") of $.001 per Warrant, at any time
on or after the Warrant Commencement Date. The Warrantholders will have full
rights to exercise all Warrants subject to the Redemption Notice until 5:00
p.m., Henderson, Nevada time (the "Accelerated Expiration Time"), on the
business day immediately preceding the date (the "Redemption Date") fixed for
redemption in the Redemption Notice. Notwithstanding anything to the contrary
contained in this Agreement, (a) the Company shall have the option, without
further compensation to the Warrantholder other than the payment of the
Redemption Price per Warrant, to cause any or all of those Warrants (each, a
"Non-Exercised Warrant") which were not properly exercised on or before the
Accelerated Expiration Time to be assigned to one or more third parties (each, a
"Standby Purchaser"), effective immediately following the Accelerated Expiration
Time, for the consideration equal to $.001 per Non-Exercised Warrant payable to
the Company, and (b) each Standby Purchaser shall have the right to exercise the
Non- Exercised Warrants so assigned to such Standby Purchaser through the
fourteenth day following the Redemption Date.
12. Automatic Modification of the Terms and Provisions of the Warrants in the
Event of a Registered Offering of Securities of the Company. Notwithstanding
anything contained in this Warrant Certificate to the contrary, in the event (a
"Public Offering") that, at any time on or prior to the Expiration Date, the
Company shall sell and issue warrants (each, a "Public Warrant") pursuant to an
effective registration statement under the Securities Act, whether such Public
Warrants are sold separately, as a unit with other securities of the Company,
together with other securities of the Company or otherwise, then and immediately
upon such sale and issuance, each Warrant evidenced by this Warrant Certificate
shall automatically be converted into a Public Warrant, on an one-for-one (1:1)
basis, with the terms and provisions of this Warrant Certificate automatically
being amended and modified in their entirety to the terms and conditions
governing the Public Warrants. In the event of a Public Offering, this Warrant
Certificate shall be surrendered to the Company or such agent(s) as may be
appointed by the Company and whose identity is given by notice to Warrantholder.
Upon surrender of this Warrant Certificate to the Company or to such agent(s) as
may be appointed by the Company, the Warrantholder shall be entitled to a new
warrant certificate evidencing the Public Warrants as so converted, amended and
modified and this Warrant Certificate as so surrendered shall be canceled. Until
so surrendered, this Warrant Certificate will be deemed from and after the
Public Offering, for all corporate purposes, to represent solely the right to
receive Public Warrants equal to the number of Warrants evidenced by this
Warrant Certificate upon surrender of this Warrant Certificate. Notwithstanding
anything to the contrary in this Section 12, neither the Company nor any other
party shall be liable to Warrantholder or any other party for any amount
properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
13. Miscellaneous. This Warrant Certificate and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This certificate is deemed to have been delivered in the State of
Nevada York and shall be construed and enforced in accordance with and governed
by the laws of such State. The headings in this Warrant Certificate are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof.
A - 18
14. Expiration. Unless as hereinafter provided, the right to exercise the
Warrants shall expire at the Expiration Time.
Dated: As of ___________, 200_
Crest View Inc.
By:
-------------------------------------
Johnny R. Thomas, President
ATTEST:
- -------------------------------------------
Elliot Lutzker, Secretary
A - 19
EXERCISE FORM
Dated:_______________, ____
TO: Crest View Inc.
The undersigned hereby irrevocably elects to exercise the within Warrant,
to the extent of purchasing _________________ shares of Common Stock, and hereby
makes payment of _____________ in payment of the actual Purchase Price thereof.
--------------------------------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
_____________________________________________________
(Please type or print in block letters)
Taxpayer
Identification
Number:
_____________________________________________________
Address:
_____________________________________________________
_____________________________________________________
--------------------------------------------
Signature:
_____________________________________________________
(Signature must conform in all respects to the name
of the Warrantholder as set forth on the face of this
Warrant Certificate.)
A-EF - 1
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________
(Please type or print in block letters)
hereby sells, assigns and transfers unto:
Name:
_____________________________________________________
(Please type or print in block letters)
Taxpayer
Identification
Number:
_____________________________________________________
Address:
_____________________________________________________
_____________________________________________________
this Warrant Certificate and the Warrants represented by this Warrant
Certificate to the extent of ________________ Warrants and does hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Dated:
____________
Signature:
_____________________________________________________
(Signature must conform in all respects to the name
of the Warrantholder as set forth on the face of this
Warrant Certificate.)
A-AF - 1
EXERCISE FORM
Dated:_______________, ____
TO: Crest View Inc.
The undersigned hereby irrevocably elects to exercise the within Warrant,
to the extent of purchasing _________________ shares of Common Stock and _______
Underlying Warrants, and hereby makes payment of _____________ in payment of the
actual Purchase Price thereof.
--------------------------------------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
_____________________________________________________
(Please type or print in block letters)
Taxpayer
Identification
Number:
_____________________________________________________
Address:
_____________________________________________________
_____________________________________________________
--------------------------------------------
Signature:
_____________________________________________________
(Signature must conform in all respects to the name
of the Warrantholder as set forth on the face of this
Warrant Certificate.)
EF - 1
ASSIGNMENT FORM
FOR VALUE RECEIVED, _______________________________________
(Please type or print in block letters)
hereby sells, assigns and transfers unto:
Name:
_____________________________________________________
(Please type or print in block letters)
Taxpayer
Identification
Number:
_____________________________________________________
Address:
_____________________________________________________
_____________________________________________________
this Warrant Certificate and the Warrants represented by this Warrant
Certificate to the extent of ________________ Warrants and does hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.
Dated:
____________
Signature:
_____________________________________________________
(Signature must conform in all respects to the name
of the Warrantholder as set forth on the face of this
Warrant Certificate.)
AF - 1