THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW. THIS WARRANT OR SUCH SHARES MAY
NOT BE SOLD, DISTRIBUTED, PLEDGED, OFFERED FOR SALE,
ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS:
(A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAW COVERING
ANY SUCH TRANSACTION INVOLVING SAID SECURITIES; (B) THE
COMPANY (DEFINED BELOW) RECEIVES AN OPINION OF LEGAL
COUNSEL FOR THE HOLDER OF THIS WARRANT STATING THAT
SUCH TRANSACTION IS EXEMPT FROM REGISTRATION AND SUCH
OPINION IS IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY AND FROM COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY; OR (C) PURSUANT TO RULE
144 UNDER SUCH ACT.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
CASINOVATIONS INCORPORATED
This is to certify that, for value received,
____________________________ (the "Holder") is entitled, during a
specified period of time as set forth in Section 3 herein (the
"Exercise Period"), to purchase from Casinovations Incorporated,
a Washington corporation (the "Company"), ________ fully paid and
nonassessable shares of the Company's common stock, par value
$0.001 per share (the "Common Stock"), at an exercise price per
share as set forth in Section 1 herein (the "Exercise Price")
(such number of shares and the Exercise Price being subject to
adjustment as provided herein). The term "Warrant," as used
herein, refers to this Warrant to Purchase Shares of Common
Stock, the term "Warrant Shares," as used herein, refers to the
shares of Common Stock purchasable hereunder, and the term
"Parties," as used herein, refers collectively to the Holder and
the Company. This Warrant is issuable only as part of a Unit or
Units consisting of that certain $______,000 principal amount
9.5% Convertible Note Due 2004 dated as of the same date hereof
to Holder (as "Purchaser") and the Company (as "Obligor")
(collectively hereinafter the "Convertible Note"). Each Unit
shall consist of a This Warrant is only exercisable after
conversion of the Convertible Note.
TERMS AND CONDITIONS
This Warrant is subject to the following terms, provisions,
and conditions:
1. EXERCISE PRICE. The Exercise Price shall be $3.00 per
share.
2. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT
FOR SHARES. Subject to the provisions hereof, this Warrant may
be exercised by the Holder, in whole or in part (but not less
than 1,000 share increments), by the surrender of this Warrant,
together with an exercise agreement in the form attached hereto
(the "Exercise Agreement"), duly completed and executed by the
Holder, to the Company during normal business hours on any
business day at the Company's principal executive offices (or
such
other location as the Company may designate by notice to the
Holder); and upon (a) the payment to the Company in cash, by
certified or official bank check or by wire transfer for the
account of the Company in the amount of the Exercise Price
multiplied by the number of Warrant Shares for which the Warrant
is being exercised.
The Warrant Shares so purchased shall be deemed to be
issued to the Holder as the record owner of such Warrant Shares,
as of the close of business on the date on which this Warrant
shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for
such Warrant Shares as set forth above. Certificates for the
Warrant Shares so purchased, representing the aggregate number of
shares specified in the Exercise Agreement, shall be delivered to
the Holder within a reasonable time, not exceeding ten (10)
business days, after this Warrant shall have been so exercised.
The certificates so delivered shall be in such denominations as
may be reasonably requested by the Holder and shall be registered
in the name of the Holder or such other name as shall be
designated by the Holder. If this Warrant shall have been
exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of
such certificates, deliver to the Holder a new warrant
representing the number of Warrant Shares with respect to which
this Warrant shall not then have been exercised.
3. EXERCISE PERIOD. This Warrant may be exercised any
time after August 1, 1999, and before 2:00 p.m., Las Vegas,
Nevada time, on February 1, 2001 (the "Exercise Period").
4. CONDITIONS PRECEDENT, CALL AND REDEMPTION.
Notwithstanding anything else herein to the contrary,
(a) The Warrant is not exercisable unless Holder has
exercised fully the conversion option under the Convertible
Note.
(b) This Warrant may be called and redeemed, if not
previously exercised, after the Company gives written notice
to Holder of the Company's election to call and redeem (the
"Redemption Notice") the Warrant and if, within thirty (30)
days of such Redemption Notice, Holder has not exercised the
Warrant pursuant to the terms hereof. In no event may the
Company elect to redeem the Warrant prior to February 1,
2000. In the event of such redemption, the Company must pay
to Holder consideration equal to the par value of the shares
issuable pursuant to the Warrant.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby
covenants and agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares
shall, upon issuance in accordance with the terms of this
Warrant, be validly issued, fully paid, and non-assessable.
(b) RESERVATION OF SHARES. During the Exercise
Period, the Company shall at all times have authorized, and
reserved for the purpose of issuance upon exercise of this
Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
(c) SUCCESSORS AND ASSIGNS. This Warrant shall be
binding upon any entity succeeding to the Company by merger,
consolidation, or acquisition of all or substantially all
the Company's assets.
6. ADJUSTMENT PROVISIONS. During the Exercise Period, the
Exercise Price and the number of Warrant Shares shall be subject
to adjustment from time to time as provided in this Section 6.
If the Company shall, prior to the conversion or payment of the
Note in full, (a) declare a dividend or make a
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distribution on its Common Stock payable in shares of its Common
Stock, (b) subdivide its outstanding shares of Common Stock into
a greater number of shares of Common Stock, or (c) combine its
outstanding shares of Common Stock into a smaller number of
shares of Common Stock, or (d) issue any shares of capital stock
of the Company by reclassification or capital reorganization of
its shares of Common Stock, then the conversion privilege and
Exercise Price in effect immediately prior to such action shall
be adjusted so that the Holder shall be entitled to receive the
number and kind of shares of Common Stock or other Capital Stock
which the Holder would have owned or have been entitled to
receive immediately after such action had the Holder exercised
the Warrant immediately prior to the record date in the case of
(a), or the effective date in the case of (b), (c) or (d). In
the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall
be rounded up to the nearest cent.
7. PAYMENT OF EXPENSES. The Company and the Holder shall
each be responsible for their own costs and expenses payable in
connection with (a) the negotiation, preparation, execution and
delivery of this Agreement and the other agreements to be
executed in connection herewith; and (b) the issuance of
certificates for Warrant Shares upon the exercise of this
Warrant. The Company shall pay any issuance tax in connection
with the issuance of certificates for Warrant Shares; provided,
however, that the Holder shall be responsible for any income or
other taxes in connection with such issuance.
8. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This
Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company. No provision of
this Warrant, in the absence of affirmative action by the Holder
to purchase Warrant Shares, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any
liability of such Holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
9. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT. This
Warrant, nor any interest in this Warrant, may be sold,
distributed, assigned, offered, pledged or otherwise transferred
without the express written consent of the Company.
(a) EXCHANGE OF WARRANTS; REPLACEMENT OF WARRANTS.
This Warrant is exchangeable upon the surrender hereof by
the Holder to the Company at its office for new warrants of
like tenor and date representing in the aggregate the right
to purchase the number of shares of Common Stock purchasable
hereunder, each of such new Warrants to represent the right
to purchase such number of shares of Common Stock (not to
exceed the aggregate total number purchasable hereunder) as
shall be reasonably designated by the Holder at the time of
such surrender. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and, in case of
loss, theft or destruction, of indemnity, or security
reasonably satisfactory to it, and upon, surrender and
cancellation of this Warrant, if mutilated, the Company will
make and deliver a new warrant of like tenor, in lieu of
this Warrant.
(b) CANCELLATION; PAYMENT OF EXPENSES. Upon the
surrender of this Warrant in connection with any transfer,
exchange, or replacement as provided in this Section 9, this
Warrant shall be promptly canceled by the Company. The
Company and the Holder shall each be responsible for their
own costs and expenses payable in connection with the
preparation, execution, and delivery of new warrants
pursuant to this Section 9. The Holder shall be responsible
for any tax which may be payable in connection with any
transfer of a certificate for Warrant Shares.
(c) REGISTRAR. The Company shall maintain, at its
principal executive offices (or such other location as the
Company may designate by notice to the Holder), a registrar
for this
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Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been
issued, as well as the name and address of each transferee
and each prior owner of this Warrant.
10. AMENDMENTS. No amendment or modification of this
Warrant shall be deemed effective unless and until such amendment
or modification is an express writing executed by both of the
Parties.
11. GOVERNING LAW. This Warrant shall be governed by and
construed and enforced in accordance with the internal laws of
the State of Nevada without regard to the body of law controlling
conflicts of law. The parties hereto hereby submit to the
exclusive jurisdiction of the courts located in Las Vegas,
Nevada, with respect to any dispute arising under this Warrant
and the transactions contemplated hereby.
12. REGISTRATION RIGHTS.
(a) MANDATORY REGISTRATION. The Company shall prepare
and, no sooner than nine months and no later than twelve
months after the Issuance Date, file with United States
Securities and Exchange Commission (the "SEC"), an
appropriate registration statement to effect a registration
of the Registrable Securities (as defined below) covering
the resale of the Registrable Securities underlying this
Warrant, which registration statement, to the extent
allowable under the Securities Act of 1933, as amended, and
the rules promulgated thereunder (including Rule 416), shall
state that such registration statement also covers such
indeterminate numbers of additional shares of Common Stock
as may become issuable upon conversion of the Warrants (i)
to prevent dilution resulting from stock splits, stock
dividends or similar transactions or (ii) by reason of
changes in the Exercise Price in accordance with the terms
of this Warrant. The Company shall use its best efforts to
obtain effectiveness of the registration statement as soon
as practicable. For purposes of this Agreement, the term
"Registrable Securities" means the Warrant Shares issued or
issuable and any shares of capital stock issued or issuable
as a dividend on or in exchange for or otherwise with
respect to any of the foregoing.
(b) OBLIGATIONS OF THE HOLDER. It shall be a
condition precedent to the obligations of the Company to
complete the registration pursuant to this Warrant with
respect to the Registrable Securities of the Holder that
such Holder shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and
the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to
effect the registration of such Registrable Securities and
shall execute such documents and otherwise cooperate with
the Company as reasonably requested by the Company in
connection with the preparation and filing of the
registration statement. At least three (3) business days
prior to the first anticipated filing date of the
Registration Statement, the Company shall notify the Holder
of the information the Company requires from each such
Holder.
(c) EXPENSE OF THE REGISTRATION. All reasonable
expenses, other than underwriting discounts and commissions,
incurred by the Company in connection with registrations,
filings or qualifications pursuant to this Section 12,
including without limitation, all registration, listing and
qualification fees, printers and accounting fees, and the
fees and disbursements of counsel for the Company, shall be
borne by the Company.
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13. EXPIRATION DATE. This Warrant shall expire and become
null and void and of no further force or effect at 5:00 p.m. Las
Vegas, Nevada time on February 1, 2001.
In Witness Whereof, the Company has caused this Warrant to
be signed by its duly authorized officer.
Casinovations Incorporated,
a Washington corporation
By:_______________________________
Name:________________________
Title:_______________________
Date:_____________________________
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