CTS - W-1~
WARRANT TO PURCHASE
COMMON STOCK
OF
GEOGRAPHICS, INC.
This is to certify that 2~ (the "Holder") is entitled, subject to the
terms and conditions hereinafter set forth, to purchase 3~ shares of Common
Stock, no par value per share (the "Common Shares"), of GEOGRAPHICS, INC., a
Wyoming corporation (the "Company"), from the Company at the price per share and
on the terms set forth herein and to receive a certificate for the Common Shares
so purchased on presentation and surrender to the Company with the subscription
form attached, duly executed and accompanied by payment of the purchase price of
each share purchased either in cash or by certified or bank cashier's check or
other check payable to the order of the Company.
Exercise
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The purchase rights represented by this Warrant are exercisable at a price
per Common Share of $6.50 at any time on or prior to June 1, 1999 subject to
adjustment as hereinafter provided.
The purchase rights represented by this Warrant are exercisable at the
option of the registered owner hereof in whole or in part, from time to time,
within the period specified; provided, however, that such purchase rights shall
not be exercisable with respect to a fraction of a Common Share. In case of the
purchase of less than all the Common Shares purchasable under this Warrant, the
Company shall cancel this Warrant on surrender hereof and shall execute and
deliver a new Warrant of like tenor and date for the balance of the shares
purchasable hereunder.
The Company agrees at all times to take appropriate action to reserve or
hold available a sufficient number of Common Shares to cover the number of
shares issuable on exercise of this and all other Warrants of like tenor then
outstanding. The Company agrees to obtain any authorization required from its
shareholders in order to amend its Articles of Incorporation to increase the
authorized capitalization to permit the exercise of this Warrant and other
Warrants of like tenor.
Redemption of Warrant
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Commencing December 1, 1996, the Company shall have the right on 20 days'
prior written notice to redeem, at a price of $0.05 per underlying Common Share,
all of the Warrants included in the Company's private offering of Units of its
securities of which this Warrant is a part, provided the closing price of the
Company's Common Stock has exceeded $12.00 per share for 10 consecutive trading
days concluding within any 20 consecutive trading day period immediately prior
to date the Company has provided notice of such redemption, and provided further
that the Company has in effect a current registration statement covering the
resale of the Common Shares and this Warrant under the Securities Act of 1933 in
order to permit the sale of the Common Shares and this Warrant.
No Voting Rights
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This Warrant shall not entitle the holder hereof to any voting rights or
other rights as a shareholder of the Company, or to any other rights whatever
except the rights herein expressed, and no dividends shall be payable or accrue
in respect of this Warrant or the interest represented hereby or the Common
Shares purchasable hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
Adjustments
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The number of shares of Common Stock purchasable upon exercise of this
Warrant and the Purchase Price shall be subject to adjustments from time to time
as follows:
If the Company shall at any time prior to the expiration of this Warrant
subdivide its Common Stock, by forward or reverse stock split or otherwise,
combine its Common Stock or issue additional shares of its Common Stock as a
dividend with respect to any shares of its Common Stock, the number of Common
Shares issuable upon exercise of this Warrant shall forthwith be proportionately
increased or decreased. Appropriate adjustments shall also be made to the
purchase price, but the aggregate purchase price payable for the total number of
Common Shares purchasable under this Warrant (as adjusted) shall remain the
same. Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.
In the event of any reclassification, capital reorganization or other
change in the Common Stock of the Company or in the event of any sale of all or
substantially all of the Company's assets or any merger, consolidation or
restructuring to which the Company is a party in which the Company's
stockholders before the transaction or series of transactions hold less than 50%
of the voting power of the surviving entity immediately after the transaction or
series of transactions (other than as a result of a subdivision, combination or
stock dividend provided for above or any transaction described in the Company's
Confidential Private Term Sheet relating to the private offering of Units of its
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securities of which this Warrant is a part), lawful provision shall be made, and
duly executed documents evidencing the same shall be made and shall be delivered
to the Holder in substitution for the Holder's rights under this Warrant, so
that the Holder shall have the right at any time and from time to time prior to
the expiration of this Warrant to purchase at a total price equal to that
payable upon exercise of this Warrant immediately prior to such event, the kind
and amount of shares of stock or other securities or property receivable in
connection with such reclassification, reorganization or change by a Holder of
same number of shares of Common Stock as were purchasable by the Holder
immediately prior to such reclassification, reorganization or change. In any
such case, appropriate provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall hereafter be
applicable with respect to any shares of stock or other securities or property
deliverable upon exercise hereof, and appropriate adjustment shall be made to
the purchase price per Common Share payable hereunder, provided the aggregate
purchase price shall remain the same.
Upon any adjustments of the number of Common Shares issuable upon exercise
of this Warrant or the purchase price pursuant to this paragraph, the Company
within thirty (30) days thereafter shall cause to be prepared a certificate of
the Chief Financial or Accounting Officer of the Company setting forth the
number of Common Shares issuable upon exercise of this Warrant and the purchase
price after such adjustments, and setting forth in reasonable detail the method
of calculation used and cause a copy of such certificate to be mailed to the
Holder of the Warrant.
In the event of dissolution or liquidation of the Company in which the
Company is not a surviving corporation, this Warrant shall terminate, but the
registered owner of this Warrant shall have the right, immediately prior to such
dissolution, liquidation, merger or combination, to exercise this Warrant in
whole or in part to the extent that it shall not have been exercised.
The foregoing adjustments and the manner of application of the foregoing
provisions may provide for the elimination of fractional share interests.
Registration Rights
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The Company has previously advised the Holder in the aforementioned
Confidential Private Term Sheet that it intends to prepare and file under the
Securities Act of 1933 (the "Act") a Registration Statement not later than sixty
(60) days following completion of the offering of the Units of which this
Warrant is part and has agreed to register the resale of the Common Shares
underlying the Holder's Warrants (the "Covered Shares") and this Warrant in such
Registration Statement. The Company shall bear all of the costs of such
registration that are normally borne by issuers.
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In connection with such Registration Statement filed pursuant to the
preceding paragraph, the Company shall prepare and promptly file with the
Securities and Exchange Commission (the "Commission") all amendments,
post-effective amendments and supplements to any such Registration Statement as
may be necessary under the Act and the regulations of the Commission to permit
the sale of the Covered Shares and the Warrant to the public, except that the
Company shall not be required to maintain a current Registration for any period
in excess of the term of this Warrant. The registration rights provided to the
Holder shall be limited to the filing of one Registration Statement only and
upon fulfillment of the terms hereof, the Company shall have no obligation to
register for resale under the Act the Holder's Common Shares or this Warrant in
any subsequent Registration Statements prepared by the Company.
The rights and obligations of the Holder pursuant to this paragraph may be
exercised only by the Holder, transferees and assigns thereof.
Indemnification
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When pursuant hereto a Registration Statement registering the resale of
the Common Shares or this Warrant is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
Common Shares and the Warrant covered by such Registration Statement, amendment
or supplement and each person, if any, who controls (within the meaning of the
Act) the Holder, and each underwriter (within the meaning of the Act) of such
securities and each person, if any, who controls )within the meaning of the Act)
any such underwriter, against any losses, claims, damages or liabilities, joint
or several, to which the Holder, any such controlling person or any such
underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities, or actions in respect thereof, arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any such Registration Statement or any preliminary
prospectus or final prospectus constituting a part thereof or any amendment or
supplement thereto, or arising out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Holder or such controlling person or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in said Registration Statement, said preliminary prospectus, said
final prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished by such Holder or any other Holder
for use in the preparation thereof.
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The Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed said registration statement and
such amendments and supplements thereto, and each person, if any, who controls
the Company (within the meaning of the Act) against any losses, claims, damages
or liabilities, joint or several, to which the Company or any such director,
officer or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities, or actions in respect
thereof, arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained in said Registration Statement, said preliminary
prospectus, said final prospectus, or said amendment or supplement, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
said Registration Statement, said preliminary prospectus, said final prospectus
or said amendment or supplement in reliance upon and in conformity with written
information furnished by such Holder for use in the preparation thereof; and
will reimburse the Company or any such director, officer or controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
Promptly after receipt by an indemnified party under this paragraph of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof, but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party otherwise than under this paragraph.
In case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(however, in the event of disagreement as to the selection of counsel, the
indemnified party shall have the right to select such counsel), and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this paragraph for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Any settlement of such
action shall require the indemnifying party's consent, which shall not be
unreasonably withheld.
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Miscellaneous
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The Company shall not be required to issue or deliver any certificate for
Common Shares purchased on exercise of this Warrant or any portion thereof prior
to fulfillment of all the following conditions:
(a) The completion of any registration or other qualification of
such shares under any federal or state law or under the rulings or regulations
of the Securities and Exchange Commission or any other government regulatory
body which is necessary;
(b) The obtaining of any approval or other clearance from any
federal or state government agency which is necessary;
(c) The obtaining from the registered owner of the Warrant a
representation in writing that the owner is acquiring such Common Shares for the
owner's own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, if the Warrants and the
related shares have not been registered under the Act; and
(d) The placing on the certificate of an appropriate legend and the
issuance of stop transfer instructions in connection therewith if this Warrant
and the related, Common Shares have not been registered under the Act to the
following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS
OF ANY STATE AND HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION PERTAINING TO SUCH SECURITIES AND PURSUANT TO A
REPRESENTATION BY THE SECURITY HOLDER NAMED HEREON THAT SAID
SECURITIES HAVE BEEN ACQUIRED FOR PURPOSES OF INVESTMENT AND MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF REGISTRATION. FURTHERMORE, NO OFFER, SALE,
TRANSFER, PLEDGE OR HYPOTHECATION IS TO TAKE PLACE WITHOUT THE
PRIOR WRITTEN APPROVAL OF COUNSEL OR THE ISSUER BEING AFFIXED TO
THIS CERTIFICATE. THE TRANSFER AGENT HAS BEEN ORDERED TO EXECUTE
TRANSFERS OF THIS CERTIFICATE ONLY IN ACCORDANCE WITH THE ABOVE
INSTRUCTIONS."
The Company may make any changes or corrections in this Warrant (i) that
it shall deem appropriate to cure any ambiguity or to correct any defective or
inconsistent provision or manifest mistake or error herein contained; or (ii)
that it may deem necessary or desirable and which shall not adversely affect the
interests of the Holder; provided, however, that this Warrant shall not
otherwise be modified, supplemented or altered in any respect except with the
consent in writing of the Holders representing not less than 50% of the Warrants
then outstanding; and provided, further, that no change in the number or nature
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of the securities purchasable upon the exercise of any Warrant, or any increase
in the purchase price therefor, or any shortening of the Warrant exercise period
shall be made without the consent in writing of the Holders representing such
Warrant, other than such changes as are specifically prescribed by this Warrant
as originally executed.
The terms and provisions of this Warrant shall inure to the benefit of,
and be binding upon, the Company and its successors and assigns.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
the signature of its duly authorized officer.
GEOGRAPHICS, INC.
By:______________________________
President
Dated: ______________________
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SUBSCRIPTION FORM
(To be executed by the registered holder to exercise
the rights to purchase Common Shares evidenced by the
within Warrant.)
Geographics, Inc.
1555 Odell Road
Blaine, WA 98230
The undersigned hereby irrevocably subscribes for __________ Common Shares
pursuant to and in accordance with the terms and conditions of this Warrant, and
herewith makes payment of $__________ therefor, and requests that a certificate
for such Common Shares be issued in the name of the undersigned and be delivered
to the undersigned at the address stated below, and if such number of shares
shall not be all of the shares purchasable hereunder, that a new Warrant of like
tenor for the balance of the remaining Common Shares purchasable hereunder shall
be delivered to the undersigned at the address stated below.
Dated: Signed:_________________________
Address:________________________
________________________________
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