THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, (ii) THE SALE IS MADE IN ACCORDANCE WITH RULE 144
UNDER THE ACT, OR (iii) THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
_______________, 1998
ANTIGUA ENTERPRISES, INC.
COMMON SHARES PURCHASE WARRANT
300,000 Shares
Void after ____________, 2003
1. NUMBER AND PRICE OF SHARES SUBJECT TO WARRANT. In connection with the
of public offering of Common Shares (the "Offering") of Antigua Enterprises,
Inc. (the "Company") and subject to the terms and conditions of this Warrant,
Cruttenden Roth Incorporated, or its permitted transferees (each a "Holder") is
entitled to purchase from the Company, at any time after ____________, 1999, and
on or before ____________, 2004, up to 300,000 shares (which number of shares is
subject to adjustment as described below) of fully paid and non-assessable
Common Shares of the Company (the "Shares"). Subject to adjustments for any
stock splits, reverse stock splits, stock dividends, recapitalization or
reclassification, the purchase price of one share of Common Shares shall be
equal to [$_____] per share. The purchase price of one share of Common Shares
payable from time to time upon the exercise of this Warrant (whether such price
be the price specified above or an adjusted price determined as hereinafter
provided) is referred to herein as the "Warrant Price."
2. ADJUSTMENTS. The number of Shares issuable upon the exercise of this
Warrant and the exercise price thereof shall be subject to adjustment from time
to time, and the Company agrees to provide notice upon the happening of certain
events, as follows:
a) Merger, Sale of Assets, etc. If any capital reorganization of the
share capital of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Shares shall
be entitled to receive stock, securities or assets with respect to or in
exchange for Shares, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the Holder hereof shall thereafter have the right to
purchase and receive (in lieu of the Shares immediately theretofore purchasable
and receivable upon the exercise of the rights represented hereby) such shares
of stock, securities or assets as may be issued or payable with respect to or in
exchange for a number of outstanding Shares equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby. In any such case, appropriate provision shall
be made with respect to the rights and interests of Holder to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Warrant Price and of the number of Shares purchasable and receivable upon
the exercise of this Warrant) shall thereafter be applicable, as nearly as may
be possible, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation (if other that the Company) resulting from such
consolidation or the corporation purchasing such assets shall assume by written
instrument, the obligation to deliver to such Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase.
b) Reclassification, etc. If the Company at any time shall, by
subdivision, combination or reclassification of securities or otherwise, change
any of the securities to which purchase rights under this Warrant exist into the
same or a different number of securities of any class or classes, this Warrant
shall thereafter be deemed to give the Holder the right to acquire such number
and kind of securities as would have been issuable as the result of such change
with respect to the securities which were subject to the purchase rights under
this Warrant immediately prior to such subdivision, combination,
reclassification or other change. If shares of the class of the Company's share
capital for which this Warrant is being exercised are subdivided or combined
into a greater or smaller number of shares of share capital, the Warrant Price
shall be proportionately reduced in the case of subdivision of shares or
proportionately increased in the case of combination of shares, in both cases by
the ratio which the total number of shares of such class of share capital to be
outstanding immediately after such event bears to the total number of shares of
such class of share capital outstanding immediately prior to such event.
c) Adjustment for Dividends in Stock. In case at any time or from time
to time on or after the date hereof the holders of the shares of the Company's
Common Shares (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible shareholders, shall have
become entitled to receive, without payment therefor, other or additional share
capital or securities (or any rights or options to subscribe for or purchase any
of the foregoing) of the Company by way of dividend, then and in each case, the
holder of this Warrant shall, upon the exercise hereof, be entitled to receive,
in addition to the number of Shares receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
share capital of the Company which such holder would hold on the date of such
exercise had it been the holder of record of such Shares on the date hereof and
had thereafter, during the period from the date hereof to and including the date
of such exercise, retained such shares and/or all other additional stock
receivable by it as aforesaid during such
period, giving effect to all adjustments called for during such period by
paragraph (c) of this Section 2.
3. NO SHAREHOLDER RIGHTS. This Warrant shall not entitle Holder to any of
the rights of a shareholder of the Company, except that Holder shall be entitled
to receive copies of such annual and periodic reports and other communications
as the Company sends to all of its shareholders.
4. RESERVATION OF STOCK. The Company covenants that during the period this
Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Shares a sufficient number of shares to provide for the issuance
of the Shares upon the exercise of this Warrant. The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for Shares upon the exercise of this Warrant.
5. EXERCISE AND CONVERSION OF WARRANT.
a) This Warrant may be exercised by Holder or its permitted assigns, in
whole or in part, by delivery of the Notice of Exercise in the form attached
hereto as ATTACHMENT 1 and surrender of this Warrant at the principal office of
the Company, accompanied by payment in full of the Warrant Price as described
above. Notwithstanding any provision of this Warrant, this Warrant may not be
exercised prior to one (1) year following ____________, 1998. Upon partial
exercise hereof, a new warrant or warrants containing the same date and
provisions as this Warrant shall be issued by the Company to the registered
holder for the number of shares of Common Stock with respect to which this
Warrant shall not have been exercised.
b) Notwithstanding anything to the contrary contained in this Section
5, Holder may elect to receive Shares on a "net exercise" basis in an amount
equal to the value of this Warrant by delivery of the Notice of Conversion in
the form attached hereto as ATTACHMENT 2 and surrender of this Warrant at the
principal office of the Company, in which event the Company shall issue to
Holder a number of Shares computed using the following formula:
(P)(Y)(A-B)
-----------
X = A
Where: X = the number of Shares to be issued to Holder.
P = the portion of the Warrant being exercised.
Y = the number of Shares issuable upon exercise of this Warrant.
A = the Fair Market Value of one Share.
B = Warrant Price.
c) As used herein, the Fair Market Value of the Shares shall mean with
respect to each Share the closing price or last sale price of the Company's
Common Shares sold on any securities exchange or quoted on the Nasdaq National
Market on which the Common Shares may at the time be listed or quoted, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on such exchange at the end of such day or
quote on the Nasdaq National Market, or, if on any day the Common Shares are not
so listed or quoted, the average of the representative bid and asked prices
quoted on the Nasdaq SmallCap Market as of 4:00 p.m., New York City time, or, if
on any day the Common Shares are not quoted on the Nasdaq SmallCap Market, the
average of the highest bid and lowest asked price on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of five days consisting of the day as of which the current fair
market value of the Shares is being determined and the four consecutive business
days prior to such day. If at any time the Common Shares are not listed on any
securities exchange or quoted on the Nasdaq National Market, the Nasdaq SmallCap
Market or the over-the-counter market, the current fair market value of a Share
shall be the highest price per share which the Company could obtain from a
willing buyer (other than a current employee or director) for Common Shares sold
by the Company, from authorized but unissued shares, as determined in good faith
by the Board of Directors of the Company, unless the Company shall become
subject to a merger, acquisition or other consolidation pursuant to which the
Company is not the surviving party, in which case the current Fair Market Value
of a Share shall be deemed to be the value received by the holders of the
Company's Common Shares for each share of Common Shares in such merger,
acquisition or other consolidation.
d) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the Shares issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. As promptly as practicable on
or after such date, the Company shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
full Shares issuable upon such exercise, together with cash in lieu of any
fraction of a Share.
6. TRANSFER OF WARRANT. This Warrant and all rights hereunder may be
transferred, in whole or in part, provided that any such transfer is in
compliance with the legend appearing on the first page hereof and the transferee
delivers a duly executed copy of ATTACHMENT 4; provided, however, for a period
of one year from the effective date of the Offering, the Warrant may not be
sold, transferred, assigned or hypothecated except to officers or partners of
Holder and members of the selling group of the Offering and their officers and
partners; and, provided further that any transferee other than an officer or
partner of Holder must acquire the lesser of the right to acquire (i) 30,000
Shares or (ii) all of the Shares issuable upon exercise of this Warrant.
7. COMPLIANCE WITH SECURITIES LAWS.
a) Holder represents and agrees that this Warrant is being purchased
only for investment, for Holder's own account, and without any present intention
to sell or distribute the Warrant or the Shares, other than a distribution to
certain employees of Holder who agree in writing to be bound by the terms of
this Warrant to the same extent as Holder. Holder further acknowledges that the
Shares will not be issued pursuant to the exercise of this Warrant unless the
exercise of this Warrant and the issuance and delivery of such Shares shall
comply with all relevant provisions of law, including, without limitation, the
Act and other federal and state securities laws and regulations and the
requirements of any stock exchange or other system upon which the Shares may
then be listed.
b) Holder acknowledges and agrees that this Warrant and the Shares
(collectively, the "Securities") have not been registered under the Act and
accordingly will not be transferable except as permitted under the various
exemptions contained in the Act, or upon satisfaction of the registration and
prospectus delivery requirements of the Act. Therefore, the Securities must be
held indefinitely unless they are subsequently registered under the Act, or an
exemption from such registration is available. Holder understands that unless
the Shares are registered under the Act the certificate evidencing the Shares
will be imprinted with a legend which prohibits the transfer of the Shares
unless they are registered or unless the Company receives an opinion of counsel
reasonably satisfactory to the Company that such registration is not required.
Holder is aware of the adoption of Rule 144 by the Securities and Exchange
Commission and that at the time Holder wishes to sell the Securities, the
Company may not be satisfying the current public information requirements of
Rule 144 and, in such case, Holder would be precluded from selling the
Securities under Rule 144. Holder understands that a stop transfer instruction
will be in effect with respect to transfer of Securities inconsistent with the
requirements of all applicable securities laws.
8. REGISTRATION RIGHTS. Holder shall be entitled to the registration
rights set forth on ATTACHMENT 3 to this Warrant.
9. MISCELLANEOUS. This Warrant shall be governed by the laws of the State
of California. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by the Company and
the registered Holder hereof. All notices and other communications from the
Company to Holder shall be mailed by first-class registered or certified mail,
postage prepaid, to the address furnished to the Company in writing by the last
Holder of this Warrant who shall have furnished an address to the Company in
writing.
ISSUED effective this ____ day of ____________, 1998.
ANTIGUA ENTERPRISES, INC.
a British Columbia Corporation
By:
------------------------------------
Title:
---------------------------------
ATTACHMENT 1
NOTICE OF EXERCISE
TO: ANTIGUA ENTERPRISES, INC.
1. The undersigned hereby elects to purchase _____________ Common Shares
of Antigua Enterprises, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price in full, together with all
applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing said Common
Shares in the name of the undersigned or in such other name as is specified
below:
(Name)
(Address)
(Tax I.D. Number)
Name of Warrant Holder
Date:
-------------------------
By:
------------------------------------
Title:
---------------------------------
ATTACHMENT 2
NOTICE OF CONVERSION
TO: ANTIGUA ENTERPRISES, INC.
1. The undersigned hereby elects to acquire _______________ Common Shares
of Antigua Enterprises, Inc., pursuant to the terms of the attached Warrant, by
conversion of ________ percent (___%) of the Warrant.
2. Please issue a certificate or certificates representing said Common
Shares in the name of the undersigned or in such other name as is specified
below:
(Name)
(Address)
(Tax I.D. Number)
Name of Warrant Holder
Date:
-------------------------
By:
------------------------------------
Title:
---------------------------------
ATTACHMENT 3
STATEMENT OF REGISTRATION RIGHTS
1. DEFINITIONS. For purpose of the Warrant to which this Statement of
Registration Rights is attached as ATTACHMENT 3:
a) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Act"), and the declaration or ordering of effectiveness of such registration
statement or document;
b) The term "Registrable Securities" means the Common Shares issued or
issuable upon exercise of the Warrant;
c) The term "Holder" means the original holder of the Warrant and any
permitted transferee of the Warrant to the extent such persons are the holders
of Registrable Securities;
d) The term "Form S-3" means such form under the Act as in effect on
the date hereof, or any registration form under the Act subsequently adopted by
the Securities and Exchange Commission (the "SEC") which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC; and
e) The term "Warrant" means the original Warrants issued in connection
with the Offering, as such term is defined in the Warrant, and all Warrants
issued as a result of the transfer of such original Warrants.
2. COMPANY REGISTRATION. If (but without any obligation to do so) the
Company proposes at any time after _____________, 1999 and before
______________, 2004 to register (including for this purpose a registration
effected by the Company for shareholders other than Holder) any of its share
capital or other securities under the Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give Holder written notice of such registration. Upon the written
request of Holder given within 15 days after mailing of such notice by the
Company, the Company shall, subject to the provisions of Section 8 hereof and
Section 5 of the Warrant, cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.
3. DEMAND REGISTRATION. In case the Company shall, at any time after
________________, 1999 and before _____________, 2004 receive from Holders
holding a majority of the outstanding Registrable Securities a written request
that the Company effect a
registration on Form S-3 (or any successor forms) and any related qualification
or compliance with respect to all or a part of the Registrable Securities (which
registration shall at the election of Holder either be for a registration for a
primary issuance of the Shares upon the exercise of the Warrant or the resale of
the Shares previously issued upon exercise of the Warrant at the election of
Holder) owned by such Holder, the Company will promptly notify each other Holder
(if any) of such request and will:
a) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of a Holder's
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other holder of registration
rights joining in such request as are specified in a written request given
within 15 days after receipt of such written notice from the Company; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect more than one such
registration, qualification or compliance, pursuant to this Section 3 and the
Company shall not be obligated to effect any such registration, qualification or
compliance, pursuant to this Section 3: (1) if the Company shall furnish to
Holder a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
to be effected at such time, in which event the Company shall have the right to
defer the filing of the registration statement for a period of not more than 90
days after receipt of the request of Holder under this Section 3; PROVIDED,
HOWEVER, that the Company shall not utilize this right more than once in any 12
month period; or (2) in any jurisdiction in which the Company would be required
to qualify to do business or to execute a general consent to service of process
in effecting such registration, qualification or compliance; and,
b) subject to the foregoing, file a registration statement covering the
Registrable Securities and other securities so requested to be registered
promptly after receipt of the request or requests of Holder, and in any event
within 45 days of receipt of such request.
4. OBLIGATION OF THE COMPANY. Subject to the terms of the Warrant, in the
event that the Company is to effect the registration of any Registrable
Securities pursuant to Section 2 or 3 hereof, the Company shall promptly:
a) Prepare and file with the SEC a registration statement with respect
to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the holders
of a majority of the securities registered thereunder, keep such registration
statement effective for up to 120 days, or such shorter period as is required to
dispose of all securities covered by such registration statement.
b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
2
c) Furnish to Holder such number of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Act, and such
other documents as Holder may reasonably request in order to facilitate the
disposition of Registrable Securities owned by Holder.
d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by Holder, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states or jurisdictions or to agree to any restrictions as to the
conduct of its business in the ordinary course thereof.
e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Holder shall also enter
into and perform its obligations under such underwriting agreement, including
furnishing an opinion of counsel for such Holder if requested by the managing
underwriter.
f) Notify Holder at any time when a prospectus relating to Registrable
Securities of Holder covered by such registration statement is required to be
delivered under the Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.
g) Furnish, at the request of Holder, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to the Warrant, if such securities are being sold through
underwriters, or, if such securities are not being sold through underwriters, on
the date that the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to Holder and (ii) a letter dated such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to Holder.
5. AVAILABILITY OF RULE 144. Notwithstanding anything in the Warrant or
this Statement of Registration Rights to the contrary, the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to Section 2 or 3, if application of Rule 144 would allow Holder requesting
registration under Section 2 or 3 to dispose of the Registrable Securities for
which a registration is demanded within a single 90-day period.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to the Warrant that the
selling Holder shall furnish to
3
the Company such information regarding itself, the Registrable Securities held
by Holder, and the intended method of disposition of such securities as shall be
required to effect the registration of their Registrable Securities.
7. EXPENSES. The Company shall bear and pay all expenses other than
underwriting discounts and commissions incurred in connection with any
registration, filing or qualification of Registrable Securities with respect to
the registrations pursuant to Section 2 or 3 hereof for Holder, including
(without limitation) all registration, filing, and qualification fees, printers
and accounting fees relating or apportionable thereto, and the cost of any
reasonable fees or disbursements of counsel for Holder.
8. UNDERWRITING REQUIREMENTS. In connection with any registrations in
which Registrable Securities have a right to be included pursuant to Section 2
or 3 hereof and which involves an underwriting of securities being issued by the
Company, the Company shall not be required, under Section 2 or 3 hereof, to
include any of Holder's securities in such underwriting unless Holder accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering by the
Company. If the total amount of securities, including Registrable Securities,
requested by shareholders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters reasonably
believe compatible with the success of the offering, then the Company shall be
required to include in the offering only that number of such securities,
including Registrable Securities, which the underwriters believe will not
jeopardize the success of the offering, the securities so included to be
apportioned pro rata among the selling Holder and other shareholders holding
contractual registration rights according to the total amount of securities
entitled to be included therein owned by each selling shareholder or in such
other proportions as shall mutually be agreed to by Holder and each other
selling shareholder.
9. DELAY OF REGISTRATION. Holder shall have no right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of the Warrant.
10. INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement filed by the Company:
a) To the extent permitted by law, the Company will indemnify and hold
harmless Holder, its officers and directors, any underwriter (as defined in the
Act) for Holder and each person, if any, who controls Holder or underwriter
within the meaning of the Act or the Securities Exchange Act of 1934, as amended
(the "1934 Act"), against any losses, claims, damages, or liabilities (joint or
several) asserted by a third party to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any
4
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation of the
Company of the Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the Act, the 1934 Act or any state securities law;
and the Company will reimburse Holder, any of its officers or directors,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability, or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 10(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person.
b) To the extent permitted by law, Holder will indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed the
registration statement, each person, if any, who controls the Company within the
meaning of the Act, any underwriter and any other shareholder selling securities
in such registration statement or any of its directors or officers or any person
who controls such shareholder, against any losses, claims, damages, or
liabilities (joint or several) asserted by a third party to which the Company or
any such director, officer, controlling person, or underwriter or controlling
person, or other such shareholder or director, officer or controlling person may
become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by Holder expressly for use in
connection with such registration; and Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or controlling person, other shareholder,
officer, director, or controlling person, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability, or action;
PROVIDED, HOWEVER, that the obligations of Holder hereunder shall be limited to
an amount equal to the net proceeds (equal to the offering price less the
exercise price, expenses and underwriting commissions and discounts) to such
Holder of Shares sold as contemplated herein. Notwithstanding the foregoing, the
indemnity agreement contained in this Section 10(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Holder, which consent shall not be
unreasonably withheld.
c) Promptly after receipt by an indemnified party under this Section 10 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying part under this Section 10, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
5
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; PROVIDED,
HOWEVER, that an indemnified party shall have the right to retain its own
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel representing the indemnified parties who are parties to
such action). The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 10, but the omission
so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 10.
11. REPORTS UNDER THE 1934 ACT. With a view to making available to Holder
the benefits of Rule 144 promulgated under the Act and any other rule or
regulation of the SEC that may at any time permit Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company will endeavor to:
a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
b) take such action as is necessary to enable Holder to utilize Form
S-3 for the sale of its Registrable Securities;
c) file with the SEC in a timely manner all reports and other documents
required of the Company under the Act and the 1934 Act; and
d) furnish to Holder, so long as Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Act and the
1934 Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
12. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to the Warrant may be assigned by
Holder to a permitted transferee or assignee of the Warrant or of at least
30,000 Shares, provided the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
6
ATTACHMENT 4
STATEMENT OF HOLDER
The undersigned, represents and warrants to Antigua
Enterprises, Inc., a British Columbia corporation, that the representations and
warranties contained in Section 7 of the Common Shares Purchase Warrant to which
this Statement is attached are true and correct. The undersigned also agrees to
be bound by the terms of Section 10(b) of Attachment 3 to such Warrant.
CRUTTENDEN ROTH INCORPORATED
By:
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Name:
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Title:
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Dated:
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