STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of March 24,
2003, by and between CHAPEAU, INC., a Utah corporation (the "Company"), and
MFPI, LLC, a Delaware limited liability company (the "Purchaser").
RECITALS
WHEREAS, the Company has requested from the Purchaser funds in an amount
of up to $700,000 to be used by the Company for general corporate purposes, and
the Company has agreed to sell to the Purchaser shares of its common capital
stock, par value $0.001 each (the "Common Stock") on the terms and conditions
provided herein;
WHEREAS, the Company desires to sell, and the Purchaser desires to
purchase, up to 2,333,334 shares of Common Stock (the "Stock"), together with
warrants to purchase up to 2,333,334 additional shares of Common Stock (the
"Warrants") in accordance with the following terms and conditions,
NOW, THEREFORE, in consideration of the foregoing and the mutual terms and
provisions contained herein, the parties hereto agree as follows:
1. Sale and Purchase.
(a) The Company agrees to sell to the Purchaser, and the Purchaser agrees
to purchase from the Company, initially 2,000,000 shares of the Stock (the
"Initial Stock") for a purchase price (the "Purchase Price") equal to $0.30 per
share or an aggregate of $600,000.
(b) In addition to the payment of the Purchase Price, and in further
consideration for the sale of the Initial Stock, the Company agrees to issue to
the Purchaser simultaneously with the Initial Shares warrants (the "Warrants")
to acquire an additional 4,000,000 shares of Common Stock at a purchase price
of $0.50 each, the Warrants to be in the form attached to this Agreement as
Exhibit 1(b).
2. Option for Additional Shares of Stock.
(a) The Company also agrees to sell to the Purchaser, at the Purchaser's
option, the remaining 333,334 shares of Stock (the "Option Stock") at a
purchase price (the "Option Purchase Price") of $0.30 per share or an aggregate
of $100,000.
(b) In addition to the payment of the Option Purchase Price, and in
further consideration for the sale of the Option Stock, the Company agrees to
issue to the Purchaser simultaneously with the Option Stock warrants (the
"Option Warrants") to acquire an additional 666,668 shares of Common Stock at a
purchase price of $0.50 each, the Option Warrants to in substantially the same
tenor as the form of Warrants attached to this Agreement as Exhibit 1(b).
(c) To exercise its right to purchase the Option Stock, the Purchaser
shall deliver, at any time on or before December 31, 2003, notice to the
Company of its exercise, plus payment of the Option Purchase Price in cash or
immediately available funds.
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3. Closing.
(a) The closing (the "Closing") of purchase of the Initial Stock shall
occur at the office of the Purchaser effective the date of this Agreement.
(b) The Company acknowledges that it has, in installments paid on March
24 and March 28, 2003, received the Purchase Price in full, including without
limitation the amount of $60,000 which the Purchaser has paid, on behalf of the
Company, directly to Calim Private Equity, LLC ("Calim") as a placement fee.
The Company acknowledges the payment of the placement fee to Calim and further
acknowledges that it is aware that Calim is an affiliate of the Purchaser.
(c) At the Closing, the Company shall instruct its transfer agent to
deliver to the Purchaser the certificate representing the Initial Stock, free
and clear of all liens, claims, options or rights to purchase, warrants,
security interests, pledges, encumbrances and other rights of third parties.
In addition, at the Closing the Company shall deliver to the purchaser the
Warrants.
(d) At the Closing, and thereafter, each party agrees to execute and
deliver to the other any and all documents or instruments reasonably requested
by the other party to effect the sale and purchase of the Initial Stock and the
payment of the Purchase Price.
(e) In the event the Purchaser exercises its right to purchase the Option
Stock, then at the closing applicable to such purchase (the "Option Closing")
the Purchaser will pay the Option Purchase Price and the Company will deliver a
certificate representing the shares of Option Stock purchased and the Option
Warrants.
4. Representations and Warranties of the Company. Except as set forth
in the Schedule of Exceptions attached as Exhibit 4 to this Agreement, the
Company represents and warrants to the Purchaser as follows:
(a) The Company (i) is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Utah; (ii) has the
power, authority and legal right to own or lease and operate its property and
to conduct the business in which it is currently engaged; and (iii) is in
compliance with all requirements of applicable law except to the extent that
the failure to comply therewith could not, in the aggregate, have a material
adverse effect on the business, operations, property or financial or other
condition of the Company and could not materially adversely affect the ability
of the Company to perform its obligations under this Agreement and the Warrants
(collectively, the "Transaction Documents").
(b) The authorized capital of the Company consists of (i) 325,000,000
shares of the Common Stock, of which there are currently 15,677,550 issued and
outstanding, and (ii) 5,000,000 shares of preferred stock, par value $0.001
each (the "Preferred Stock"), of which none are currently outstanding. All
issued shares of Common Stock are validly issued, fully paid and non-
assessable. There are no options, warrants or other rights to acquire any
shares of Common Stock or Preferred Stock outstanding.
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(c) The Company has the power, authority and legal right to make, deliver
and perform each of the Transaction Documents and to issue the Stock hereunder
and has taken all necessary action to authorize this Agreement and other
transactions contemplated hereby on the terms and conditions of this Agreement
and to authorize the execution, delivery and performance of this Agreement and
the Warrants. No consent of any other person (including security holders and
creditors of the Company), and no authorization of, notice to, or other act by
or in respect of any governmental authority, is required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
or the Warrants. This Agreement and the Warrants have been duly executed and
delivered on behalf of the Company and each constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.
(d) At the Closing and, as applicable, the Option Closing, the Stock will
be free and clear of any and all liens, claims, options or rights to purchase,
security interests, pledges, encumbrances or any other restrictions or rights
of third parties.
(e) The Stock, when issued to the Purchaser in accordance with this
Agreement, will be fully paid, duly issued and non-assessable and the shares of
Common Stock issuable upon exercise of the Warrants and, as applicable, the
Option Warrants (the "Issuable Stock"), will, upon issuance to the Purchaser
upon exercise of the Warrants or the Option Warrants, be fully paid, duly
issued and non-assessable.
(f) The representations and warranties of the Company contained in that
certain Letter Loan Agreement dated August 14, 2002, as amended by letter dated
December 2, 2002k, each between the Company and Calim (the "Calim Agreement"),
are true and correct in all material respects on the day hereof as if made on
this day.
(g) The Company's Quarterly Report on Form 10-QSB as filed with the
United States Securities and Exchange Commission on February 19, 2003 (the
"10QSB") is true, correct and complete in all material respects, and from the
date thereof to the date hereof, there have been no material adverse changes in
the business of the Company.
5. Purchaser Representations.
(a) The Purchaser, in acquiring the Stock, makes the representations,
warranties and agreements contained in this Section 5.
(b) The Stock is being issued to the Purchaser in reliance upon its
representation to the Company that the Stock and the Warrants (collectively,
the "Securities") are being acquired for investment for the Purchaser's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the Securities, in whole or in part. The Purchaser further represents that it
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Securities.
(c) The Purchaser is an investor in securities of companies in the
development stage and acknowledges that it is able to fend for itself, can bear
the economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Securities. If other than an individual, the
Purchaser also represents it has not been organized for the purpose of
acquiring the Securities.
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(d) The Purchaser understands that any of the Securities that it is
purchasing or otherwise taking delivery of are or will be characterized as
"restricted securities" under the United States Securities Act of 1933, as
amended (the "1933 Act") inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under the 1933 Act
and applicable regulations such securities may be resold without registration
under the 1933 Act only in certain limited circumstances. The Purchaser
represents that it is familiar with Rule 144 promulgated under the 1933 Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the 1933 Act.
(e) The Purchaser agrees not to make any disposition of all or any
portion of the Securities (each a "Permitted Transfer") unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 5, to the extent this Section is then applicable, and:
(i) there is then in effect a registration statement under the
1933 Act covering the proposed disposition and such disposition is
made in accordance with such registration statement; or
(ii) (A) the Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition and (B) if reasonably requested by the Company, the
Purchaser shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of the applicable
Securities under the 1933 Act; and
(iii) notwithstanding (i) and (ii) above, no such
registration statement or opinion of counsel shall be necessary for
a transfer by a Purchaser (A) that is a partnership to a partner of
such partnership or a retired partner of such partnership who
retires after the date hereof, or to the estate of any such partner
or retired partner or the transfer by gift, will or intestate
succession of any partner to his or her spouse or to the siblings,
lineal descendants or ancestors of such partner or his or her
spouse, or (B) to any entity that is controlled by, controls or is
under common control with the Purchaser, if the transferee agrees
in writing to be subject to the terms hereof to the same extent as
if it were an original Purchaser hereunder.
(f) Certificates evidencing the Securities may bear one or all of the
following legends:
(i) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered
for sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such
registration is not required or unless sold pursuant to Rule 144 of
such Act;" and
(ii) Any legend required by the laws of the State and any other
applicable state of the United States.
6. Agreement. The Company agrees to pay or reimburse the Purchaser,
upon invoice, for its reasonable legal fees and expenses incurred in connection
with this Agreement and the transactions contemplated hereby.
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7. Miscellaneous.
(a) This Agreement constitutes the entire agreement and understanding
between the parties hereto related to the sale of Stock and supersedes and
controls all prior verbal and written agreements between the parties relating
to the sale of the Stock.
(b) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
(c) This Agreement shall be binding upon and shall inure to the benefit
of each of the parties and their respective successors and assigns.
(d) As used herein and as the context requires, the masculine, feminine,
and neuter genders shall include the others; the singular shall include the
plural and vice versa.
(e) If any term or provision hereof is void, illegal, or unenforceable,
said voidness, illegality, or unenforceability shall not affect the remaining
terms and provision hereof which shall be enforced as if said void, illegal, or
unenforceable provision was not set forth herein.
[Remainder of Page Intentionally Left Blank]
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EXECUTED AND DELIVERED as of the date and year first written above but actually
executed May , 2003.
CHAPEAU, INC.
By:________________________
Authorized Officer
MFPI, LLC
By:________________________
Patrick W.M.
Imeson, Managing Director
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EXHIBIT 1(b)
to
STOCK PURCHASE AGREEMENT
Form of Warrant
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EXHIBIT 4
to
STOCK PURCHASE AGREEMENT
Disclosure Schedule
1. The representations contained in Sections 4(b) and (f) are subject to
such other matters as may be disclosed in the 10QSB.
2. The representation contained in Section 4(b) is subject to the
further disclosure that pursuant to a Deferred Payment and Settlement Agreement
between the Company and P&J Properties ("P&J"), among other things the Company
agree to issue to P&J or its designee 100,000 shares of Common Stock.
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE
1933 ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER THE
1933 ACT AND APPLICABLE STATE SECURITIES LAW.
Warrant to Purchase Common Stock
of
Chapeau, Inc.
Void after March 24, 2008
This Warrant is issued to MFPI, LLC, or its registered assigns (the
"Holder") by Chapeau, Inc., a Utah corporation (the "Company"), as of March 24,
2003 (the "Warrant Issue Date"). This Warrant is issued pursuant to that
certain Stock Purchase Agreement dated as of the Warrant Issue Date (the
"Purchase Agreement"). Unless otherwise defined or the context otherwise
requires, capitalized terms used herein shall have the meanings assigned them
in the Purchase Agreement.
1. Shares. Subject to the terms and conditions of this Warrant, the
Holder is entitled, upon surrender of this Warrant at the principal office of
the Company (or at such other place as the Company shall notify the Holder in
writing), to purchase from the Company 4,000,000 fully paid and nonassessable
shares of Common Stock, as constituted on the Warrant Issue Date. The number of
shares of Common Stock issuable pursuant to this Section 1 (the "Shares") shall
be subject to adjustment pursuant to Section 9 below.
2. Exercise Price. The purchase price for the Shares shall be equal to
$0.50 per share, as adjusted from time to time pursuant to Section 9 below (the
"Exercise Price").
3. Exercise Period. This Warrant shall be exercisable, in whole or in
part, during the term commencing on the Warrant Issue Date and ending at 5:00
p.m. on the fifth anniversary of the Warrant Issue Date; provided that in the
event (each a "Disposition Event") of (i) the closing of the Company's sale or
transfer of all or substantially all of its assets or (ii) the closing of the
acquisition of the Company by another entity by means of merger, consolidation
or other transaction or series of related transactions, resulting in the
exchange of the outstanding shares of the Common Stock (unless (A) the
shareholders of the Company immediately prior to such transaction or series of
related transactions are holders of a majority of the voting equity securities
of the surviving or acquiring corporation immediately thereafter and (B) each
of such shareholders immediately prior to such transaction or series of related
transactions holds the same pro rata share of such majority of the voting
equity securities of the surviving or acquiring corporation as each hold of the
Company immediately prior to such transaction or series of related
transactions), this Warrant shall, on the date of a Disposition Event, no
longer be exercisable and become null and void. The Company shall notify the
Holder at least 20 days prior to the consummation of any Disposition Event;
provided that the Holder shall in any event have at least 40 days after the
Warrant Issue Date to exercise this Warrant.
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4. Method of Exercise. While this Warrant remains outstanding and
exercisable, the Holder may exercise this Warrant, in whole or in part, at one
time or from time to time, by:
(a) the surrender of this Warrant, together with a duly executed copy of
the form of Notice of Election attached hereto, to the Secretary of the Company
at its principal offices; and
(b) the payment to the Company of an amount equal to the aggregate
Exercise Price for the number of Shares being purchased.
In the event of a partial exercise of this Warrant, the Company shall cause to
be issued to the Holder a Warrant of like tenor to this Warrant for the number
of Shares for which this Warrant has not yet been exercised.
5. [Reserved]
6. Representations and Warranties of Holder. The initial Holder
referenced above, and each person who might hereafter become a Holder, hereby
represents and warrants, either by its execution hereof or its receipt of this
Warrant in a Permitted Transfer (as hereinafter defined) that:
(a) Acquisition for Own Account. This Warrant is being issued to the
Holder in reliance upon its representation to the Company that this Warrant and
the Common Stock to be received by it upon exercise of this Warrant
(collectively, the "Securities") are being and will be acquired for investment
for the Holder's own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and that the Holder has no
present intention of selling, granting any participation in, or otherwise
distributing the Securities, in whole or in part. The Holder further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Securities.
(b) Investment Experience. The Holder is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment, and has such knowledge
and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Securities. If other
than an individual, the Holder also represents it has not been organized for
the purpose of acquiring the Securities.
(c) Restricted Securities. The Holder understands that any of the
Securities that it is purchasing or otherwise taking delivery of are or will be
characterized as "restricted securities" under the 1933 Act inasmuch as they
are being acquired from the Company in a transaction not involving a public
offering and that under the 1933 Act and applicable regulations such securities
may be resold without registration under the 1933 Act only in certain limited
circumstances. The Holder represents that it is familiar with Rule 144
promulgated under the 1933 Act, as presently in effect, and understands the
resale limitations imposed thereby and by the 1933 Act.
(d) Further Limitations on Disposition. The Holder agrees not to make
any disposition of all or any portion of the Securities (each a "Permitted
Transfer") unless and until the transferee has agreed in writing for the
benefit of the Company to be bound by this Section 6, to the extent this
Section is then applicable, and:
(i) there is then in effect a registration statement under the
1933 Act covering the proposed disposition and such disposition is
made in accordance with such registration statement; or
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(ii) (A) the Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition and (B) if reasonably requested by the Company, the
Holder shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, that such disposition will
not require registration of the applicable Securities under the
1933 Act; and
(iii) notwithstanding (i) and (ii) above, no such
registration statement or opinion of counsel shall be necessary for
a transfer by a Holder (A) that is a partnership to a partner of
such partnership or a retired partner of such partnership who
retires after the date hereof, or to the estate of any such partner
or retired partner or the transfer by gift, will or intestate
succession of any partner to his or her spouse or to the siblings,
lineal descendants or ancestors of such partner or his or her
spouse, or (B) to any entity that is controlled by, controls or is
under common control with the Holder, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if
it were an original Holder hereunder.
(e) Legends. Certificates evidencing the Securities may bear one or all
of the following legends:
(i) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered
for sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such
registration is not required or unless sold pursuant to Rule 144 of
such Act;" and
(ii) Any legend required by the laws of the State and any other
applicable state of the United States.
7. Certificates for Shares. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter (with appropriate
restrictive legends, if applicable), and in any event within 15 days following
compliance by the Holder with the requirements of Section 4 above. The Company
shall not be required to issue any fractional shares, and if any fraction of a
Share would be issuable on the exercise of this Warrant in full, the Company
shall pay an amount in cash equal to the then current fair market value of a
Share, as then determined in good faith by the Board of Directors of the
Company, times the applicable fraction.
8. Reservation of Shares. The Company covenants that it will at all
times keep available such number of authorized shares of Common Stock, free
from all preemptive rights with respect thereto, which will be sufficient to
permit the exercise of this Warrant for the full number of Shares specified
herein. The Company covenants that the Shares, when issued pursuant to the
exercise of this Warrant, will be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens, and charges with respect to the
issuance thereof.
9. Adjustment of Exercise Price and Number of Shares. The number of and
kind of Securities purchasable or receivable upon exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the Company shall
subdivide the Common Stock, by split-up or otherwise, combine the Common Stock
or issue additional shares of Common Stock as a dividend or other distribution
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with respect to any of its securities, the number of Shares issuable on the
exercise of this Warrant shall be proportionately increased in the case of a
subdivision, dividend or distribution and shall be proportionately decreased in
the case of a combination. Appropriate adjustments shall also be made to the
Exercise Price, but the aggregate purchase price payable for the total number
of Shares purchasable under this Warrant (as adjusted) shall remain the same.
Any adjustment under this Section 9(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of a dividend or other distribution, or in the event that no
record date is fixed, upon the making of such dividend or distribution.
(b) Reclassification, Reorganization and Consolidation. In the event of
any reclassification, capital reorganization or change in the Common Stock,
other than as a result of an event provided for in (a) above, then, as a
condition of such transaction, the Holder shall have the right at any time
prior to the expiration of this Warrant to purchase, at a total price equal to
that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with the
applicable transaction by a holder of the same number of shares of Common Stock
as were purchasable by the Holder immediately prior to the transaction. In any
such case appropriate provisions shall be made with respect to the rights and
interest of the Holder so that this provision shall thereafter be applicable
with respect to any Securities deliverable upon exercise of this Warrant, and
appropriate adjustments shall be made to the Exercise Price; provided that the
aggregate purchase price shall remain the same.
(c) Notice of Adjustment. When any adjustment is required to be made in
the number or kind of Shares receivable upon exercise of this Warrant, or in
the Warrant Price, the Company shall promptly notify the Holder thereof and of
the number of Shares or other Securities thereafter receivable upon exercise of
this Warrant.
(d) No Impairment. The Company and the Holder will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company or the Holder,
respectively, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 9 and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Company
and the Holder against impairment.
10. No Shareholder Rights. Prior to exercise of this Warrant, the Holder
shall not be entitled to any rights of a shareholder with respect to the
Shares, including without limitation the right to vote Shares, receive
dividends or other distributions thereon, exercise preemptive rights or, other
than as may be provided in the Purchase Agreement, be notified of shareholder
meetings, and the Holder shall not be entitled to any notice or other
communication concerning the business or affairs of the Company. However,
nothing in this Section 10 shall limit the right of the Holder to be provided
the notices required under this Warrant and, in addition, the Company will
afford to the Holder the right, upon advance notice, to meet periodically with
the Company's chief executive and chief financial officers during mutually
agreeable business hours to discuss the Company's business and affairs.
11. Transfers. Subject to compliance with the requirements of Section 6
above with respect to applicable federal and state securities laws, this
Warrant and all rights (but only with all related obligations) hereunder are
transferable in whole or in part by the Holder upon reasonable prior written
notification to the Company. The transfer shall be recorded on the books of the
Company upon (i) the surrender of this Warrant, properly endorsed, to the
Company at its principal offices; (ii) the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer; and
(iii) the transferee's agreement in writing to be bound by and subject to the
terms and conditions of this Warrant. In the event of a partial transfer, the
Company shall issue to the Holders one or more appropriate new Warrants of like
tenor to this Warrant.
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12. Successors and Assigns. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holders
and their respective successors and assigns.
13. Registration Rights. The Shares issuable upon exercise of this
Warrant shall be entitled to be included, pari passu, with any other shares of
Common Stock and any securities issuable upon conversion of the Common Stock,
under the terms of any registration rights, if any, that the Company may have
heretofore granted or may hereafter grant to any other persons whomsoever, and
the Company agrees to do all such things in connection with any registration
rights agreements or registration of the Common Stock under the 1933 Act to
ensure that the rights of the Holder hereunder are recognized in connection
therewith.
14. Amendments and Waivers. Any term of this Warrant may be amended and
the observance of any term of this Warrant may be waived (either generally or
in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder.
15. Captions. The section and subsection headings of this Warrant are
inserted for convenience only and shall not constitute a part of this Warrant
in construing or interpreting any provision hereof.
16. Governing Law. This Warrant shall be governed by the laws of the
State of Delaware.
IN WITNESS WHEREOF, this Warrant to be executed by the Company and
acknowledged by the Holder as of March 24, 2003 but actually executed May ,
2003.
CHAPEAU, INC.
By:_______________________
Authorized Officer
ACCEPTED AND ACKNOWLEDGED:
MFPI, LLC
By: ______________________
Managing Director
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NOTICE OF EXERCISE
To:Chapeau, Inc.
The undersigned hereby elects to purchase _________ shares of the Common
Stock of Chapeau, Inc. (the "Company") pursuant to the terms of the attached
Warrant, and payment of the Exercise Price per share required under the Warrant
accompanies this notice.
The undersigned hereby represents and warrants that it is acquiring the
indicated shares for its own account for investment purposes only, and not for
resale or with a view to distribution of such shares or any part thereof.
WARRANT HOLDER:
_________________________________________
By:______________________________________
Date:____________________________________
Name in which shares should be registered:
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