WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is entered into as of the 22
day of March, 1999, by and between R & R RANCHING, INC., a Nevada corporation
(the "Company"), and Interwest Transfer Company, Inc., a securities transfer
agency incorporated under the laws of the State of Utah, as warrant agent (the
"Warrant Agent").
Recitals
A. The Company is conducting a registered offering of 100,000 Units.
Each Unit is comprised of (i) one share of the Company's one mill ($0.001) par
value common stock; (ii) one "A" Warrant entitling the holder to purchase,
during the Exercise Period as defined in Section 5 herein, for $2.50 one share
of common stock (the "'A' Warrant Price"); and (iii) one "B" Warrant entitling
the holder to purchase, during the Exercise Period as defined in Section 5
herein, for $5.00 one share of common stock (the "'B' Warrant Price"). This
Agreement governs both the "A" Warrants and the "B" Warrants, including the
issuance, exercise, and redemption of such Warrants, and the rights and
obligations of the holders thereof. The shares of common stock issuable on
exercise of the Warrants are collectively referred to herein as the "'A'
Warrant Shares" or the "'B' Warrant Shares," as applicable. The Warrants may
not be separated or transferred without the Company's prior written consent.
B. The Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to act in connection with the
issuance, division, transfer, exchange, and exercise of the Warrants.
Agreement
---------
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the registered and record owners of the Warrants
(the "Holders"), the Company and the Warrant Agent hereby agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
2. Transferability and Form of Warrants.
2.1 Registration. The Warrants shall be designated by class and
numbered and shall be registered in registers as they are issued. The
Company and the Warrant Agent shall be entitled to treat the Holder of
any Warrant as the owner in fact thereof for all purposes and shall not
be bound to recognize any equitable or other claim to or interest in
such Warrant on the part of any other person, and shall not be liable
for any registration or transfer of Warrants which are registered or to
be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or
transfer, or with knowledge of such facts that the Warrant Agent's
participation therein amounts to bad faith.
2.2 Transfer. The Warrants shall be non-transferable without
the prior written consent of the Company.
2.3 Form of Warrants. The Warrants, including the form of
election to purchase Warrant Shares, shall be represented by
certificates in substantially the forms set forth as Exhibit "A" (as to
the "A" Warrants) and Exhibit "B" (as to the "B" Warrants), which are
attached hereto and incorporated herein by reference. The price per
Warrant Share and the number of Warrant Shares issuable on exercise of
Warrants are subject to adjustment on the occurrence of certain events,
all as hereinafter provided. The Warrants shall be executed on behalf
of the Company by the manual or facsimile signature of the present or
any future president or vice-president of the Company, under its
corporate seal, affixed or in facsimile, attested by the manual or
facsimile signature of the present or any future secretary or assistant
secretary of the Company. The Warrants shall be dated as of the date of
countersignature thereof by the Warrant Agent, either on initial
issuance or on division, exchange, substitution or transfer.
3. Countersignature of Warrants. The Warrants shall be countersigned by
the Warrant Agent (or any successor to the Warrant Agent then acting as
warrant agent under this Agreement) and shall not be valid for any purpose
unless so countersigned. The Warrants may be countersigned by the Warrant
Agent (or by its successor as warrant agent) and may be delivered by the
Warrant Agent, notwithstanding that the persons whose manual or facsimile
signatures appearing thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature, issuance or
delivery. In total, the Warrant Agent shall, on written instructions of the
president or the secretary of the Company, countersign, issue and deliver
Warrants entitling the Holders thereof to purchase not more than 100,000 "A"
Warrant Shares and 100,000 "B" Warrant Shares.
4. Exchange of Units and Warrants. Any Warrant may be exchanged for
another Warrant of the same class entitling the holder thereof to purchase a
like aggregate number of Warrant Shares as the Warrant surrendered then
entitles the holder to purchase. Any Warrant Holder desiring to exchange
Warrants shall make such request in writing delivered to the Warrant Agent,
and shall surrender, properly endorsed, the Warrant to be so exchanged.
Thereupon, the Warrant Agent shall countersign and deliver to the person
entitled thereto a Warrant of the same class as requested. The Warrant
Agent's duty to transfer any Warrants shall be governed by the applicable
Uniform Commercial Code.
5. Term of Warrants; Exercise of Warrants.
5.1 Term of Warrants. Each Holder of Warrants shall have the
right, which may be exercised for a period of five years from the date
of issuance of the Warrant (the "Warrant Exercise Period"), to purchase
from the Company one fully paid and nonassessable Warrant Share for each
Warrant held at the warrant price as set forth in Sections 9 and 10
hereof (the "Warrant Price"), subject to the conditions set forth in
this Agreement. If the Warrant is not exercised during the Warrant
Exercise Period, it shall expire.
The Warrant Shares shall be issuable on exercise of the Warrants on
surrender to the Company at the principal office of the Warrant Agent in
Holladay, Utah, with the form of election to purchase on the reverse
thereof duly completed and signed, and on payment to the Warrant Agent
for the account of the Company of the Warrant Price for the number of
Warrant Shares in respect of which such Warrants are then exercised.
Payment of the applicable Warrant Price shall be made in cash or by
cashier's check or by collection of checks or drafts. Subject to
Subsections 5.1 and 5.2 of this Section, on such surrender of Warrants
and payment of the applicable Warrant Price as aforesaid, the Company
shall issue and cause to be delivered with all reasonable dispatch to or
on the written order of the Holder and in such name or names as the
Holder may designate, a certificate or certificates for the number of
full Warrant Shares so purchased on the exercise of such Warrants. No
fractional Warrant Shares shall be issuable on such surrender. Such
certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become
a holder of record of such Warrant Shares as of the date of the
surrender of such Warrants and payment of the applicable Warrant Price,
as aforesaid; provided, however, that if, at the date of surrender of
such Warrants and payment of such Warrant Price, the transfer books for
the Warrant Shares on the exercise of such Warrants shall be closed, the
certificates for the Warrant Shares in respect of which such Warrants
are then exercised shall be issuable as of the date on which such books
shall next be opened (whether before or after expiration of the exercise
period) and until such date the Company shall be under no duty to
deliver any certificate for such Warrant Shares; provided further,
however, that the transfer books of record, unless otherwise required by
law, shall not be closed at any one time for a period longer than 60
days. The right of purchase represented by the Warrants shall be
exercisable, at the election of the Holder thereof, either in full or
from time to time in part and, in the event that any Warrant is
exercised in respect of less than all of the Warrant Shares specified
therein at any time prior to the date of expiration of the applicable
Warrant class, a new Warrant or Warrants of the same class will be
issued for the remaining number of Warrant Shares, and the Warrant Agent
is hereby irrevocably authorized to countersign and to deliver the
required new Warrants pursuant to the provisions of this Section and of
Section 3 hereof. The Company, whenever required by the Warrant Agent,
will supply the Warrant Agent with Warrants of the applicable class,
duly executed on behalf of the Company for such purpose.
5.2 Exercise of Warrants. The Warrants may not be exercised by
the Holders thereof in the absence of an exemption from registration
under the Securities Act and applicable state securities laws or an
effective registration statement pertaining to the Warrant Shares. In
the event that the Company files a registration statement under the
Securities Act with the Securities and Exchange Commission during the
Warrant Exercise Period, such registration statement shall also cover
the resale of the Warrant Shares issuable on exercise of the Warrants.
The Company shall bear all registration expenses in connection with any
registration, qualification and compliance by the Company.
5.3. Call of Warrants. Upon 30 days' written notice, the Company
shall have the option, at any time during the Warrant Exercise Period,
to call, redeem and acquire all of the Warrants that are then
outstanding and unexercised, on the date specified in such notice (the
"Redemption Date"), which Redemption Date shall be 30 days after the
date of such notice, for an amount equal to one cent ($0.01) per
Warrant; provided, however, that the Warrant Holders shall have the
right during the 30-day period immediately following the date of such
notice to exercise the Warrants as provided hereinabove. In the event
that any Warrants are exercised during such 30-day period, this call
option shall be deemed not to have been exercised by the Company as to
the Warrants exercised by the holders thereof. Such notice of
redemption shall require each Warrant holder to surrender to the
Company, on the Redemption Date, at the corporate office of the Warrant
Agent (or its successor), his certificate or certificates representing
the Warrants to be redeemed. Notwithstanding the fact that any Warrants
called for redemption have not been surrendered for redemption and
cancellation of the Redemption Date, after the Redemption Date, such
Warrants shall be deemed to be expired and all rights of the holders of
such unsurrendered Warrants shall cease and terminate, other than the
right to receive the redemption price of one cent ($0.01) per Warrant
for such Warrants, without interest; provided, however, that such right
to receive the redemption price shall itself expire at the end of the
Warrant Exercise Period. The Company shall notify the Warrant Agent
verbally, with confirmation in writing, of the call of the Warrants and
of the Redemption Date, and the Company shall instruct the Warrant Agent
accordingly as to the procedures to be followed by the Warrant Agent in
connection with the redemption of the Warrants.
6. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Shares; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect to the issuance or delivery of any Warrants or
certificates for Warrant Shares involving a transfer of record or beneficial
ownership.
7. Mutilated or Missing Warrants. In case any certificate representing
any Warrant is mutilated, lost, stolen or destroyed, the Company may at its
discretion issue and the Warrant Agent shall countersign and deliver in
exchange and substitution for and on cancellation of the mutilated Warrant, or
in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of the same class and representing an equivalent right or interest,
but only on receipt of evidence satisfactory to the Company and the Warrant
Agent of such loss, theft or destruction of such Warrant and indemnity, if
requested, also satisfactory to them. Applicants for such substitute Warrants
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
8. Reservation and Registration of Warrant Shares. There have been
reserved, and the Company shall at all times keep reserved, out of the
authorized and unissued shares of Common Stock, a number of shares sufficient
to provide for the exercise of the rights of purchase represented by the
outstanding Warrants, assuming exercise of all Warrants. The Warrant Agent
and every subsequent transfer agent for any Warrant Shares issuable on the
exercise of any of the rights of purchase aforesaid will be irrevocably
authorized and directed at all times to reserve such number of authorized and
unissued Warrant Shares as shall be requisite for such purpose. The Company
will keep a copy of this Agreement on file with any subsequent transfer agent
for the Warrant Shares issuable on the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably
authorized to requisition from time to time from any such transfer agent stock
certificates required to honor outstanding Warrants on exercise thereof in
accordance with the terms of this Agreement. The Company will supply such
transfer agent with duly executed stock certificates for such purpose and will
provide or otherwise make available any cash which may be payable as provided
in Section 11 hereof. All Warrants surrendered in the exercise of the rights
thereby evidenced shall be canceled by the Warrant Agent and shall be
maintained by the Warrant Agent, as the Company's property. Promptly after
the date of expiration of the Warrants, the Warrant Agent shall certify to the
Company the total aggregate amount of Warrants then outstanding, and
thereafter no Warrant Shares shall be subject to reservation in respect of
such Warrants.
At such time as the closing bid price for the Company's common stock on
the OTC Bulletin Board has exceeded the Warrant Price of the "A" Warrants
and/or the "B" Warrants by $0.75 per share for 10 consecutive trading days,
the Company shall use its best efforts to secure registration of the shares
underlying such Warrants as expeditiously as possible, and to maintain such
registration effective until the earlier of: (i) the expiration of the
applicable Warrant Exercise Period; (ii) the Redemption Date as defined above;
or (iii) the twentieth consecutive trading day on which the closing bid price
for the Company's common stock has been less than $3.25 per share (in the case
of "A" Warrants) or $5.75 per share (in the case of "B" Warrants). No Warrant
Share shall be issued unless and until such registration requirements have
been satisfied.
9. Warrant Price. The Warrant Price shall be $2.50 per "A" Warrant
Share and $5.00 per "B" Warrant Share. The Warrant Price shall be subject to
adjustment pursuant to Section 10 hereof.
10. Adjustment of Warrant Prices and Number of Warrant Shares.
10.1 Adjustments. The number of Warrant Shares issuable on the
exercise of each Warrant and the applicable Warrant Price shall be
subject to adjustment as follows:
(a)(1) In case the Company shall (i) pay a dividend in Common
Stock or make a distribution in Common Stock; (ii) subdivide its
outstanding Common Stock; (iii) combine its outstanding Common Stock
into a smaller number of shares; or (iv) issue by reclassification of
its Common Stock other securities of the Company, the number of
Warrant Shares issuable on exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder of each Warrant shall be
entitled to receive on exercise the kind and number of Warrant Shares
of the Company which he would have owned or been entitled to receive
after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto.
(2) Any adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event
retroactive to the record date for such event.
(b) No adjustment in the number of Warrant Shares issuable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent in the number of Warrant
Shares issuable on the exercise of each Warrant; provided, however,
that any adjustments which by reason of this paragraph (b) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment.
(c) Whenever the number of Warrant Shares issuable on the
exercise of each Warrant is adjusted, as herein provided, the
applicable Warrant Price payable on exercise of each Warrant shall be
adjusted by multiplying such Warrant Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number
of Warrant Shares issuable on the exercise of each Warrant
immediately prior to such adjustment and the denominator of which
shall be the number of Warrant Shares so issuable immediately
thereafter.
(d) Whenever the number of Warrant Shares issuable on the
exercise of each Warrant or the applicable Warrant Price of such
Warrant Shares issuable are adjusted, as herein provided, the Company
shall cause the Warrant Agent to promptly mail by first class mail,
postage prepaid, to each Holder of Warrants notice of such adjustment
or adjustments and shall deliver to the Warrant Agent a certificate
of a firm of independent accountants selected by the Board of
Directors of the Company (which may be the regular accountants
employed by the Company) setting forth the number of Warrant Shares
issuable on the exercise of each Warrant and the Warrant Price of
such Warrant Shares issuable after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made. Such
certificate, in the absence of manifest error, shall be conclusive
evidence of the correctness of adjustment. The Warrant Agent shall
be under no duty or responsibility with respect to any such
certificate, except to exhibit the same, from time to time, to any
Holder of Warrants desiring an inspection thereof during reasonable
business hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holder of Warrants to determine whether
any facts exist which may require any adjustment of the Warrant
Prices of the number of Warrant Shares issuable or other securities
purchasable or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in
making such adjustment.
(e) For purposes of this Subsection 10.1, the term "Common
Stock" shall mean (i) the class of stock designated as the common
stock of the Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or reclassifications
of such shares consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. In the
event that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders of Warrants shall become entitled to
purchase any securities of the Company other than Warrant Shares,
thereafter the number of such other securities so purchasable on
exercise of each Warrant and the Warrant Price of such securities
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in paragraphs (a) through (d),
inclusive, above, and the provisions of Section 5 and Subsections
10.2 through 10.5, inclusive, with respect to the Warrant Shares
shall apply on like terms to any such other securities.
10.2 No Adjustments for Dividends. Except as provided in
Subsection 10.1, no adjustment in respect of any dividends shall be made
during the term of the Warrants or on the exercise of the Warrants.
10.3 No Adjustment in Certain Cases. No adjustments shall be
made:
(a) In connection with the issuance of any Warrant Shares on the
exercise of the Warrants;
(b) In connection with the issuance or conversion of shares of
preferred stock, if any;
(c) In connection with the issuance of additional Warrant Shares
or other securities on account of any anti-dilution provisions
contained in or relating to the Warrants;
(d) In connection with the purchase or other acquisition by the
Company of any shares of Common Stock, preferred stock, evidences of
its indebtedness or assets, or rights, options, warrants, or
convertible securities containing the right to subscribe for or
purchase Common Stock; or
(e) In connection with the sale or exchange by the Company of
any preferred stock, evidences of its indebtedness or assets, or
rights, options, warrants, or convertible securities containing the
right to subscribe for or purchase Common Stock.
10.4 Preservation of Purchase Rights on Reclassification,
Consolidation, Etc. In case of any consolidation of the Company with or
merger of the Company into another corporation or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company or such successor
or purchasing corporation, as the case may be, shall execute with the
Warrant Agent an agreement that each Holder of a Warrant shall have the
right thereafter on payment of the Warrant Price in effect immediately
prior to such action to purchase on exercise of each Warrant the kind
and amount of Warrant Shares and other securities and property which it
would have owned or would have been entitled to receive after the
happening of such consolidation, merger, sale, or conveyance had such
Warrant been exercised immediately prior to such action. The Company
shall mail by first class mail, postage prepaid, to the Holder of each
Warrant notice of the execution of any such agreement. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 10.
The provisions of this Subsection 10.4 shall similarly apply to
successive consolidations, mergers, sales or conveyances. The Warrant
Agent shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement relating
either to the kind or amount of Warrant Shares of stock or other
securities or property receivable on exercise of Warrants or with
respect to the method employed and provided therein for any adjustments.
10.5 Statement on Warrants. Irrespective of any adjustments in
the applicable Warrant Price or the number or kind of Warrant Shares
purchasable on the exercise of the Warrants, Warrants theretofore or
hereafter issued may continue to express the same price and number and
kind of Warrant Shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
11. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable on the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares represented by the Warrants so presented. If any fraction of a
share would, except for the provisions of this Section 11, be issuable on the
exercise of any Warrant (or specified portion thereof), the Company shall pay
an amount in cash equal to the current value of such fraction computed on the
basis of (i) the highest closing bid price of the Common Stock, as reported by
NASDAQ on the last business day prior to the date of exercise; (ii) the last
reported sale price of the Common Stock on the national stock exchange on
which the Common Stock is listed on the last business day prior to the date of
exercise on which such a sale shall have been effected, if the Common Stock is
listed on such an exchange, or (iii) if not quoted on NASDAQ or listed on an
exchange as reported on the Electronic Bulletin Board maintained by the NASD
or, if not on the Electronic Bulletin Board, any other reliable medium of
quotation.
12. No Rights as Shareholders; Notices to Warrant Holders. Nothing
contained in this Agreement or in the Warrants shall be construed as
conferring on the Holders or their transferees the right to vote or to receive
dividends or to consent to or to receive notice as shareholders in respect of
the meeting of shareholders for the election of directors of the Company or
any other matter, or any rights whatsoever as shareholders of the Company.
13. Disposition of Proceeds on Exercise of Warrants; Inspection of
Warrant Agreement. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
moneys collected by the Warrant Agent for the purchase of the Company's
Warrant Shares through the exercise of such Warrants. The Warrant Agent shall
keep copies of this Agreement and any notices given or received hereunder
available for inspection by Holders of Warrants during normal business hours
at its principal office in Holladay, Utah. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement
as the Warrant Agent may request.
14. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, that such
corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 16 hereof. In case at the time such successor
to the Warrant Agent shall succeed to the agency created by this Agreement,
any of the Warrants shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned, and in case at that
time any of the Warrants shall not have been countersigned, any successor to
the Warrant Agent may countersign such Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent, and
in all such cases, the Warrant shall have the full force provided in the
Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior
name and deliver Warrants so countersigned, and in case at that time any of
the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants either in its prior name or in its changed name, and
in all such cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
15. Concerning the Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement on the following terms and
conditions, by all of which the Company and the Holders of Warrants, by their
acceptance thereof shall be bound:
15.1 The statements contained herein and in the Warrants shall be
taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the
Warrants except as herein otherwise provided.
15.2 The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this
Agreement or in the Warrants to be complied with by the Company.
15.3 The Warrant Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys, agents or employees and the
Warrant Agent shall not be answerable or accountable for any act of any
such attorneys, agents or employees or for any loss to the Company
resulting from such act, except for the negligence or bad faith of such
attorneys, agents or employees; provided, reasonable care shall have
been exercised in the selecting and continued employment thereof.
15.4 The Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel for the Company), and the Warrant
Agent shall incur no liability or responsibility to the Company or to
any Holder of any Warrant in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the opinion
or the advice of such counsel.
15.5 Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate
signed by the president or a vice-president or the treasurer or the
secretary of the Company and delivered to the Warrant Agent, and such
certificate shall be full authorization to the Warrant Agent for any
action taken or suffered in good faith by it under the provisions of
this Agreement in reliance on such certificate.
15.6 The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of its duties under the terms of this Agreement, to reimburse
the Warrant Agent for all expenses, taxes and governmental charges, and
other charges of any kind and nature incurred by the Warrant Agent in
the execution of its duties under the terms of this Agreement and to
indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything
done or omitted by the Warrant Agent in the execution of its duties
under the terms of this Agreement, except as a result of the Warrant
Agent's negligence or bad faith.
15.7 The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely
to involve expense unless the Company or one or more Holders of Warrants
shall furnish the Warrant Agent with reasonable security and indemnity
for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or
under any of the Warrants may be enforced by the Warrant Agent without
the possession of any of the Warrants or the production thereof at any
trial or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent, and any recovery of judgment shall be for the ratable
benefit of the Holders of the Warrants, as their respective rights or
interests may appear.
15.8 The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to or otherwise act as fully and freely as
though it were not Warrant Agent under this Agreement. Nothing herein
shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
15.9 The Warrant Agent shall act hereunder solely as agent, and
its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement, except for its own
negligence or bad faith.
15.10 The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder of any Warrant for any
action taken in reliance on any notice, resolution, waiver, consent,
order, certificate or other paper, document or instrument reasonably
believed by it to be genuine and to have been signed, sent, or presented
by the proper party or parties.
15.11 The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant (except its
countersignature thereof), nor shall the Warrant Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares (or other stock) to
be issued pursuant to this Agreement or any Warrant or as to whether any
Warrant Shares (or other stock) will when issued be validly issued,
fully paid, and nonassessable or as to the Warrant Price, or the number
or kind or amount of Warrant Shares or other securities or other
property issuable on exercise of any Warrant.
15.12 The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the chairman of the board or the president or a
vice-president or the secretary or the treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its
duties, and shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such
officer.
16. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to
the Warrant Agent from the Company. If the Warrant Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make
such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the Holder of a Warrant (who shall with such
notice submit his Warrant for inspection by the Company), then the Holder of
any Warrant may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or such a court, shall be a bank, trust
company or securities transfer agency, in good standing, incorporated under
the laws of the States of Delaware, Nevada or Utah or any other jurisdiction
within the United States of America. After appointment, the successor warrant
agent shall be vested with the same powers, rights, duties, and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer
to the successor warrant agent any property at the time held by it hereunder,
and execute and deliver any further assurance, conveyance, act, or deed
necessary for the purpose. Failure to file any notice provided for in this
Section 16, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the appointment
of the successor warrant agent, as the case may be. In the event of such
resignation or removal, the successor warrant agent shall mail, first class,
to each Holder, written notice of such removal or resignation and the name and
address of such successor warrant agent.
17. Identity of Transfer Agent. Forthwith on the appointment of any
subsequent Transfer Agent for the Company's Warrant Shares, or any other
shares of the Company's capital stock issuable on the exercise of the rights
of purchase represented by the Warrants, the Company will file with the
Warrant Agent a statement setting forth the name and address of such Transfer
Agent.
18. Notices. Any notice pursuant to this Agreement by the Company or
by the Holder of any Warrant to the Warrant Agent, or by the Warrant Agent or
by the Holder of any Warrant to the Company, shall be in writing and shall be
deemed to have been duly given if delivered or mailed certified mail, return
receipt requested (a) if to the Company, to R & R Ranching, Inc., 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, and (b) if to the Warrant Agent, to
Interwest Transfer Company, Inc., 0000 Xxxx Xxxxxx-Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxx 00000. Each party hereto may from time to time change the
address to which notices to it are to be delivered or mailed hereunder by
notice in writing to the other party.
Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders of Warrants shall be in writing and shall be
deemed to have been duly given if mailed, postage prepaid, to such Holders at
their respective addresses as reflected on the books of the Warrant Agent.
19. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement, without the approval of
any Holders of Warrants, in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not be
inconsistent with the provision of the Warrants and which shall not adversely
affect the interests of the Holders of the Warrants. In this regard, but not
by way of limitation, establishing an earlier date of exercise without a
change in the expiration date of the Warrants set forth in Section 5 or
extending the period for exercise without a change in the date on which the
Warrants are first exercisable set forth in Section 5 shall not be deemed to
adversely affect the interests of the Holders. As such, the board of
directors of the Company and the Warrant Agent may at their discretion extend
the exercise periods for the Warrants.
20. Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
21. Merger or Consolidation of the Company. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall
expressly assume, by supplemental agreement satisfactory in form to the
Warrant Agent and executed and delivered to the Warrant Agent, the due and
punctual performance and observance of each and every covenant and condition
of this Agreement to be performed and observed by the Company.
22. Applicable Law. This Agreement and each Warrant issued hereunder
shall be deemed to be a contract made under the laws of the state of Utah and
for all purposes shall be construed in accordance with the laws of said state.
23. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent, and the Holders of the Warrants any legal or equitable right,
remedy or claim under this Agreement, but this Agreement shall be for the sole
and exclusive benefit of the Company, the Warrant Agent and the Holders of the
Warrants.
24. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one
and the same instrument.
25. Captions. The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have no
substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
R & R RANCHING, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx, President
INTERWEST TRANSFER COMPANY, INC., as Warrant Agent
By /s/ Xxxx Xxxxxx
---------------
Xxxx Xxxxxx, President
