Contract
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933,
AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS
TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CREATIVE VISTAS, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED
Right
to
Purchase up to 2,411,003 Shares of Common Stock of
Creative
Vistas, Inc.
(subject
to adjustment as provided herein)
COMMON
STOCK PURCHASE WARRANT
|
No.
_________________
|
Issue
Date: February 13, 2006
|
Creative
Vistas, Inc., a corporation organized under the laws of the State of Arizona
(“CVAS”), hereby certifies that, for value received, LAURUS MASTER FUND, LTD.,
or assigns (the “Holder”), is entitled, subject to the terms set forth below, to
purchase from the Company (as defined herein) from and after the Issue Date
of
this Common Stock Purchase Warrant (this “Warrant”) and at any time or from time
to time on or after a respective Warrant Effective Date and prior to 5:00 p.m.,
New York time, through the close of business February ___,
2016
(the “Expiration Date”), up to 2,411,003 fully paid and nonassessable shares of
Common Stock (as hereinafter defined), no par value per share at the applicable
Exercise Price per share (as defined below). The number and character of such
shares of Common Stock and the applicable Exercise Price per share are subject
to adjustment as provided herein.
As
used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:
(a) The
term
“Company” shall include CVAS and any corporation which shall succeed, or assume
the obligations of, CVAS hereunder.
(b) The
term
“Common Stock” includes (i) the Company’s Common Stock, no par value per share;
and (ii) any other securities into which or for which any of the securities
described in the preceding clause (i) may be converted or exchanged pursuant
to
a plan of recapitalization, reorganization, merger, sale of assets or
otherwise.
(c) The
term
“Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which
the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant
to
Section 4 or otherwise.
(d) A
“Warrant Effective Date” applicable under this Warrant shall be the
75th
day
following the provision by the Holder to the Company of an Exercise Notice
(as
defined below) stating that the Holder wishes to exercise its option hereunder
to purchase all or a portion of the Common Stock or Other Securities that it
is
entitled to receive in accordance with this Warrant. The Exercise Notice shall
set forth the amount of shares of Common Stock that the Holder shall receive
on
the respective Warrant Effective Date.
(e) The
“Exercise Price” applicable under this Warrant shall be $0.01 for each share of
Common Stock acquired hereunder.
1. Exercise
of Warrant.
1.1 Number
of Shares Issuable upon Exercise.
From
and after the date hereof through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole or in
part,
by delivery of an original or fax copy of an exercise notice in the form
attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of
the Company, subject to adjustment pursuant to Section 4. Each exercise of
this
Warrant shall be deemed to have been effected immediately prior to the close
of
business on the day on which this Warrant shall have been surrendered to the
Company as provided in Section 2.2 below.
1.2 Company
Acknowledgment.
The
Company will, at the time of the exercise of this Warrant, upon the request
of
the holder hereof acknowledge in writing its continuing obligation to afford
to
such holder any rights to which such holder shall continue to be entitled after
such exercise in accordance with the provisions of this Warrant. If the holder
shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any such rights.
1.3 Trustee
for Warrant Holders.
In the
event that a bank or trust company shall have been appointed as trustee for
the
holders of this Warrant pursuant to Subsection 3.2, such bank or trust company
shall have all the powers and duties of a warrant agent (as hereinafter
described) and shall accept, in its own name for the account of the Company
or
such successor person as may be entitled thereto, all amounts otherwise payable
to the Company or such successor, as the case may be, on exercise of this
Warrant pursuant to this Section 1.
2. Procedure
for Exercise.
2.1 Delivery
of Stock Certificates, Etc., on Exercise.
The
Company agrees that the shares of Common Stock purchased upon exercise of this
Warrant shall be deemed to be issued to the Holder as the record owner of such
shares as of the close of business on the date on which this Warrant shall
have
been surrendered and payment made for such shares in accordance herewith. As
soon as practicable after the exercise of this Warrant in full or in part,
and
in any event within three (3) business days thereafter, the Company at its
expense (including the payment by it of any applicable issue taxes) will cause
to be issued in the name of and delivered to the Holder, or as such Holder
(upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares
of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise.
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Exercise.
Payment
may be made either (i) in cash or by certified or official bank check payable
to
the order of the Company equal to the applicable aggregate Exercise Price,
(ii)
if there is not an effective registration statement covering the resale of
the
shares of Common Stock issuable following the exercise of this Warrant, by
delivery of the Warrant, or shares of Common Stock and/or Common Stock
receivable upon exercise of the Warrant in accordance with the immediately
succeeding sentence and the formula contained therein, or (iii) by a combination
of any of the foregoing methods, for the number of Common Shares specified
in
such Exercise Notice (as such exercise number shall be adjusted to reflect
any
adjustment in the total number of shares of Common Stock issuable to the Holder
per the terms of this Warrant) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.
3. Effect
of Reorganization, Etc.
3.1 Reorganization,
Consolidation, Merger, Etc.
In case
at any time or from time to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any
plan
or arrangement contemplating the dissolution of the Company, then, in each
such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after
the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if
such
Holder had so exercised this Warrant, immediately prior thereto, all subject
to
further adjustment thereafter as provided in Section 4.
3.2 Dissolution.
In the
event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, concurrently with
any distributions made to holders of its Common Stock, shall at its expense
deliver or cause to be delivered to the Holder the stock and other securities
and property (including cash, where applicable) receivable by the Holder of
the
Warrant pursuant to Section 3.1, or, if the Holder shall so instruct the
Company, to a bank or trust company specified by the Holder and having its
principal office in New York, NY as trustee for the Holder (the
“Trustee”).
3.3 Continuation
of Terms.
Upon
any reorganization, consolidation, merger or transfer (and any dissolution
following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable
to
the shares of stock and other securities and property receivable on the exercise
of this Warrant after the consummation of such reorganization, consolidation
or
merger or the effective date of dissolution following any such transfer, as
the
case may be, and shall be binding upon the issuer of any such stock or other
securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether
or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4. In the event this Warrant does not continue in full
force
and effect after the consummation of the transactions described in this Section
3, then the Company’s securities and property (including cash, where applicable)
receivable by the Holder will be delivered to the Holder or the Trustee as
contemplated by Section 3.2.
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4. Extraordinary
Events Regarding Common Stock.
In the
event that the Company shall (a) issue additional shares of the Common Stock
as
a dividend or other distribution on outstanding Common Stock to all of the
Company’s common stockholders, (b) subdivide its outstanding shares of Common
Stock, or (c) combine its outstanding shares of the Common Stock into a smaller
number of shares of the Common Stock, then, in each such event, the Exercise
Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Exercise Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
event and the denominator of which shall be the number of shares of Common
Stock
outstanding immediately after such event, and the product so obtained shall
thereafter be the Exercise Price then in effect. The Exercise Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive event or events described herein in this Section 4. The number of
shares of Common Stock that the holder shall thereafter, on the exercise hereof
as provided in Section 1, be entitled to receive shall be increased to a number
determined by multiplying the number of shares of Common Stock that would
otherwise (but for the provisions of this Section 4) be issuable on such
exercise by a fraction of which (a) the numerator is the Exercise Price that
would otherwise (but for the provisions of this Section 4) be in effect, and
(b)
the denominator is the Exercise Price in effect on the date of such
exercise.
5. Certificate
as to Adjustments.
In each
case of any adjustment or readjustment in the shares of Common Stock (or Other
Securities) issuable on the exercise of this Warrant, the Company at its expense
will promptly cause its Chief Financial Officer or other appropriate designee
to
compute such adjustment or readjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment
is
based, including a statement of (a) the consideration received or receivable
by
the Company for any additional shares of Common Stock (or Other Securities)
issued or sold or deemed to have been issued or sold, (b) the number of shares
of Common Stock (or Other Securities) outstanding or deemed to be outstanding,
and (c) the Exercise Price and the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to
the
holder of the Warrant and any Warrant agent of the Company (appointed pursuant
to Section 10 hereof).
6. Reservation
of Stock, Etc., Issuable on Exercise of Warrant.
The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this
Warrant.
7. Assignment;
Exchange of Warrant.
Subject
to compliance with applicable securities laws, this Warrant, and the rights
evidenced hereby, may be transferred by any registered holder hereof (a
“Transferor”) in whole or in part. On the surrender for exchange of this
Warrant, with the Transferor’s endorsement in the form of Exhibit B attached
hereto (the “Transferor Endorsement Form”) and together with evidence reasonably
satisfactory to the Company demonstrating compliance with applicable securities
laws, which shall include, without limitation, the provision of a legal opinion
from the Transferor’s or company counsel that such transfer is exempt from the
registration requirements of applicable securities laws, and with payment by
the
Transferor of any applicable transfer taxes) will issue and deliver to or on
the
order of the Transferor thereof a new Warrant of like tenor, in the name of
the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or
faces
of the Warrant so surrendered by the Transferor.
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8. Replacement
of Warrant.
On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction of this Warrant, on delivery of an indemnity agreement
or
security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this Warrant,
the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
9. Registration
Rights.
The
Holder of this Warrant has been granted certain registration rights by the
Company. These registration rights are set forth in a Registration Rights
Agreement entered into by the Company and Purchaser dated as of even date of
this Warrant.
10. Maximum
Exercise.
Notwithstanding
anything herein to the contrary, in no event shall the Holder be entitled to
exercise any portion of this Warrant in excess of that portion of this Warrant
upon exercise of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of the Warrant or the unexercised or unconverted portion
of
any other security of the Holder subject to a limitation on conversion analogous
to the limitations contained herein) and (2) the number of shares of Common
Stock issuable upon the exercise of the portion of this Warrant with respect
to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its Affiliates of any amount greater
than
4.99% of the then outstanding shares of Common Stock (whether or not, at the
time of such exercise, the Holder and its Affiliates beneficially own more
than
4.99% of the then outstanding shares of Common Stock). For purposes of the
proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act
of
1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such proviso. The Holder may waive the limitations set
forth herein by sixty-one (61) days written notice to the Company and
such limitations shall automatically become null and void upon an Event of
Default under and as defined in the Securities Purchase Agreement dated as
of
the date hereof between CVAS, Iview Digital Video Solutions Inc., Iview Holding
Corp. and the Holder. As used herein, the term "Affiliate" means any person
or entity that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a person or entity,
as such terms are used in and construed under Rule 144 under the Securities
Act.
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11. Warrant
Agent.
The
Company may, by written notice to the each Holder of the Warrant, appoint an
agent for the purpose of issuing Common Stock (or Other Securities) on the
exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant
to Section 7, and replacing this Warrant pursuant to Section 8, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
12. Transfer
on the Company’s Books.
Until
this Warrant is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
13. Notices,
Etc.
All
notices and other communications from the Company to the Holder of this Warrant
shall be mailed by first class registered or certified mail, postage prepaid,
at
such address as may have been furnished to the Company in writing by such Holder
or, until any such Holder furnishes to the Company an address, then to, and
at
the address of, the last Holder of this Warrant who has so furnished an address
to the Company.
14. Miscellaneous.
This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. This Warrant shall
be governed by and construed in accordance with the laws of State of New York
without regard to principles of conflicts of laws. Any action brought concerning
the transactions contemplated by this Warrant shall be brought only in the
state
courts of New York or in the federal courts located in the state of New York;
provided, however, that the Holder may choose to waive this provision and bring
an action outside the state of New York. The Company agrees to submit to the
jurisdiction of such courts and waive trial by jury. The prevailing party shall
be entitled to recover from the other party its reasonable attorneys’ fees and
costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall
not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity
or
enforceability of any other provision hereof. The Company acknowledges that
legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.
[BALANCE
OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE
PAGE FOLLOWS.]
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IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
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CREATIVE
VISTAS, INC.
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WITNESS:
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By:
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/s/
XXXXXXX XXXXX
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Name:
|
Xxxxxxx
Xxxxx
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Title:
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President
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EXHIBIT
A
FORM
OF OPTION EXERCISE NOTICE
(To
Be
Signed Only On Exercise Of Warrant)
TO: Creative
Vistas, Inc.
Attention: Chief
Financial Officer
The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase ________ shares of the Common
Stock covered by such Warrant:
The
undersigned requests that the certificates for such shares be issued in the
name
of, and delivered to ______________________________________________ whose
address is
___________________________________________________________________________.
The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within the Warrant shall be
made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the “Securities Act”) or pursuant to an exemption from registration
under the Securities Act.
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Dated:
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(Signature
must conform to name of holder as specified on the face of the
Warrant)
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Address:
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A-1
EXHIBIT
B
FORM
OF TRANSFEROR ENDORSEMENT
(To
Be
Signed Only On Transfer Of Warrant)
For
value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees” the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of Creative Vistas, Inc. into which the within Warrant relates specified
under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of Creative
Vistas, Inc. with full power of substitution in the premises.
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Transferees
|
Address
|
Percentage
Transferred
|
Number
Transferred
|
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|
Dated:
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|
(Signature
must conform to name of holder as specified on the face of the
Warrant)
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|
Address:
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SIGNED
IN THE PRESENCE OF:
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(Name)
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ACCEPTED
AND AGREED:
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[TRANSFEREE]
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(Name)
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B-1
