WARRANT No. W CSR-1
EXHIBIT 4.11
WARRANT No. W CSR-1
Viseon, Inc.
(Formerly RSI Systems, Inc.)
Dated as of August 31, 2005
THIS WARRANT AND ANY SECURITIES THAT MAY BE ACQUIRED UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN STRICT
COMPLIANCE WITH THE TERMS AND CONDITIONS SPECIFIED IN THIS WARRANT.
Viseon, Inc.
(Formerly RSI Systems, Inc.)
Void on August 30, 2009
| Common Stock Warrant | Las Vegas, Nevada | |
| No. W-CSR-1 | August 31, 2005 |
VISEON, INC. f/k/a RSI SYSTEMS, INC.,(the “Company”), a Nevada corporation, for
value received, hereby certifies that XXXX X. XXXXXXXX AND XXXXXXX X. XXXXXXXX, TRUSTEES, AND ANY
SUCCESSOR TRUSTEE(S), OF THE XXXX X. XXXXXXXX REVOCABLE TRUST U/A DTD 10-22-93 or registered
assigns (the “Holder”), is entitled to purchase from the Company up to SIX HUNDRED THOUSAND
(600,000)(the “Warrant Quantity”) shares of duly authorized, validly issued, fully paid
and nonassessable common stock of the Company, par value $0.01 per share, (the “Common Stock”) at
the purchase price of ONE DOLLAR AND TWENTY-SIX CENTS ($1.26) (the “Warrant Price”) per share, at
any time or from time to time prior to 5:00 p.m. Central Standard time, on August 30, 2009 (the
“Expiration Date”), all subject to the terms, conditions and adjustments set forth below in this
Warrant.
This Warrant is the Warrant (the “Warrant”, such term to include any such warrants issued in
substitution therefor) originally issued in connection with the Settlement and Release Agreement,
dated of even date herewith, by and among the Company and the Holder (as amended or otherwise
modified from time to time, the “Settlement Agreement”). The Warrant originally so issued
evidences the right to purchase a number of shares of Common Stock equal to the Warrant Quantity,
subject to adjustment as provided herein. Certain capitalized terms used in this Warrant are
defined in Section 10; references to an “Exhibit” are, unless otherwise specified, to one of the
Exhibits attached to this Warrant and references to a “Section” are, unless otherwise specified, to
one of the Sections of this Warrant.
1. Exercise of Warrant.
1.1 Manner of Exercise. This Warrant may be exercised by the Holder, in whole or in
part, during normal business hours on any Business Day, by surrender of this Warrant to the Company
at its principal office, accompanied by the Form of Subscription in substantially the form attached
as Exhibit A to this Warrant (or a reasonable facsimile thereof) duly executed by the Holder and
accompanied by payment, in cash, by wire transfer, certified or official bank check payable to the
order of the Company, (or by any combination of such methods), in the amount obtained by
multiplying (a) the number of shares of Common Stock (adjusted as provided in Sections 2 through 4)
designated in such Form of Subscription by (b) the Warrant Price, and such Holder shall thereupon
be entitled to receive such number of duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock (or Other Securities).
Warrant No. W-1 - Page 1
1.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the Business Day on which this Warrant
shall have been surrendered to the Company as provided in Section 1.1. At such time the Person or
Persons in whose name or names any certificate or certificates for shares of Common Stock (or Other
Securities) shall be issuable upon such exercise, as provided in Section 1.3, shall be deemed to
have become the Holder or holders of record thereof.
1.3 Delivery of Stock Certificates, etc. As soon as practicable after each exercise
of this Warrant, in whole or in part, and in any event within ten Business Days thereafter, the
Company at its expense (including the payment by it of any applicable transfer taxes) will cause to
be issued in the name of and delivered to the Holder hereof or, subject to Section 9, as such
Holder (upon payment by such Holder of any applicable transfer taxes) may direct,
(a) a certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares, including, if the Company so elects, fractional shares,
of Common Stock (or Other Securities) to which such Holder shall be entitled upon such
exercise plus, at the discretion of the Company, in lieu of any fractional share to which
such Holder would otherwise be entitled, cash in an amount equal to the same fraction of the
Closing Price per share on the Business Day next preceding the date of such exercise, and
(b) in case such exercise is in part only, a new Warrant or Warrants of like tenor,
calling in the aggregate on the face or faces thereof for the number of shares of Common
Stock equal (without giving effect to any adjustment thereof) to the number of such shares
called for on the face of this Warrant minus the number of such shares designated by the
Holder upon such exercise as provided in Section 1.1.
In lieu of physical delivery of the shares being issued upon exercise, provided that the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities
Transfer (FAST) program, upon request of the Holder and in compliance with the provisions hereof,
the Company shall use its reasonable efforts to cause its transfer agent to electronically transmit
the shares being issued to the Holder by crediting the account of the Holder’s Prime Broker with
DTC through its Deposit Withdrawal Agent Commission system. The time period for delivery described
herein shall apply to the electronic transmittals described herein.
1.4 Company to Reaffirm Obligations. The Company will, at the time of each exercise
of this Warrant, upon the request of the Holder, acknowledge in writing its continuing obligation
to afford to such Holder all rights (including, without limitation, any rights to registration of
the shares of Common Stock or Other Securities issued upon such exercise) to which such Holder
shall continue to be entitled after such exercise in accordance with the terms of this Warrant,
provided that if the Holder shall fail to make any such request, such failure shall not
affect the continuing obligation of the Company to afford such rights to such Holder.
1.5 Payment by Application of Shares Otherwise Issuable. Upon any exercise of this
Warrant, the Holder may, at its option, instruct the Company, by written notice accompanying the
surrender of this Warrant at the time of such exercise, to apply to the payment
Warrant No. W-CSR-1 - Page 2
required by Section 1.1 such number of the shares of Common Stock otherwise issuable to such
Holder upon such exercise as shall be specified in such notice, in which case an amount equal
to the excess of the aggregate Closing Price of such specified number of shares on the date of
exercise over the portion of the payment required by Section 1.1 attributable to such shares shall
be deemed to have been paid to the Company and the number of shares issuable upon such exercise
shall be reduced by such specified number.
1.6 Tax Basis. The Company and the Holder shall mutually agree as to the tax basis of
this Warrant for purposes of the Internal Revenue Code of 1986, as amended (the “Code”), and the
treatment of this Warrant under the Code by each of the Company and the Holder shall be consistent
with such agreement.
2. Adjustment of Common Stock Issuable Upon Exercise.
2.1 General; Warrant Quantity. This Warrant initially evidences the right to purchase
a number of shares of Common Stock equal to the Warrant Quantity at the Warrant Price, each subject
to adjustment as provided in this Section 2 and in Section 3. The initial “Warrant Price” shall be
fixed at One Dollar Twenty-Six Cents ($1.26) per share of Common Stock to be issued upon exercise
of this Warrant.
2.2 Extraordinary Dividends and Distributions. In the event that the Company at any
time or from time to time after the date hereof shall declare, order, pay or make a dividend or
other distribution (including, without limitation, any distribution of other or additional stock or
other securities or property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Stock other than (a) a dividend
payable in Common Stock or (b) a regularly scheduled cash dividend payable out of consolidated
earnings or earned surplus, determined in accordance with generally accepted accounting principles,
then, in each such case, subject to Section 2.6, the Warrant Quantity in effect immediately prior
to the close of business on the record date fixed for the determination of holders of any class of
securities entitled to receive such dividend or distribution shall be increased, effective as of
the close of business on such record date, to an amount determined by multiplying such Warrant
Quantity by a fraction
(x) the numerator of which shall be the Current Market Price in effect on such record
date or, if the Common Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading, and
(y) the denominator of which shall be such Current Market Price, less the amount of
such dividend or distribution (as determined in good faith by the Board of Directors of the
Company) applicable to one share of Common Stock,
provided that, in the event that the amount of such dividend as so determined is equal to or
greater than 10% of such Current Market Price or in the event that such fraction is greater than
10/9, in lieu of the foregoing adjustment, adequate provision shall be made so that the Holder of
this Warrant shall receive a pro rata share of such dividend based upon the maximum number of
shares of Common Stock at the time issuable to such Holder.
Warrant No. W-CSR-1 - Page 3
2.3 Treatment of Stock Dividends, Stock Splits, etc. In the event that the Company
shall pay a dividend on the Common Stock in shares of Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of shares of
Common Stock (by reclassification or otherwise than by payment of a dividend in Common Stock), the
Warrant Price in effect immediately prior to such subdivision or at the record date of such
dividend shall, simultaneously with the effectiveness of such subdivision or immediately after the
record date of such dividend be proportionately reduced. In the event that the Company shall
combine outstanding shares of Common Stock into a smaller number of shares of Common Stock (by
reverse split, roll-up, reclassification or otherwise), the Warrant Price in effect immediately
prior to such combination shall, simultaneously with the effectiveness of such combination, be
proportionately increased. Upon any required adjustment in the Warrant Price, the Warrant Quantity
shall be simultaneously changed to the number determined by dividing (a) the product derived by
multiplying the Warrant Quantity immediately prior to such adjustment by the Warrant Price in
effect immediately prior to such adjustment by (b) the Warrant Price in effect immediately after
such adjustment.
2.4 Computation of Consideration. For the purposes of this Section 2,
(a) the consideration for the issue or sale of any additional shares of Common Stock
shall, irrespective of the accounting treatment of such consideration,
(i) insofar as it consists of cash, be computed at the net amount of cash
received by the Company, without deducting any expenses paid or incurred by the
Company or any commissions or compensations paid or concessions or discounts allowed
to underwriters, dealers or others performing similar services in connection with
such issue or sale,
(ii) insofar as it consists of property (including securities) other than cash,
be computed at the fair value thereof at the time of such issue or sale, as
determined in good faith by the Board of Directors of the Company, and
(iii) in case additional shares of Common Stock are issued or sold together
with other stock or securities or other assets of the Company for a consideration
which covers both, be the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such additional shares of
Common Stock, all as determined in good faith by the Board of Directors of the
Company;
(b) additional shares of Common Stock deemed to have been issued pursuant to Section
2.2, relating to stock dividends, stock splits, etc., shall be deemed to have been issued
for no consideration.
2.5 Minimum Adjustment of Warrant Quantity. If the amount of any adjustment of the
Warrant Quantity required pursuant to this Section 2 would be less than one tenth (1/10) of one
percent (1%) of the Warrant Quantity in effect at the time such adjustment is otherwise so required
to be made, such amount shall be carried forward and adjustment with respect thereto made at the
time of and together with any subsequent adjustment which, together with such
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amount and any other
amount or amounts so carried forward, shall aggregate at least one tenth (1/10) of one percent (1%)
of such Warrant Quantity. All calculations under this Warrant shall be made to the nearest
one-hundredth of a share.
2.6 Abandoned Dividend or Distribution. If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a dividend or other
distribution (which results in an adjustment to the Warrant Quantity under the terms of this
Warrant) and shall, thereafter, and before such dividend or distribution is paid or delivered to
shareholders entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity by reason of the taking of such
record shall be reversed, and any subsequent adjustments, based thereon, shall be recomputed.
3. Consolidation, Merger, etc.
3.1 Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc. In
the event that the Company after the date hereof (a) shall consolidate with or merge into any other
Person and shall not be the continuing or surviving corporation of such consolidation or merger, or
(b) shall permit any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such consolidation or merger,
the Common Stock or Other Securities shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (c) shall transfer all or
substantially all of its properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities (other than a capital
reorganization or reclassification resulting in the issue of additional shares of Common Stock for
which adjustment in the Warrant Quantity is provided in Section 2, Paragraph 2.1), then, and in the
case of each such transaction, proper provision shall be made so that, upon the basis and the terms
and in the manner provided in this Warrant, the Holder, upon the exercise hereof at any time after
the consummation of such transaction, shall be entitled to receive (at the Warrant Price), in lieu
of the Common Stock or Other Securities issuable upon such exercise prior to such consummation, the
highest amount of securities, cash or other property to which such Holder would actually have been
entitled as a shareholder upon such consummation if such Holder had exercised the rights
represented by this Warrant immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for in Sections 2
through 4, provided that if a purchase, tender or exchange offer shall have been made to and
accepted by the holders of more than 50% of the outstanding shares of Common Stock, and if the
Holder so designates in a notice given to the Company on or before the date immediately preceding
the date of the consummation of such transaction, the Holder shall be entitled to receive the
highest amount of securities, cash or other property to which such Holder would actually have been
entitled as a shareholder if the Holder had exercised this Warrant prior to the expiration of such
purchase, tender or exchange offer and accepted such offer, subject to adjustments (from and after
the consummation of such purchase, tender or exchange offer) as nearly equivalent as possible to
the adjustments provided for in Sections 2 through 4.
3.2 Assumption of Obligations. Notwithstanding anything contained in this Warrant to
the contrary, the Company will not effect any of the transactions described in clauses (a) through
(d) of Section 3.1 unless, prior to the consummation thereof, each Person (other than the
Warrant No. W-CSR-1 - Page 5
Company) which may be required to deliver any stock, securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder, (a) the obligations of the Company under this Warrant (and if the
Company shall survive the consummation of such transaction, such assumption shall
be in addition to, and shall not release the Company from, any continuing obligations of the
Company under this Warrant), (b) the obligations of the Company under the Registration Rights
Agreement, and (c) the obligation to deliver to such Holder such shares of stock, securities, cash
or property as, in accordance with the foregoing provisions of this Section 3, such Holder may be
entitled to receive, and such Person shall have similarly delivered to such Holder an opinion of
counsel for such Person, which counsel shall be reasonably satisfactory to such Holder, stating
that this Warrant shall thereafter continue in full force and effect and the terms hereof
(including, without limitation, all of the provisions of this Section 3) shall be applicable to the
stock, securities, cash or property which such Person may be required to deliver upon any exercise
of this Warrant or the exercise of any rights pursuant hereto.
4. No Dilution or Impairment. The Company will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (a) shall not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to exceed the amount
payable therefor upon such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of stock, free from all taxes, liens, security interests, encumbrances, preemptive rights
and charges on the exercise of the Warrants from time to time outstanding and (c) will not take any
action which results in any adjustment of the Warrant Quantity if the total number of shares of
Common Stock (or Other Securities) issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock (or Other Securities) then
authorized by the Company’s certificate of incorporation and available for the purpose of issue
upon such exercise.
5. Accountants’ Report as to Adjustments. In each case of any adjustment or readjustment
in the shares of Common Stock (or Other Securities) issuable upon the exercise of this Warrant, the
Company at its expense will promptly compute such adjustment or readjustment in accordance with the
terms of this Warrant and cause independent certified public accountants of recognized national
standing (which may be the regular auditors of the Company) selected by the Company to verify such
computation (other than any computation of the fair value of property as determined in good faith
by the Board of Directors of the Company) and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof and the facts upon
which such adjustment or readjustment is based, including a statement of (a) the consideration
received or to be received by the Company for any additional shares of Common Stock issued or sold
or deemed to have been issued, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Warrant Quantity in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 2) on account thereof. The Company will forthwith
mail a copy of each
Warrant No. W-CSR-1 - Page 6
such report to each Holder of a Warrant and will, upon the written request at
any time of any Holder of a Warrant, furnish to such Holder a like report setting forth the Warrant
Quantity at the time in effect and showing in reasonable detail how it was calculated. The Company
will also keep copies of all such reports at its principal office and will cause the same to be
available for inspection at such office during normal business hours by any Holder of a Warrant or any
prospective purchaser of a Warrant designated by the Holder thereof.
6. Financial and Business Information
6.1 Filings. During any period when the Company is a Public Company, the Company will
file on or before the required date all required regular or periodic reports (pursuant to the
Exchange Act) with the Commission and will deliver to the Holder promptly upon their becoming
available one copy of each report, notice or proxy statement sent by the Company to its
stockholders generally, and of each regular or periodic report (pursuant to the Exchange Act) and
any registration statement, prospectus or written communication (other than transmittal letters)
(pursuant to the Securities Act), filed by the Company with (i) the Commission or (ii) any
securities exchange on which shares of Common Stock are listed.
6.2 Notices of Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any dividend
(other than a regular periodic dividend payable in cash out of earned surplus in an amount
not exceeding the amount of the immediately preceding cash dividend for such period) or
other distribution, or any right to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any consolidation or merger involving the Company and
any other Person, any transaction or series of transactions in which more than 50% of the
Voting Securities of the Company are transferred to another Person or any transfer, sale or
other disposition of all or substantially all the assets of the Company to any other Person,
or
(c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company,
The Company will mail to the Holder a notice specifying (i) the date or expected date on which any
such record is to be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right, and (ii) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place and the time, if any such time is to be
fixed, as of which the holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization, consolidation,
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merger,
transfer, dissolution, sale, disposition, liquidation or winding-up. Such notice shall be mailed
at least 45 days prior to the date therein specified.
7. Restrictions on Transfer.
7.1 Restrictive Legends. Except as otherwise permitted by this Section 7, each
Warrant (including each Warrant issued upon the transfer of any Warrant) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
“THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW
OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THIS WARRANT.”
Except as otherwise permitted by this Section 7, unless a registration statement concerning the
shares of Common Stock underlying this Warrant has been declared effective by the Securities and
Exchange Commission and is then currently in effect, each certificate for Common Stock (or Other
Securities) issued upon the exercise of any Warrant, and each certificate issued upon the transfer
of any such Common Stock (or Other Securities), shall be stamped or otherwise imprinted with a
legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND
SUCH LAWS. ”
7.2 Transfer to Comply With the Securities Act. Restricted Securities may not be
sold, assigned, pledged, hypothecated, encumbered or in any manner transferred or disposed of, in
whole or in part, except in compliance with the provisions of the Securities Act and state
securities or Blue Sky laws and the terms and conditions hereof.
7.3 Termination of Restrictions. The restrictions imposed by this Section 7 on the
transferability of Restricted Securities shall cease and terminate as to any particular Restricted
Securities (a) when a registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) when such securities are sold pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, or (c) when, in the opinion of
both counsel for the Holder and counsel for the Company, such restrictions are no longer required
or necessary in order to protect the Company against a violation of the Securities Act upon any
sale or other disposition of such securities without registration thereunder. Whenever such
restrictions shall cease and terminate as to any Restricted Securities, the Holder shall be
entitled to receive from the Company, without expense, new securities of like tenor not bearing the
applicable legends required by Section 7.1.
Warrant No. W-CSR-1 - Page 8
8. Reservation of Stock, etc. The Company shall at all times reserve and keep available,
solely for issuance and delivery upon exercise of the Warrants, the number of shares of Common
Stock (or Other Securities) from time to time issuable upon exercise of all Warrants at the time
outstanding. All shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be validly issued and,
in the case of shares, fully paid and nonassessable with no liability on the part of the holders
thereof, and, in the case of all securities, shall be free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges. The transfer agent for the Common Stock,
which may be the Company (“Transfer Agent”), and every subsequent Transfer Agent for any shares of
the Company’s capital stock issuable upon the exercise of any of the purchase rights represented by
this Warrant, are hereby irrevocably authorized and directed at all times until the Expiration Date
to reserve such number of authorized and unissued shares as shall be requisite for such purpose.
The Company shall keep copies of this Warrant on file with the Transfer Agent for the Common Stock
and with every subsequent Transfer Agent for any shares of the Company’s capital stock issuable
upon the exercise of the rights of purchase represented by this Warrant. The Company shall supply
such Transfer Agent with duly executed stock certificates for such purpose. All Warrant
certificates surrendered upon the exercise of the rights thereby evidenced shall be canceled, and
such canceled Warrants shall constitute sufficient evidence of the number of shares of stock that
have been issued upon the exercise of such Warrants. Subsequent to the Expiration Date, no shares
of stock need be reserved in respect of any unexercised Warrant.
9. Registration and Transfer of Warrants, etc.
9.1 Warrant Register; Ownership of Warrants. Each Warrant issued by the Company shall
be numbered and shall be registered in a warrant register (the “Warrant Register”) as it is issued
and transferred, which Warrant Register shall be maintained by the Company at its principal office
or, at the Company’s election and expense, by a Warrant Agent or the Company’s transfer agent. The
Company shall be entitled to treat the registered Holder of any Warrant on the Warrant Register 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
affected by any notice to the contrary, except that, if and when any Warrant is properly assigned
in blank, the Company may (but shall not be obligated to) treat the bearer thereof as the owner of
such Warrant for all purposes. Subject to Section 7, a Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first having been issued.
9.2 Transfer of Warrants. Subject to compliance with Section 7, if applicable, this
Warrant and all rights hereunder are transferable in whole or in part, without charge to the Holder
hereof, upon surrender of this Warrant with a properly executed Form of Assignment attached hereto
as Exhibit B at the principal office of the Company. Upon any partial transfer, the Company shall
at its expense issue and deliver to the Holder a new Warrant of like tenor, in the name of the
Holder, which shall be exercisable for such number of shares of Common Stock with respect to which
rights under this Warrant were not so transferred.
9.3 Replacement of Warrants. On receipt by the Company 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
Warrant No. W-CSR-1 - Page 9
reasonably satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office and cancellation
thereof, the Company at its expense shall execute and deliver, in lieu thereof, a new Warrant of
like tenor.
9.4 Adjustments to Warrant Quantity. Notwithstanding any adjustment in the number or
kind of shares of Common Stock or other securities purchasable upon exercise of this Warrant, any
Warrant theretofore or thereafter issued may continue to express the same number and kind of shares
of Common Stock as are stated in this Warrant, as initially issued.
9.5 Fractional Shares. Notwithstanding any adjustment pursuant to Section 2 in the
number of shares of Common Stock covered by this Warrant or any other provision of this Warrant,
the Company may, but shall not be required to, issue fractions of shares upon exercise of this
Warrant or to distribute certificates which evidence fractional shares. In lieu of fractional
shares, the Company shall make payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction multiplied by the Closing Price of a
share of Common Stock on the date of Warrant exercise.
10. Definitions. As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
Affiliate: Any person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the applicable person.
For purposes of this definition, “control” has the meaning specified in Rule 12b-2 under the
Exchange Act.
Business Day: Any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in the City of Nevada are authorized by law to be closed. Any reference to
“days” (unless Business Days are specified) shall mean calendar days.
Closing Price: For any day, shall be (i) the last reported sales price regular way of
the Common Stock on such day on the principal securities exchange on which the Common Stock is then
listed or admitted to trading or on Nasdaq, as applicable, (ii) if no sale takes place on such day
on any such securities exchange or system, the average of the closing bid and asked prices, regular
way, on such day for the Common Stock as officially quoted on any such securities exchange or
system, (iii) if on such day such shares of Common Stock are not then listed or admitted to trading
on any securities exchange or system, the last reported sale price, regular way, on such day for
the Common Stock, (iv)or if no sale takes place on such day the average of the comparative bid and
asked prices quoted for the Common Stock in the National Association of Securities Dealers, Inc.
Automated Quotation (“NASDAQ”) System as of 4:00 P.M., New York City time on such day, or if such
shares shall not be quoted in the NASDAQ System, the average of the high and low bid and asked
price of the Common Stock on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any other successor organization. If at any time such
shares of Common Stock are not listed on any domestic exchange or quoted in the NASDAQ System or
the domestic over-the-counter market, the Closing Price shall be the fair market value thereof
determined by the Board of Directors of the Company in good faith.
Warrant No. W-CSR-1 - Page 10
Code: As defined in Section 1.5.
Commission: The Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act.
Common Stock: As defined in the introduction to this Warrant, such term to include
any stock into which such Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or classes (however
designated) of the Company the holders of which have the right, without limitation as to amount,
either to all or to a share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.
Company: As defined in the introduction to this Warrant, such term to include any
corporation, which shall succeed to or assume the obligations of the Company hereunder.
Exchange Act: The Securities Exchange Act of 1934, or any similar federal statute,
and the rules and regulations of the Commission thereunder, all as the same shall be in effect at
the time.
Expiration Date: As defined in the introduction to this Warrant.
Holder: As defined in the introduction to this Warrant.
NASD: The National Association of Securities Dealers, Inc.
Other Securities: Any stock (other than Common Stock) and other securities of the
Company or any other Person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the Warrants, 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 2 or
otherwise.
Public Company: A company required to file periodic reports under the Exchange Act.
Settlement Agreement: The Settlement and Release Agreement by and between the Company
and the initial holder of this Warrant.
Person: An individual, firm, partnership, corporation, professional corporation,
trust, joint venture, association, joint stock company, limited liability company, unincorporated
organization or any other entity or organization, including a government or agency or political
subdivision thereof, and shall include any successor (by merger or otherwise) of such entity.
Restricted Securities: (a) any Warrants bearing the applicable legend set forth in
Section 7.1, (b) any shares of Common Stock (or Other Securities) issued or issuable upon the
exercise of Warrants which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such Section, and (c) any shares of Common Stock (or Other Securities) issued
subsequent to the exercise of any of the Warrants as a dividend or other distribution with
Warrant No. W-CSR-1 - Page 11
respect to, or resulting from a subdivision of the outstanding shares of Common Stock (or other Securities)
into a greater number of shares by reclassification, stock splits or otherwise, or in exchange for
or in replacement of the Common Stock (or Other Securities) issued upon such exercise, which are
evidenced by a certificate or certificates bearing the applicable legend set forth in such Section.
Securities Act: The Securities Act of 1933, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.
Trading Day: A day on which the securities exchange, association, or quotation system
on which shares of Common Stock are listed for trading shall be open for business or, if the shares
of Common Stock shall not be listed on such exchange, association, or quotation system for such
day, a day with respect to which trades in the United States domestic over the counter market shall
be reported.
Warrant: As defined in the introduction to this Warrant.
Warrant Price: As defined in the first paragraph of this Warrant.
Warrant Shares: As defined in the first paragraph of this Warrant.
11. Remedies; Specific Performance. The Company stipulates that there would be no adequate
remedy at law to the Holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this Warrant and
accordingly, the Company agrees that, in addition to any other remedy to which the Holder may be
entitled at law or in equity, the Holder shall be entitled to seek to compel specific performance
of the obligations of the Company under this Warrant, without the posting of any bond, in
accordance with the terms and conditions of this Warrant in any court of the United States or any
State thereof having jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Warrant, the Company shall not raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by the Holder hereto in
exercising any right or remedy accruing upon any such breach shall not impair the right or remedy
or constitute a waiver of or acquiescence in any such breach. No remedy shall be exclusive of any
other remedy. All available remedies shall be cumulative.
12. No Rights or Liabilities as Shareholder. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof any rights as a shareholder of the Company in regard
to shares issuable upon exercise of this Warrant, but not yet issued or as imposing any obligation
on the Holder to purchase any securities or as imposing any liabilities on the Holder as a
shareholder of the Company, whether such obligation or liabilities are asserted by the Company or
by creditors of the Company.
13. Notices. All notices, requests, demands, waivers, consents and other communications
required or permitted to be given hereunder shall be (a) in writing; (b) delivered either in
person, by facsimile transmission, by telegraphic or other electronic means, by overnight air
courier guaranteeing next day delivery or by certified, registered or express mail, in each such
case with all costs, fees, charges and/or postage prepaid and (c) directed to each respective party
at the
Warrant No. W-CSR-1 - Page 12
following addresses (or at such other address as shall have been previously given in writing
in accordance with the terms hereof by any party hereto):
If to Holder:
Xxxx X. Xxxxxxxx and Xxxxxxx X. Xxxxxxxx, Trustees
c/o Xxxx X. Xxxxxxxx
Po Box 246
Anoka, Minnesota 55303.
c/o Xxxx X. Xxxxxxxx
Po Box 246
Anoka, Minnesota 55303.
With a copy to:
__________________________
__________________________
__________________________
__________________________
Facsimile: __________________
__________________________
__________________________
__________________________
Facsimile: __________________
If to Viseon:
Viseon, Inc.
Attention: President
000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: President
000 X. Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
With a copy to:
Xxxxxx X. Xxxxx, Xx.
Law Offices of Xxxxxx X. Xxxxx, Xx.
00000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Law Offices of Xxxxxx X. Xxxxx, Xx.
00000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Any party may be given notice in accordance with this Section by any other party at another
address or by delivery to another person designated for receipt of notices, if such party so
designates such other person or address in writing in accordance with this Section 13. The Company
shall give Notice to any subsequent Holder at such address as it appears in the Warrant Register.
All notices shall be deemed to have been served, duly given and become effective: (a) immediately
upon receipt if delivered by hand, ground courier or personal delivery on any business day prior to
5:00 p.m., local time or on the next succeeding Business Day if delivered on a non-business day or
after 5:00 p.m., local time; (b) four (4) hours from the time of transmission with confirmed
receipt at its destination on any business day prior to 5:00 p.m., local time if delivered by
facsimile, telex, telecopy or other telegraphic or electronic means or on the next succeeding
Business Day if receipt at its destination is on a non-business day or after 5:00 p.m., local time
subject to verification by the sender of the transmission report confirming receipt; (c) one
Business Day after having been timely delivered to an air courier for guaranteed overnight delivery
or (d) five Business Days after having been deposited with the United States Postal
Warrant No. W-CSR-1 - Page 13
Service as
certified or registered mail, return receipt requested., provided that the exercise of any Warrant
shall be effective in the manner provided in Section 1 hereinabove.
14. Amendments. This Warrant and any term hereof may not be amended, modified,
supplemented or terminated, and waivers or consents to departures from the provisions hereof may
not be given, except by written instrument duly executed by the party against which
enforcement of such amendment, modification, supplement, termination or consent to departure is
sought.
15. Descriptive Headings, Etc. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning of terms contained herein.
Unless the context of this Warrant otherwise requires: (1) words of any gender shall be deemed to
include each other gender; (2) words using the singular or plural number shall also include the
plural or singular number, respectively; (3) the words “hereof”, “herein” and “hereunder” and words
of similar import when used in this Warrant shall refer to this Warrant as a whole and not to any
particular provision of this Warrant, and Section and paragraph references are to the Sections and
paragraphs of this Warrant unless otherwise specified; (4) the word “including” and words of
similar import when used in this Warrant shall mean “including, without limitation,” unless
otherwise specified; (5) “or” is not exclusive; and (6) provisions apply to successive events and
transactions.
16. Law Governing Agreement. THIS WARRANT SHALL BE INTERPRETED, CONSTRUED AND
ENFORCED AND ITS CONSTRUCTION AND PERFORMANCE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEVADA
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT FEDERAL LAW MAY APPLY.
17. Waiver of Jury Trial.EACH PARTY HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION,
SUIT OR OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY RELATING TO THIS WARRANT
(INCLUDING ANY AMENDMENTS OR SUBSTITUTIONS HEREOF), OR ANY OF THE TRANSACTIONS CONTEMPLATED BY OR
RELATED TO THIS AGREEMENT OR ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR
ANY OF THEM) WITH RESPECT TO THIS WARRANT, INCLUDING ANY AMENDMENTS OR SUBSTITUTIONS, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR
OTHER PROCEEDING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION, SUIT OR OTHER
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND THAT EITHER PARTY MAY FILE A COPY
OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE STIPULATION AND CONSENT OF THE OTHER TO
THE WAIVER OF ANY RIGHT IT OR THEY MIGHT OTHERWISE HAVE TO A TRIAL BY JURY .
Warrant No. W-CSR-1 - Page 14
Viseon, Inc.
(Formerly RSI Systems, Inc.)
By: Xxxx Xxxxxx
Its: Chief Executive Officer
Its: Chief Executive Officer
Warrant No. W-CSR-1 - Page 15
Exhibit A
FORM OF SUBSCRIPTION
[To be executed only upon exercise of Warrant]
To: VISEON, INC. f/k/a RSI Systems, Inc.
The undersigned registered holder of the within Warrant, being Viseon, Inc, common stock purchase
Warrant No. W-CSR-1, hereby irrevocably exercises such Warrant for, and purchases thereunder,
( )1
shares of Common stock of VISEON,
INC. f/k/a RSI SYSTEMS, INC. and herewith makes payment in the amount of
($ )2 therefor,
and requests that the certificates for such shares be issued in the name of, and delivered to
,
whose address is
Dated:
|
||||||
| (Signature must conform in all respects to the name of holder as specified on the face of Warrant) |
||||||
| (Street Address) | ||||||
| (City) (State) Zip Code) |
| 1 | Insert the number of shares called for on the face of this Warrant (or, in the case of a partial exercise, the portion thereof as to which this Warrant is being exercised), in either case, without making any adjustment for additional shares of Common Stock or any other securities or property or cash which, pursuant to the adjustment provisions of this Warrant, may be delivered upon exercise. In the case of partial exercise, a new Warrant, representing the unexercised portion of the Warrant, will be issued and delivered to the holder surrendering the Warrant. | |
| 2 | In the event that a cashless exercise of this Warrant is available at the time of exercise, to the extent a requesting a cashless exercise, print the word “cashless” in addition to or in place of any dollar amount. |
Exhibit B
FORM OF ASSIGNMENT
[To be executed only upon assignment of Warrant]
For value received, the undersigned registered holder of the within Warrant, being Viseon, Inc,
common stock purchase Warrant No. W-CSR-1, hereby sells, assigns and transfers unto
the right represented by such Warrant to purchase
shares of Common Stock of VISEON, INC. f/k/a RSI
Systems, Inc. to which such Warrant relates, and appoints ,
Attorney to make such transfer on the books of VISEON, INC. f/k/a RSI Systems, Inc. maintained for
such purpose, with full power of substitution in the premises.
Dated: |
||||||
| (Signature must conform in all respects to the name of holder as specified on the face of Warrant) |
||||||
| (Street Address) | ||||||
| (City) (State) Zip Code) | ||||||
| Signed in the presence of: | ||||||
| (Printed name) | ||||||
