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EXHIBIT 10.19
PROMISSORY NOTE RESTRUCTURING AGREEMENT
This Promissory Note Restructuring Agreement (this "Agreement") is made
and entered into as of the 21st day of April 1999, by and between VSI
Enterprises, Inc., a Delaware corporation (the "Company"), and Thomson Kernaghan
& Co., Ltd. ("TKC"). The Company and TKC are sometimes each referred to herein
as a "Party" and collectively, as the "Parties".
WITNESSETH:
WHEREAS, the Company is the "maker" of that certain promissory note,
dated November 16, 1998, in the original principal amount of $900,000, and with
TKC as "payee" (the "Note"); and
WHEREAS, the Company is currently undertaking a capital restructuring,
and TKC is willing to participate in such restructuring on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
TERMS AND COVENANTS OF THE DEBT RESTRUCTURING
1.1 Modification and Cancellation of Note. All interest on the
Note shall cease to accrue as of the Closing Date (as defined in Article 2
below) and all penalties on the Note shall cease to accrue as of March 15, 1999.
At the Closing (as defined below), the Note shall be canceled and TKC shall
deliver the original Note to the Company.
1.2 Payment of Cash. At the Closing, the Company shall pay to TKC
$150,000 by wire transfer or other immediately available funds (the "Cash
Payment").
1.3 Issuance of Common Stock. At the Closing, the Company shall
issue to TKC the number of shares (the "Shares") of common stock of the Company,
par value $.00025 per share (the "Common Stock"), equal to the sum of
$857,247.00 plus the accrued but unpaid interest on the Note from April 1, 1999
through the Closing Date (as defined below) divided by the average closing price
of the Common Stock on the Nasdaq Small Capital Market, or if not traded on such
Market, on any other market on which the Common Stock is then trading (the
"Market"), for the ten (10) trading days immediately prior to the Closing Date;
provided, however, that in no event shall the denominator in the above
calculation be less than $.67 per share.
1.4 Issuance of Warrants. At the Closing, the Company shall issue
to TKC:
(a) a warrant to purchase, at a price of $1.00 per share, the
number of shares of Common Stock equal to the product of the
unpaid principal and accrued but unpaid interest on the Note
as of the Closing Date (less the $150,000 payment provided in
Section 1.2 above) divided by $4.00, which warrant shall be
substantially in the form of Exhibit A attached hereto (the
"First Warrant").
(b) a warrant to purchase, at a price of $1.50 per share, the
number of shares of Common Stock equal to the product of the
unpaid principal and accrued but unpaid interest on the Note
as of the Closing Date (less the $150,000 payment provided in
Section 1.2 above) divided by $12.00, which warrant shall be
substantially in the form of Exhibit B attached hereto (the
"Second Warrant").
The First Warrant and the Second Warrant are sometimes collectively referred to
herein as the "Warrants".
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1.5 Registration of Securities. On or prior to the Closing Date,
the Company shall file a registration statement (the "Registration Statement")
with the Securities and Exchange Commission (the "SEC") with respect to the
resale by TKC of the Shares and the shares of Common Stock underlying the
Warrants (the "Underlying Shares")(the Shares and Underlying Shares are
sometimes collectively referred to herein as the "Registrable Securities"). The
Company shall cause the Registration Statement to become effective as soon as
possible after the Closing Date (but in no event later than ninety (90) days
following the Closing Date); provided, however, that such period may be delayed
in order to receive necessary regulatory approval. If the Company fails to cause
the Registration Statement to become effective within the period described in
the preceding sentence (the "Registration Deadline"), and if after the
Registration Deadline but prior to the Registration Statement becoming effective
the closing price of the Common Stock on five (5) consecutive trading days on
the Market is at least $1.25 per share, then TKC may, by written notice, require
the Company to repurchase the Shares at a purchase price equal to the average
closing price of the Common Stock for such five (5) day period. Any such
repurchase shall be closed within thirty (30) days following the date of such
written notice.
1.6 Limits on Sale of Registrable Securities. Notwithstanding
anything contained in Section 1.5, TKC hereby agrees that (i) for the period of
one year following the Closing Date, TKC will not sell, assign, transfer or
otherwise dispose of or hypothecate any of the Registrable Securities (the
"Holding Period"); and (ii) following the expiration of the Holding Period, TKC
will not sell more than ten percent (10%) of the Registrable Securities in any
thirty (30) consecutive day period; provided, however, that commencing thirty
(30) days following the Closing Date, TKC may sell Registrable Securities up to
such ten percent (10%) limit if, but only if,: (a) any such sale is at a price
of at least $1.25 per share; and (b) the closing price of the Common Stock on
each of the five (5) preceding trading days on the Market is at least $1.25 per
share. TKC agrees that the certificates representing the Registrable Securities
shall be legended in accordance with this Section 1.6.
1.7 Release of Security Interests. At the Closing, TKC shall
execute any and all documents necessary or desirable to release or terminate the
security interests it holds in the Company's assets, including, but not limited
to, the security interests set forth on Schedule 1.7 (the "Security Release
Documents").
ARTICLE 2
CLOSING; CONDITIONS TO CLOSING
2.1 Closing. The closing of the transactions contemplated herein
(the "Closing") will take place at the executive offices of the Company, at a
time and date mutually agreeable to the Parties (the "Closing Date"); provided,
however, that the Parties agree that this Agreement shall terminate and be of no
further force or effect if the Closing does not occur on or prior to July 15,
1999.
2.2 Conditions to Closing of TKC. Except as may be waived in
writing by TKC, the obligations of TKC to consummate the transactions
contemplated herein shall be subject to the fulfillment at or prior to the
Closing Date of each of the following conditions:
a. The Company shall have delivered to TKC the following:
(i) the Cash Payment;
(ii) the Shares; and
(iii) the Warrants.
b. The President of the Company shall have delivered to TKC an
Officer's Certificate certifying to TKC that:
(i) the representations and warranties of the Company
contained in this Agreement and the other documents,
agreements and instruments executed in connection
with this Agreement (the "Transaction Documents")
were true and correct in all material respects when
initially made and are true and correct in all
material respects as of the Closing Date; and
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(ii) the Company has performed and complied in all
material respects with all covenants and conditions
required by the Transaction Documents to be performed
and complied with by the Company prior to the Closing
Date.
c. All authorizations, approvals, consents and waivers of any
governmental authority or third party, each as required to permit the
consummation of the transactions contemplated by the Transaction Documents,
shall have been obtained and shall not have been terminated, suspended or
withdrawn as of the Closing Date.
d. The Company's Board of Directors and stockholders shall have
approved an increase in the Company's authorized shares of Common Stock in order
to consummate the transactions contemplated herein.
e. The holders of at least $1 million in principal amount of the
Company's Term Notes, dated October 1, 1998, shall have converted at least such
dollar amount of the Term Notes into shares of Common Stock at a price no less
than the issuance price of the Shares hereunder, and such shares of Common Stock
so issued in such conversion shall be subject to limits on resale substantially
identical to the limits set forth in Section 1.6 above.
f. The Company shall have received and closed subscriptions for
at least $1 million of newly-issued shares of Common Stock (the "New Shares"),
which New Shares shall be subject to limits on resale substantially identical to
the limits set forth in Section 1.6 above.
g. No investigation, action, suit or proceeding shall be pending
or threatened before any court or governmental body which seeks to restrain,
prohibit or otherwise challenge or interfere with the consummation of the
transactions contemplated herein.
2.3 Conditions to Closing of the Company. Except as may be waived
in writing by the Company, the obligations of the Company to consummate the
transactions contemplated herein shall be subject to the fulfillment at or prior
to the Closing Date of each of the following conditions:
a. TKC shall deliver to the Company
(i) the Note marked "canceled"; and
(ii) the executed Security Release Documents.
b. An authorized officer or director of the TKC shall have
delivered to the Company an Officer's Certificate certifying to the Company
that:
(i) the representations and warranties of TKC contained
in the Transaction Documents were true and correct in
all material respects when initially made and are
true and correct in all material respects as of the
Closing Date; and
(ii) TKC has performed and complied in all material
respects with all covenants and conditions required
by the Transaction Documents to be performed and
complied with by the TKC prior to the Closing Date.
c. All authorizations, approvals, consents and waivers of any
governmental authority or third party, each as required to permit the
consummation of the transactions contemplated by this Agreement, shall have been
obtained and shall not be terminated, suspended or withdrawn as of the Closing
Date.
d. The Company's Board of Directors and stockholders shall have
approved an increase in the Company's authorized shares of Common Stock in order
to consummate the transactions contemplated herein.
e. No investigation, action, suit or proceeding shall be pending
or threatened before any court or governmental body which seeks to restrain,
prohibit or otherwise challenge or interfere with the consummation of the
transactions contemplated herein.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to TKC that the following are true
and correct as of the date hereof and will be true and correct as of the Closing
Date as if made on that date:
3.1 Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company is not barred or otherwise prevented from doing business in any
jurisdiction where the failure to conduct such business would have a material
adverse effect on the Company.
3.2 Power. The Company and each of it subsidiaries have all
required corporate power and authority to own their respective properties and to
carry on their respective businesses as presently conducted. The Company has all
required power and authority to execute and deliver the Transaction Documents
and to carry out the transactions contemplated by the Transaction Documents.
3.3 Authorization. All action on the part of the Company necessary
for the authorization, execution, delivery and performance of the Transaction
Documents by the Company and the performance of all of the Company's obligations
thereunder have been taken. The Transaction Documents executed by the Company
are valid and binding obligations of the Company enforceable according to their
terms, except as may be limited by (a) applicable bankruptcy, insolvency,
reorganization or other similar laws of general application relating to or
affecting the enforcement of creditor rights or the relief of debtors, (b) laws
and judicial decisions regarding indemnification for violations of federal
securities laws, and (c) the availability of specific performance or other
equitable remedies.
3.4 Consents. Except as set forth on Schedule 3.4, no consent,
authorization, approval, permit or license of, or filing with, any governmental
or public body or authority, any lender or lessor or any other person or entity
is required to authorize, or is required in connection with, the execution,
delivery and performance of the Transaction Documents on the part of the
Company.
3.5 Litigation. There is no litigation, arbitration or
governmental proceeding or investigation pending or, to the knowledge of the
Company threatened in writing against the Company which conflicts with the
rights of the Company hereunder or the performance of the Company's obligations
hereunder or have a material adverse effect on the Company's financial position.
The Company is not subject to any judgment, order or decree which may prevent
the Company from conducting its business. The Company is not a party to any
litigation, arbitration, proceeding or investigation pending, or to the
knowledge of the Company threatened, involving any federal, state or local
government or agency which would conflict with, or in any way impact, the
Company's ability to perform its duties hereunder, or have a material adverse
effect on the Company's financial position.
3.6 Financial Statements. The consolidated balance sheets and the
related statements of income, stockholders' equity and cash flow (including the
notes related thereto) of the Company and its consolidated subsidiaries included
in the forms, documents and reports filed by the Company with the SEC complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with prior periods (except as otherwise noted therein) and
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of their respective dates, and the results of their
operations and their cash flow for the periods presented therein.
3.7 Exchange Act. The Company has furnished or made available to
TKC a true and complete copy of its Form 10-K for the fiscal year ended December
31, 1998, and any other document dated on or after the date of such Form 10-K
which the Company filed under the Securities Exchange Act of 1934, as amended,
with the SEC.
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ARTICLE 4
REPRESENTATIONS OF TKC
TKC represents and warrants to the Company that the following are true
as of the date hereof and will be true and correct through the Closing Date as
if made on that date:
4.1 Organization. TKC is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. TKC is not barred or otherwise prevented from doing business in
any jurisdiction where the failure to conduct such business would have a
material adverse effect on TKC.
4.2 Power. TKC has all required corporate power and authority to
own its properties and to carry on its business as presently conducted. TKC has
all required power and authority to execute and deliver the Transaction
Documents and to carry out the transactions contemplated by the Transaction
Documents.
4.3 Authorization. All action on the part of TKC necessary for the
authorization, execution, delivery and performance of the Transaction Documents
by TKC and the performance of all of TKC's obligations thereunder have been
taken. The Transaction Documents executed by TKC are valid and binding
obligations of TKC enforceable according to their terms, except as may be
limited by (a) applicable bankruptcy, insolvency, reorganization or other
similar laws of general application relating to or affecting the enforcement of
creditor rights or the relief of debtors, (b) laws and judicial decisions
regarding indemnification for violations of federal securities laws, and (c) the
availability of specific performance or other equitable remedies.
4.4 Status of TKC. TKC is knowledgeable and experienced in making
venture capital investments, is able to bear the economic risk of loss of its
investment in the Company. TKC is an "accredited investor," as that term is
defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act"). TKC is acting on its own behalf in connection
with the investigation and examination of the Company and its decision to
execute these documents.
4.5 Shares Purchased for Investment. TKC agrees that the Shares,
the Warrants and the Underlying Shares (collectively, the "Securities") shall be
acquired solely for TKC's own account and not as a nominee or agent for any
other person, for investment, and not with a view to, or for offer or resale in
connection with, any distribution thereof within the meaning of the Securities
Act or other applicable securities laws. TKC understands that if any Securities
have not been registered under the Securities Act or under any applicable blue
sky or other state securities law or regulation (hereinafter collectively
referred to as "blue sky laws"), TKC cannot offer for sale, sell, pledge,
transfer or otherwise dispose of such Securities unless such Securities have
been registered under the Securities Act and under any applicable blue sky laws,
or unless an exemption from such registration is available with respect to any
such proposed offer, sale, pledge, transfer or other disposition. TKC agrees
that a restrictive legend addressing the foregoing restrictions on transfer may
be placed on certificates representing any Securities so acquired and that
transfer of such Securities may be refused by the Company or its transfer agent,
if any, if in the opinion of counsel to the Company any proposed sale or other
disposition thereof by TKC would not be in compliance with the Securities Act or
any other applicable federal securities laws or blue sky laws.
4.6 Litigation. There is no litigation, arbitration or
governmental proceeding or investigation pending or, to the knowledge of TKC,
threatened in writing against TKC, which conflicts with the rights of the
Company hereunder or the performance of TKC's obligations hereunder or have a
material adverse effect on TKC's financial position. TKC is not subject to any
judgment, order or decree which may prevent TKC from conducting its business.
TKC is not a party to any litigation, arbitration, proceeding or investigation
pending, or to the knowledge of TKC threatened, involving any federal, state or
local government or agency which would conflict with, or in any way impact,
TKC's ability to perform its duties hereunder, or have a material adverse effect
on TKC's financial position.
4.7 Consents. No consent, authorization, approval, permit or
license of, or filing with, any governmental or public body or authority, any
lender or lessor or any other person or entity is required to authorize,
or is required in connection with, the execution, delivery and performance of
the Transaction Documents on the part of TKC.
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ARTICLE 5
POST-CLOSING MATTERS
5.1 Participation Rights. The Company hereby grants to TKC the
right, but not the obligation, to purchase additional shares of Common Stock on
the same terms and conditions as the issuance of New Shares in the offering
described in Section 2.2(f) above (including, without limitation, the
consideration paid and the timing of the closing); provided, however, that such
right of participation shall be limited to the number of New Shares purchased by
investors in such offering.
5.2 Assistance in Transfers. The Company agrees that once TKC is
eligible to sell Shares and Underlying Shares pursuant to Rule 144 or an
effective Registration Statement, and so long as TKC is in compliance with its
obligations under Section 1.6 above, if TKC sells any such Shares or Underlying
Shares in the public market, then the Company will use all reasonable commercial
efforts to cause such Shares and/or Underlying Shares to be transferred on the
books of its transfer agent.
ARTICLE 6
GENERAL
6.1 Amendments. This Agreement may not be amended, except in a
written document signed by both the Parties.
6.2 Headings. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
6.3 Governing Law. THIS AGREEMENT IS TO BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF.
6.4 Notices and Demands. Any notice or demand which is permitted
or required hereunder will be deemed to have been sufficiently received (except
as otherwise provided herein) (a) upon receipt when personally delivered, (b) or
one (1) day after sent by one-day overnight delivery providing confirmation or
receipt of delivery, or (c) three (3) days after being sent by certified or
registered mail, postage and charges prepaid, return receipt requested to the
addresses listed on Schedule 6.4 attached hereto, or at any other address
designated by either Party hereto to the other Party in writing.
6.5 Severability. If any provision of this Agreement is held
invalid or unenforceable under applicable law, such provision will be
ineffective to the extent of such invalidity or unenforceability, and such
provision will be modified to the extent necessary to make it valid and
enforceable. Any such invalidity or unenforceability will not invalidate or make
unenforceable the remainder of this Agreement.
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6.6 Expenses. Each Party will bear its own fees for counsel and
accountants and other expenses relating to the transactions contemplated herein
(including any broker's or finder's fees); provided, however, that the Company
shall reimburse TKC in an amount up to $5,000 for its reasonable attorney's fees
and expenses.
6.7 Publicity and Disclosures. The Parties agree that the Company
may publicly announce the entering into of this Agreement by the Parties and the
terms and conditions of this Agreement. TKC agrees not to purchase or sell any
Common Stock until two (2) business days after a public announcement of the
transaction contemplated herein has been made by the Company and TKC.
6.8 Entire Agreement. This Agreement and the Schedules and
Exhibits to this Agreement constitute the entire agreement of the Parties with
respect to the subject matter hereof and supersede all prior agreements and
understanding, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof.
6.9 Assignment. Neither this Agreement nor any right or obligation
created hereby or in any agreement entered into in connection with the
transactions contemplated hereby shall be assignable by any party hereto.
6.10 Parties in Interest; No Third Party Beneficiaries. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the Parties and their respective
heirs, legal representatives, successors and assigns. Neither this Agreement nor
any other agreement contemplated hereby shall be deemed to confer upon any
person not a Party any rights or remedies hereunder or thereunder.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be taken to be an original; but such
counterparts will together constitute one document.
The undersigned have executed this Agreement as of the date first
written above.
VSI ENTERPRISES, INC.
By: /s/ Xxxxx X. North
President and Chief Executive Officer
THOMSON KERNAGHAN &CO., LTD.
By: /s/ Xxxx Xxxxxxxxx
Title: Vice President
EXHIBIT A
NEITHER THIS WARRANT, NOR THE SHARES OF COMMON STOCK FOR WHICH IT IS
EXERCISABLE, HAVE BEEN REGISTERED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, ANY APPLICABLE SECURITIES LAWS, OR OTHER APPLICABLE SECURITIES LAWS AND
THIS WARRANT HAS BEEN ISSUED IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH LAWS
FOR TRANSACTIONS NOT INVOLVING ANY PUBLIC OFFERING. THIS WARRANT HAS BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED, PLEDGED
OR DISPOSED OF IN ANY MANNER IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH LAWS COVERING SUCH TRANSACTION OR, IN THE ABSENCE THEREOF,
AN OPINION OF BUYER'S COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED AND ALL
CONDITIONS NECESSARY FOR THE AVAILABILITY OF ANY EXEMPTIONS FROM SUCH
REGISTRATION REQUIREMENTS HAVE BEEN SATISFIED.
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VSI ENTERPRISES, INC.
$1.00 STOCK PURCHASE WARRANT
This is to certify that, the Holder (as defined below) is entitled upon
the due exercise hereof to purchase from VSI Enterprises, Inc. up to ______
shares (subject to adjustment as provided herein) of Common Stock (as defined
below)of at a price per share as specified in Section 2 of this Warrant (subject
to adjustment as provided herein) and to exercise the other rights, power and
privileges hereinafter provided, all on the terms and subject to the conditions
specified herein.
SECTION 1. Certain Definitions. Unless the context otherwise requires,
the following terms as used in this Warrant shall have the following meanings:
"Affiliate" shall mean any partnership or corporation controlled by or
under common control with the initial Holder.
"Common Stock" shall mean the Company's common stock, par value $.00025
per share, or any stock into which such common stock shall have been changed or
any stock resulting from reclassification of such common stock.
"Company shall mean VSI Enterprises, Inc., a Delaware corporation, and
its successors and assigns.
"Exercise Date" has the meaning set forth in Section 3 hereof.
"Exercise Price" shall mean the price specified in Section 2 hereof, as
the same shall be adjusted from time to time pursuant to the provisions of this
Warrant.
"Expiration Date" shall mean [Insert the date five years after the
Closing Date].
"Fair Market Value" shall mean (i) the last sales price for a share of
Common Stock as officially reported on the principal national securities
exchange or domestic over-the-counter market on which the Common Stock is at the
time listed or traded at the time of determination of such Fair Market Value or
(ii) if such Common Stock is not at such time listed on a national securities
exchange or quoted in the domestic over-the-counter market, the fair market
value as determined by the Board of Directors of the Company in good faith after
review of all relevant factors.
"Holder" or "Warrant Holder" shall mean Thomson Kernaghan & Co. Ltd.,
and its successors and registered assigns of this Warrant.
"Warrant" means this Warrant dated as of ______, 1999, issued to Holder
and all warrants issued upon the transfer or division of or in substitution for
this Warrant.
SECTION 2. Exercise Price. The Exercise Price shall be $1.00 per share
of Common Stock. The Exercise Price shall be paid in cash or other immediately
available funds.
SECTION 3. Exercise. On or prior to the Expiration Date, this Warrant
may be exercised by the Holder, as to all or less than all of the shares of
Common Stock covered hereby, by surrender of this Warrant at the Company's
principal office (for all purposes of this Warrant, 0000 Xxxxxx Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxx, 00000, X.X.X. or such other address as the Company may advise
the registered Holder hereof by notice given by certified or registered mail)
with the form of election to subscribe attached hereto as Exhibit A duly
executed and upon tender of payment to the Company of the Exercise Price for the
shares so purchased. Upon the date of such receipt by the Company (herein called
the "Exercise Date"), this Warrant shall be deemed to have been exercised and
the person exercising the same shall become a holder of record of shares of
Common Stock (or of the other securities or property to which he or it is
entitled upon such exercise) purchased hereunder for all purposes, and
certificates for
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such shares so purchased shall be delivered to the Holder or its transferee
within a reasonable time (not exceeding 10 days) after this Warrant shall have
been exercised as set forth hereinabove. In the event that this Warrant is
exercised in part, the Company will execute and deliver a new Warrant of like
tenor exerciseable for the number of shares for which this Warrant may then be
exercised. If this Warrant is not exercised on or prior to the Expiration Date,
this Warrant shall become void and all rights of the Holder hereunder shall
cease.
SECTION 4. Taxes. The Company shall pay all expenses in connection
with, and all transfer taxes and other governmental charges that may be imposed
with respect to, the issue or delivery of the shares of Common Stock covered
hereby unless such tax or charge is imposed by law upon the Holder, in which
case such taxes or charges shall be paid by the Holder. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock
issuable upon exercise of this Warrant in any name other than that of the
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or the charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other charge
is due.
SECTION 5. Warrant Register. The Company shall at all times while any
portion of this Warrant remains outstanding and exerciseable keep and maintain
at its principal office a register (the "Warrant Register") in which the
registration, transfer and exchange of this Warrant shall be recorded. The
Warrant Register shall contain the names and addresses of the Holder or Holders.
Any Holder of this Warrant or any portion thereof may change his or her address
as shown on the Warrant Register by written notice to the Company requesting
such change. Any notice or written communication required or permitted to be
given to the Holder may be delivered or given by mail to such Holder as shown on
the Warrant Register and at the address shown on the Warrant Register. The
Company shall not at any time, except upon the dissolution, liquidation or
winding up of the Company, close such register so as to result in preventing or
delaying the exercise or transfer of this Warrant. If at any time, the Company
shall appoint an agent (the "Warrant Agent") to maintain such register, the
Company shall promptly give notice by certified or registered mail to the
registered Holder hereof of the name of such Warrant Agent and of the place or
places at which this Warrant may be presented for transfer, exchange or
exercise. The terms of the agreement between the Company and any Warrant Agent
at any time in effect will be in conformity with the terms of this Warrant.
SECTION 6. Transfer. The Company shall register the transfer of any
Warrant upon records to be maintained by the Company for that purpose, upon
surrender of this Warrant, with the form of transfer authorization attached
hereto as Exhibit B duly filled in and signed, to the Company at the office
specified above. Upon any such registration of transfer, a new Warrant, in
substantially the form of this Warrant, evidencing the Warrant rights so
transferred, shall be issued to the transferee and a new Warrant, in similar
form, evidencing the remaining Warrant rights not so transferred, if any, shall
be issued to the then registered Holder thereof. The Holder understands that
this Warrant has not been and will not be registered under the Securities Act of
1933, as amended (the "Securities Act") and that the Warrant and the shares of
Common Stock issuable upon exercise hereof may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of in the absence of an
effective registration statement under the Securities Act, relating to such
Warrant or shares; provided, however that this Warrant and the shares of Common
Stock issuable upon exercise hereof may be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of if the holder obtains a written opinion
of counsel acceptable to the Company to the effect that the proposed sale,
assignment, transfer, pledge or other encumbrance or disposition is exempt from
registration under the Securities Act, and all other applicable securities laws.
The Holder acknowledges and agrees that the shares of Common Stock issued upon
the exercise of this Warrant will contain a legend to the above effect.
SECTION 7. Exchange. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal offices of the Company, together with the
form of transfer authorization attached hereto duly executed, for new warrants
of like tenor and date, in such denominations as the Holder shall designate at
the time of surrender for exchange, provided that the total number of shares of
Common Stock issuable upon the exercise of the Warrant shall not be changed as a
result thereof.
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SECTION 8. Covenants of the Company.
(a) The Company covenants and agrees that all shares of Common
Stock which may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be fully paid and nonassessable, free from
preemptive rights, and free from all taxes, liens, encumbrances and charges with
respect to the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue). The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved a sufficient number of shares of Common Stock to provide for the
exercise in full of the rights represented by this Warrant.
(b) As long as the Warrant remains outstanding, the Company shall
maintain an office or agency (which may be the principal executive office of the
Company) where the Warrant may be presented for exercise, registration of
transfer, exchange, division or combination as provided in this Warrant.
SECTION 9. Adjustments for Stock Splits and Subdivisions.
(a) In the event the Company should at any time or from time to
time after the date of issuance hereof fix a record date for the effectuation of
a split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Exercise
Price of this Warrant shall be appropriately decreased so that the number of
shares of Common Stock issuable upon exercise of this Warrant shall be increased
in proportion to such increase of outstanding shares.
(b) If the number of shares of Common Stock outstanding at any
time after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such combination, the
Exercise Price for this Warrant shall be appropriately increased so that the
number of shares of Common Stock issuable on exercise hereof shall be decreased
in proportion to such decrease in outstanding shares.
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SECTION 10. Holder's Rights. This Warrant shall not entitle the Holder
to any rights of a stockholder of the Company, except that should the Company,
during the period in which this Warrant is exerciseable, declare a dividend upon
the Common Stock payable other than in cash out of earnings or surplus (computed
in accordance with generally accepted accounting principles consistently
applied) or other than in Common Stock or securities convertible into Common
Stock, then, thereafter, the Warrant Holder, upon exercise of this Warrant,
shall receive the number of shares of Common Stock purchasable upon such
exercise and, in addition and without further payment, the cash, stock or other
securities and/or other property which the Warrant Holder would have received by
way of dividends (otherwise than in cash out of earnings or earned surplus or in
Common Stock or securities convertible into Common Stock) and/or any other
distributions in respect of the Common Stock as if, continuously since the date
hereof, such Warrant Holder (a) had been the record holder of the number of
shares of Common Stock then being purchased, and (b) had retained all such cash,
stock and other securities (other than dividends in cash out of earnings or
earned surplus or in Common Stock or securities convertible into Common Stock)
and/or other property payable in respect of such Common Stock or in respect of
any stock or securities paid as dividends and originating directly or indirectly
from such Common Stock.
SECTION 11. Notice of Adjustments. If there shall be any adjustment as
provided in Section 9, the Company shall forthwith cause written notice thereof
to be sent by facsimile, overnight or registered mail, postage prepaid, to the
registered Holder of this Warrant at the address of such Holder shown on the
books of the Company. At the request of Holder and upon surrender of this
Warrant, the Company shall reissue this Warrant in a form conforming to such
adjustments.
SECTION 12. Cash in Lieu of Fractional Shares. The Company shall not
be required to issue fractional shares upon the exercise of this Warrant if, by
reason of any change made pursuant to Section 9 or 10 hereof, the Holder of this
Warrant would be entitled, upon the exercise of any rights evidenced hereby, to
receive a fractional interest in a share, the Company shall, upon such exercise,
purchase such fractional interest for an amount in cash equal to the fair market
value of such fractional interest, determined as of the Exercise Date.
SECTION 13. Lost, Stolen, Mutilated or Destroyed Warrants. If this
Warrant is lost, stolen, mutilated, or destroyed, the Company will issue, in
exchange for and upon cancellation of the mutilated Warrant, or in substitution
for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the
form of this Warrant, of like tenor and representing the right to purchase the
equivalent number of the remaining shares of Common Stock issuable upon exercise
hereof, but, in the case of loss, theft or destruction, only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of this
Warrant and, if requested by the Company, an indemnification also satisfactory
to it (it being understood that the written agreement of the Holder shall be
sufficient indemnity), provided, in the case of mutilation, no indemnity shall
be required if this Warrant in identifiable form is surrendered to the Company
for cancellation.
SECTION 14. Certain Limitations. Notwithstanding anything herein to
the contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the current Exercise Price to be
less than the par value per share of Common Stock.
SECTION 15. No Impairment. The Company represents and warrants that
there are no restrictions in the Company's Certificate of Incorporation or
Bylaws which prevent it from satisfying its obligation to issue the shares of
Common Stock issuable upon exercise of the Warrant. The Company shall not by any
action including, without limitation, amending its Certificate of Incorporation
or Bylaws, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
to avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, and will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment.
SECTION 16. Applicable Law, Payments. The validity, interpretation and
performance of this Warrant shall be governed by the laws of the State of
Delaware. All payments shall be in U.S. Dollars by immediately available funds.
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SECTION 17. Successors and Assigns This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Company and the Holder.
SECTION 18. Headings. Headings of the paragraphs in this Warrant are
for convenience and reference only and shall not, for any purpose, be deemed a
part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed under seal by its duly authorized officer this ___ day of ______, 1999.
VSI ENTERPRISES, INC.
By: /s/ Xxxxx X. North,
President and
Chief Executive Officer
EXHIBIT B
NEITHER THIS WARRANT, NOR THE SHARES OF COMMON STOCK FOR WHICH IT IS
EXERCISABLE, HAVE BEEN REGISTERED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, ANY APPLICABLE SECURITIES LAWS, OR OTHER APPLICABLE SECURITIES LAWS AND
THIS WARRANT HAS BEEN ISSUED IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH LAWS
FOR TRANSACTIONS NOT INVOLVING ANY PUBLIC OFFERING. THIS WARRANT HAS BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED, PLEDGED
OR DISPOSED OF IN ANY MANNER IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH LAWS COVERING SUCH TRANSACTION OR, IN THE ABSENCE THEREOF,
AN OPINION OF BUYER'S COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED AND ALL
CONDITIONS NECESSARY FOR THE AVAILABILITY OF ANY EXEMPTIONS FROM SUCH
REGISTRATION REQUIREMENTS HAVE BEEN SATISFIED.
VSI ENTERPRISES, INC.
$1.50 STOCK PURCHASE WARRANT
This is to certify that, the Holder (as defined below) is entitled upon
the due exercise hereof to purchase from VSI Enterprises, Inc. up to ______
shares (subject to adjustment as provided herein) of Common Stock (as defined
below)of at a price per share as specified in Section 2 of this Warrant (subject
to adjustment as provided herein) and to exercise the other rights, power and
privileges hereinafter provided, all on the terms and subject to the conditions
specified herein.
SECTION 1. Certain Definitions. Unless the context otherwise requires,
the following terms as used in this Warrant shall have the following meanings:
"Affiliate" shall mean any partnership or corporation controlled by or
under common control with the initial Holder.
"Common Stock" shall mean the Company's common stock, par value $.00025
per share, or any stock into which such common stock shall have been changed or
any stock resulting from reclassification of such common stock.
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"Company shall mean VSI Enterprises, Inc., a Delaware corporation, and
its successors and assigns.
"Exercise Date" has the meaning set forth in Section 3 hereof.
"Exercise Price" shall mean the price specified in Section 2 hereof, as
the same shall be adjusted from time to time pursuant to the provisions of this
Warrant.
"Expiration Date" shall mean [Insert the date five years after the
Closing Date].
"Fair Market Value" shall mean (i) the last sales price for a share of
Common Stock as officially reported on the principal national securities
exchange or domestic over-the-counter market on which the Common Stock is at the
time listed or traded at the time of determination of such Fair Market Value or
(ii) if such Common Stock is not at such time listed on a national securities
exchange or quoted in the domestic over-the-counter market, the fair market
value as determined by the Board of Directors of the Company in good faith after
review of all relevant factors.
"Holder" or "Warrant Holder" shall mean Thomson Kernaghan & Co., Ltd.,
and its successors and registered assigns of this Warrant.
"Warrant" means this Warrant dated as of ________, 1999, issued to
Holder and all warrants issued upon the transfer or division of or in
substitution for this Warrant.
SECTION 2. Exercise Price. The Exercise Price shall be $1.50 per share
of Common Stock. The Exercise Price shall be paid in cash or other immediately
available funds.
SECTION 3. Exercise. On or prior to the Expiration Date, this Warrant
may be exercised by the Holder, as to all or less than all of the shares of
Common Stock covered hereby, by surrender of this Warrant at the Company's
principal office (for all purposes of this Warrant, 0000 Xxxxxx Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxx, 00000, X.X.X. or such other address as the Company may advise
the registered Holder hereof by notice given by certified or registered mail)
with the form of election to subscribe attached hereto as Exhibit A duly
executed and upon tender of payment to the Company of the Exercise Price for the
shares so purchased. Upon the date of such receipt by the Company (herein called
the "Exercise Date"), this Warrant shall be deemed to have been exercised and
the person exercising the same shall become a holder of record of shares of
Common Stock (or of the other securities or property to which he or it is
entitled upon such exercise) purchased hereunder for all purposes, and
certificates for such shares so purchased shall be delivered to the Holder or
its transferee within a reasonable time (not exceeding 10 days) after this
Warrant shall have been exercised as set forth hereinabove. In the event that
this Warrant is exercised in part, the Company will execute and deliver a new
Warrant of like tenor exerciseable for the number of shares for which this
Warrant may then be exercised. If this Warrant is not exercised on or prior to
the Expiration Date, this Warrant shall become void and all rights of the Holder
hereunder shall cease.
SECTION 4. Taxes. The Company shall pay all expenses in connection
with, and all transfer taxes and other governmental charges that may be imposed
with respect to, the issue or delivery of the shares of Common Stock covered
hereby unless such tax or charge is imposed by law upon the Holder, in which
case such taxes or charges shall be paid by the Holder. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock
issuable upon exercise of this Warrant in any name other than that of the
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or the charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other charge
is due.
SECTION 5. Warrant Register. The Company shall at all times while any
portion of this Warrant remains outstanding and exerciseable keep and maintain
at its principal office a register (the "Warrant Register") in which the
registration, transfer and exchange of this Warrant shall be recorded. The
Warrant Register shall contain the names and addresses of the Holder or Holders.
Any
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Holder of this Warrant or any portion thereof may change his or her address as
shown on the Warrant Register by written notice to the Company requesting such
change. Any notice or written communication required or permitted to be given to
the Holder may be delivered or given by mail to such Holder as shown on the
Warrant Register and at the address shown on the Warrant Register. The Company
shall not at any time, except upon the dissolution, liquidation or winding up of
the Company, close such register so as to result in preventing or delaying the
exercise or transfer of this Warrant. If at any time, the Company shall appoint
an agent (the "Warrant Agent") to maintain such register, the Company shall
promptly give notice by certified or registered mail to the registered Holder
hereof of the name of such Warrant Agent and of the place or places at which
this Warrant may be presented for transfer, exchange or exercise. The terms of
the agreement between the Company and any Warrant Agent at any time in effect
will be in conformity with the terms of this Warrant.
SECTION 6. Transfer. The Company shall register the transfer of any
Warrant upon records to be maintained by the Company for that purpose, upon
surrender of this Warrant, with the form of transfer authorization attached
hereto as Exhibit B duly filled in and signed, to the Company at the office
specified above. Upon any such registration of transfer, a new Warrant, in
substantially the form of this Warrant, evidencing the Warrant rights so
transferred, shall be issued to the transferee and a new Warrant, in similar
form, evidencing the remaining Warrant rights not so transferred, if any, shall
be issued to the then registered Holder thereof. The Holder understands that
this Warrant has not been and will not be registered under the Securities Act of
1933, as amended (the "Securities Act") and that the Warrant and the shares of
Common Stock issuable upon exercise hereof may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of in the absence of an
effective registration statement under the Securities Act, relating to such
Warrant or shares; provided, however that this Warrant and the shares of Common
Stock issuable upon exercise hereof may be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of if the holder obtains a written opinion
of counsel acceptable to the Company to the effect that the proposed sale,
assignment, transfer, pledge or other encumbrance or disposition is exempt from
registration under the Securities Act, and all other applicable securities laws.
The Holder acknowledges and agrees that the shares of Common Stock issued upon
the exercise of this Warrant will contain a legend to the above effect.
SECTION 7. Exchange. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal offices of the Company, together with the
form of transfer authorization attached hereto duly executed, for new warrants
of like tenor and date, in such denominations as the Holder shall designate at
the time of surrender for exchange, provided that the total number of shares of
Common Stock issuable upon the exercise of the Warrant shall not be changed as a
result thereof.
SECTION 8. Covenants of the Company.
(a) The Company covenants and agrees that all shares of Common
Stock which may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be fully paid and nonassessable, free from
preemptive rights, and free from all taxes, liens, encumbrances and charges with
respect to the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue). The Company further covenants and
agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved a sufficient number of shares of Common Stock to provide for the
exercise in full of the rights represented by this Warrant.
(b) As long as the Warrant remains outstanding, the Company shall
maintain an office or agency (which may be the principal executive office of the
Company) where the Warrant may be presented for exercise, registration of
transfer, exchange, division or combination as provided in this Warrant.
SECTION 9. Adjustments for Stock Splits and Subdivisions.
(a) In the event the Company should at any time or from time to
time after the date of issuance hereof fix a record date for the effectuation of
a split or subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common
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Stock Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Exercise Price of this Warrant shall be appropriately decreased so that the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
increased in proportion to such increase of outstanding shares.
(b) If the number of shares of Common Stock outstanding at any
time after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such combination, the
Exercise Price for this Warrant shall be appropriately increased so that the
number of shares of Common Stock issuable on exercise hereof shall be decreased
in proportion to such decrease in outstanding shares.
SECTION 10. Holder's Rights. This Warrant shall not entitle the Holder
to any rights of a stockholder of the Company, except that should the Company,
during the period in which this Warrant is exerciseable, declare a dividend upon
the Common Stock payable other than in cash out of earnings or surplus (computed
in accordance with generally accepted accounting principles consistently
applied) or other than in Common Stock or securities convertible into Common
Stock, then, thereafter, the Warrant Holder, upon exercise of this Warrant,
shall receive the number of shares of Common Stock purchasable upon such
exercise and, in addition and without further payment, the cash, stock or other
securities and/or other property which the Warrant Holder would have received by
way of dividends (otherwise than in cash out of earnings or earned surplus or in
Common Stock or securities convertible into Common Stock) and/or any other
distributions in respect of the Common Stock as if, continuously since the date
hereof, such Warrant Holder (a) had been the record holder of the number of
shares of Common Stock then being purchased, and (b) had retained all such cash,
stock and other securities (other than dividends in cash out of earnings or
earned surplus or in Common Stock or securities convertible into Common Stock)
and/or other property payable in respect of such Common Stock or in respect of
any stock or securities paid as dividends and originating directly or indirectly
from such Common Stock.
SECTION 11. Notice of Adjustments. If there shall be any adjustment as
provided in Section 9, the Company shall forthwith cause written notice thereof
to be sent by facsimile, overnight or registered mail, postage prepaid, to the
registered Holder of this Warrant at the address of such Holder shown on the
books of the Company. At the request of Holder and upon surrender of this
Warrant, the Company shall reissue this Warrant in a form conforming to such
adjustments.
SECTION 12. Cash in Lieu of Fractional Shares. The Company shall not
be required to issue fractional shares upon the exercise of this Warrant if, by
reason of any change made pursuant to Section 9 or 10 hereof, the Holder of this
Warrant would be entitled, upon the exercise of any rights evidenced hereby, to
receive a fractional interest in a share, the Company shall, upon such exercise,
purchase such fractional interest for an amount in cash equal to the fair market
value of such fractional interest, determined as of the Exercise Date.
SECTION 13. Lost, Stolen, Mutilated or Destroyed Warrants. If this
Warrant is lost, stolen, mutilated, or destroyed, the Company will issue, in
exchange for and upon cancellation of the mutilated Warrant, or in substitution
for the lost, stolen or destroyed Warrant, a new Warrant, in substantially the
form of this Warrant, of like tenor and representing the right to purchase the
equivalent number of the remaining shares of Common Stock issuable upon exercise
hereof, but, in the case of loss, theft or destruction, only upon receipt of
evidence satisfactory to the Company of such loss, theft or destruction of this
Warrant and, if requested by the Company, an indemnification also satisfactory
to it (it being understood that the written agreement of the Holder shall be
sufficient indemnity), provided, in the case of mutilation, no indemnity shall
be required if this Warrant in identifiable form is surrendered to the Company
for cancellation.
SECTION 14. Certain Limitations. Notwithstanding anything herein to
the contrary, the Company agrees not to enter into any transaction which, by
reason of any adjustment hereunder, would cause the current Exercise Price to be
less than the par value per share of Common Stock.
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SECTION 15. No Impairment. The Company represents and warrants that
there are no restrictions in the Company's Certificate of Incorporation or
Bylaws which prevent it from satisfying its obligation to issue the shares of
Common Stock issuable upon exercise of the Warrant. The Company shall not by any
action including, without limitation, amending its Certificate of Incorporation
or Bylaws, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
to avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, and will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment.
SECTION 16. Applicable Law, Payments. The validity, interpretation and
performance of this Warrant shall be governed by the laws of the State of
Delaware. All payments shall be in U.S. Dollars by immediately available funds.
SECTION 17. Successors and Assigns This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors and assigns of the Company and the Holder.
SECTION 18. Headings. Headings of the paragraphs in this Warrant are
for convenience and reference only and shall not, for any purpose, be deemed a
part of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed under seal by its duly authorized officer this ___ day of ______, 1999.
VSI ENTERPRISES, INC.
By: /s/ Xxxxx X. North,
President and Chief Executive Officer
EXHIBIT A
FORM OF SUBSCRIPTION
The undersigned, registered holder or assignee of such registered
holder of the within Warrant, hereby (1) subscribes for __________ shares of
Common Stock (subject to adjustment as provided herein) which the undersigned is
entitled to purchase under the terms of the within Warrant, (2) makes the full
cash payment called for by the within Warrant, and (3) directs that the shares
of Common Stock issuable upon exercise of said Warrant be issued as follows:
Name:
---------------------------------------
Address:
------------------------------------
Dated as of .
------------------------------------
--------------------------------------------
(Name of Holder)
By:
-----------------------------------------
Title:
--------------------------------------
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NOTICE: The name and signature on this subscription form must correspond with
the name as written upon the face of the within Warrant, or upon the assignment
form on the reverse thereof, in every particular, without alteration or
enlargement.
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EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED _____________ hereby sells, assigns, and transfers unto
_____________, the right to purchase shares of Common Stock of VSI Enterprises,
Inc., a Delaware corporation (the "Company"), subject to adjustment as provided
herein, evidenced by the within Warrant, and hereby irrevocably constitutes and
appoints __________to transfer such right on the books of the Company, with full
power of substitution.
Date:
--------------,----------.
Name:
---------------------------------------
By:
-----------------------------------------
Title
---------------------------------------
Date:
-----------------------------------
NOTICE: The name and signature on this assignment must correspond with the name
as written upon the face of the within Warrant, or upon any assignment form duly
executed pursuant to the terms of the within Warrant, in every particular,
without alteration or enlargement.
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