EXHIBIT 10b
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NEITHER THIS WARRANT NOR THE UNDERLYING SHARES HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE HOLDER (AS DEFINED
BELOW) MAY NOT TRANSFER THIS WARRANT OR ANY SHARES ISSUED PURSUANT TO
ITS EXERCISE PROVISION UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION
COVERING SUCH WARRANT OR SUCH SHARES, AS THE CASE MAY BE, UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
LAWS, (B) THE PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND UNDER ALL APPLICABLE STATE
SECURITIES LAWS, OR (C) THE TRANSFER IS MADE PURSUANT TO RULE 144
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
CHAPEAUMOLLER INTERNATIONAL, INC.
WARRANT CERTIFICATE
FOR THE PURCHASE OF COMMON STOCK
FOR VALUE RECEIVED, Chapeau, Inc., a Utah corporation (the "Company")
doing business as BLUEPOINT ENERGY PRODUCTS, INC., with principal
business office at 00 Xxxx Xxxxx Xxxxxx, Xxxx, XX 00000 hereby
certifies that FIRST TRUST fbo H. XXXXXX XXXXXXXX or its assigns (the
"Holder"), is entitled to purchase from the Company, subject to the
terms and conditions of this Warrant Certificate ("Warrant") and the
Secured Convertible Promissory Note of even date herewith, up to
400,000 fully paid and non-assessable shares of Common Stock (as
defined below) on the date that this Warrant is first exercised in
full or in part, at any time, or from time to time during the period
commencing on the date hereof (the "Effective Date") and expiring on
the Expiration Date (as defined below). The purchase price for the
shares of Common Stock shall be the lower of (a) $0.25 per share, or
(b) if the Common Stock is listed on any established stock exchange or
a national market system, a per share price equal to 85% of the
average of the closing prices for the 30 trading days immediately
preceding the date of exercise, in either case as may be adjusted from
time to time as herein provided (the "Exercise Price").
The term "Common Stock" means the Common Stock, $.001 par value, of
the Company, together with any other equity securities that may be
issued by the Company in respect thereof or in substitution therefor.
The number of shares of Common Stock to be received upon the exercise
of this Warrant may be adjusted from time to time as hereinafter set
forth. The shares of Common Stock deliverable or delivered upon such
exercise, as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Stock."
The term "Company" means the issuer and its successors and assigns.
The term "Expiration Date" means the day occurring 120 calendar days
following the date of issuance of this Warrant Certificate, or, if
such day is a day on which banking institutions in Reno, Nevada are
authorized by law to close, then on the next succeeding day that shall
not be such a day.
The term "Holder" means the person or persons to whom the Company has
issued the Secured Convertible Promissory Note of even date herewith
entitling the Holder to acquire shares of its Common Stock. If there
is more than one Holder at any time, each such Holder shall be
entitled to the rights and privileges granted hereunder. All Holders
of record shall receive the notice in (a) below.
The terms "Registration", "register" and like words mean compliance
with all of the laws, rules, regulations and provisions of agreements
and corporate documents pertaining to lawful and unrestricted transfer
of securities by way of a public offering or distribution, including
distribution exempt from registration under Regulation A promulgated
pursuant to the Securities Act of 1933, as amended (the "Act"), when
applicable.
"Security" means the Secured Convertible Promissory Note of even date
herewith and all shares of Common Stock issued upon conversion of all
or any part of the Secured Convertible Promissory Note (the
"Conversion Stock"), and any shares of stock of the Company of all
classes, types and series (and all rights, however evidenced or
contained, convertible or exercisable or exchangeable into such
shares) to which any Holder is entitled.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction, mutilation or partial exercise of
this Warrant, and in the case of loss, theft, destruction, mutilation
or partial exercise, of satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated or partially
exercised, the Company shall execute and deliver a new Warrant, of
like tenor and date.
EXERCISE OF WARRANT.
General Procedure. Subject to the terms and conditions set
forth herein, this Warrant may be exercised, in whole, or in
part, at any time during the period commencing on the Effective
Date and expiring at 5:00 p.m. Pacific Time on the Expiration
Date by presentation and surrender of this Warrant to the Company
at its principal office and delivery of the Warrant Exercise Form
attached as Exhibit A to this Warrant, duly executed and
accompanied by payment (either in cash or by certified or
official bank check, payable to the order of the Company) of the
aggregate Exercise Price for the number of shares specified in
such form, if applicable, and instruments of transfer, if
appropriate, duly executed by the Holder. If this Warrant is
exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the
balance of the shares purchasable hereunder.
Net Issue Exercise of Warrant. Notwithstanding any
provisions herein to the contrary, if the fair market value of
one share of Common Stock (at the date of calculation as set
forth below) is greater than the Exercise Price, in lieu of
exercising this Warrant for cash, the Holder may elect to receive
shares of Common Stock equal to the value (as determined below)
of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company
together with the properly endorsed Exhibit A, in which event the
Company shall issue to the Holder the number of shares of Common
Stock computed using the following formula:
X = Y (A-B)
A
Where X = the number of shares of Common Stock to be issued to
the Holder;
Y = the number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being
canceled (at the date of such calculation);
A = the fair market value of one share of Common Stock (at
the date of such calculation); and
B = the Exercise Price (as adjusted to the date of such
calculation).
For the purposes of the above calculation, the fair market value of
one share of Common Stock as of a particular date shall be determined
as follows: if traded on a securities exchange or through the Nasdaq
National Market, the fair market value shall be deemed to be the
average of the closing prices of the Common Stock on such exchange
over the thirty day period ending the day prior to the date of
exercise; (ii) if traded over-the-counter, the fair market value shall
be deemed to be the average of the closing bid or sales prices
(whichever is applicable) over the thirty day period ending the day
prior to the date of exercise, or (ii) if there is no active public
market for the Common Stock, the fair market value shall be as
determined by the Company's Board of Directors in the good faith
exercise of its reasonable business judgment. Notwithstanding the
foregoing, in the event the Warrant is exercised in connection with
the Company's initial public offering of its Common Stock, the fair
market value per share shall be the per share offering price to the
public as specified in the Company's final prospectus with respect to
such offering.
Common Stock Delivery. Upon receipt by the Company of this
Warrant, together with the Exercise Price, at its office in
proper form for exercise as described above, together with an
agreement to comply with the restrictions on transfer and related
covenants contained herein and a representation as to investment
intent and any other matter reasonably required by counsel to the
Company, signed by the Holder (and if other than the original
Holder accompanied by proof, reasonably satisfactory to counsel
for the Company, of the right of such person or persons to
exercise the Warrant), the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such
exercise, even if the stock transfer books of the Company shall
then be closed or certificates representing such shares of Common
Stock shall not have been delivered to the Holder. The Holder
shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of
shares of Common Stock on exercise of this Warrant. The Company
shall promptly thereafter issue certificate(s) evidencing the
Common Stock so purchased.
RESERVATION OF SHARES. THE COMPANY SHALL AT ALL TIMES RESERVE
FOR ISSUANCE AND DELIVERY UPON EXERCISE OF THIS WARRANT
SUFFICIENT SHARES (IF AND AS ADJUSTED) OF COMMON STOCK OR OTHER
SHARES OF CAPITAL STOCK OF THE COMPANY (AND OTHER SECURITIES)
FROM TIME TO TIME RECEIVABLE UPON EXERCISE OF THIS WARRANT. ALL
SUCH SHARES (AND OTHER SECURITIES) SHALL BE DULY AUTHORIZED AND,
WHEN ISSUED UPON EXERCISE, SHALL BE VALIDLY ISSUED, FULLY PAID
AND NON-ASSESSABLE.
NO FRACTIONAL SHARES. NO FRACTIONAL SHARES OR SCRIPT
REPRESENTING FRACTIONAL SHARES SHALL BE ISSUED UPON THE EXERCISE
OF THIS WARRANT, BUT THE COMPANY SHALL PAY THE HOLDER AN AMOUNT
EQUAL TO THE FAIR MARKET VALUE (AS DEFINED IN SECTION 1.2 HEREOF)
OF SUCH FRACTIONAL SHARE OF COMMON STOCK IN LIEU OF EACH FRACTION
OF A SHARE OTHERWISE CALLED FOR UPON ANY EXERCISE OF THIS
WARRANT.
TRANSFER.
Securities Laws. Neither this Warrant nor the Warrant Stock
have been registered under the Securities Act of 1933, as amended
(the "Securities Act"). The Company will not transfer this
Warrant or the Warrant Stock unless (a) there is an effective
registration covering such Warrant or such shares, as the case
may be, under the Securities Act and applicable state securities
laws, (b) it first receives a letter from an attorney stating
that in the opinion of the attorney the proposed transfer is
exempt from registration under the Securities Act and under all
applicable state securities laws, or (c) the transfer is made
pursuant to Rule 144 promulgated under the Securities Act.
Conditions to Transfer. Prior to any such proposed
transfer, and as a condition thereto, if such transfer is not
made pursuant to an effective registration statement under the
Securities Act, the Holder will, if requested by the Company,
deliver to the Company (a) an investment covenant signed by the
proposed transferee, (b) an agreement by such transferee that the
restrictive investment legend set forth above be placed on the
certificate or certificates representing the securities acquired
by such transferee, and (c) an agreement by such transferee that
the Company may place a "stop transfer order" with its transfer
agent or registrar.
RIGHTS OF THE HOLDER. THE HOLDER SHALL NOT, BY VIRTUE HEREOF, BE
ENTITLED TO ANY RIGHTS OF A SHAREHOLDER IN THE COMPANY, EITHER AT
LAW OR IN EQUITY, AND THE RIGHTS OF THE HOLDER ARE LIMITED TO
THOSE EXPRESSED IN THIS WARRANT AND THE PURCHASE AGREEMENT. THE
WARRANT STOCK SHALL BE ENTITLED TO ALL OF THE RIGHTS, PRIVILEGES
AND BENEFITS PROVIDED IN THIS WARRANT AND THE PURCHASE AGREEMENT,
INCLUDING SECTIONS 7.1(J), (M) AND (N) OF THE PURCHASE AGREEMENT.
ADJUSTMENTS.
Stock Splits, Dividends, Etc.
(a) If the Company shall at any time prior to the
expiration of this Warrant subdivide its outstanding shares of Common
Stock by recapitalization, reclassification, split-up or otherwise, or
if the Company shall declare a stock dividend or distribute shares of
Common Stock to its shareholders, the number of shares of Common Stock
purchasable under this Warrant immediately prior to such subdivision,
declaration or distribution shall be proportionately increased, and if
the Company shall at any time combine the outstanding shares of Common
Stock by recapitalization, reclassification or combination thereof,
the number of shares of Common Stock purchasable under this Warrant
immediately prior to such combination shall be proportionately
decreased. Any such adjustment and the adjustment to the number of
shares purchasable and the Exercise Price pursuant to this Section 6
shall be effective at the close of business on the effective date of
such subdivision or combination, or if any adjustment is the result of
a stock dividend or distribution then the effective date for such
adjustment based thereon shall be the record date therefor or upon the
making of such dividend or distribution if no record date is fixed.
(b) Whenever the number of shares of Common Stock
purchasable upon the exercise of this Warrant is adjusted as provided
in this Section 6, the Exercise Price shall be adjusted to the nearest
cent by multiplying such Exercise Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the
number of shares of Common Stock purchasable upon the exercise
immediately prior to such adjustment, and (y) the denominator of which
shall be the number of shares of Common Stock so purchasable
immediately thereafter.
Adjustment for Reorganization, Consolidation, Merger, Etc.
In case of any reorganization of the Company (or any other
corporation, the securities of which are at the time receivable
on the exercise of this Warrant) or in case the Company (or any
such other corporation) shall consolidate or merge into another
entity or convey all or substantially all of its assets to
another entity, then, and in each such case, the Holder of this
Warrant may, immediately prior to such transaction, exercise as
provided in Section 1, or, at any time after the consummation of
such reorganization, consolidation, merger or conveyance, shall
be entitled to receive, in lieu of the securities and property
receivable upon the exercise of this Warrant prior to such
consummation, the securities or property to which such Holder
would have been entitled upon such consummation if such Holder
had exercised this Warrant immediately prior thereto; in each
such case, the terms of this Warrant shall be applicable to the
securities or property received upon the exercise of this Warrant
after such consummation.
Certificate as to Adjustments. In each case of an
adjustment in the number of shares of Common Stock receivable on
the exercise of this Warrant, the Company at its expense shall
promptly compute such adjustment in accordance with the terms of
the Warrant and prepare a certificate executed by an officer of
the Company setting forth such adjustment and showing the facts
upon which such adjustment is based. The Company shall forthwith
mail a copy of each such certificate to the Holder.
Notices of Record Date, Etc. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other securities at the time receivable upon the
exercise of the Warrant) for the purpose of entitling them to receive
any dividend (other than a cash dividend at the same rate as the rate
of the last cash dividend theretofore paid) or other distribution, or
any right to subscribe for, purchase or otherwise acquire all shares
of stock of any class or any other securities, or to receive any other
right; or
(b) of any voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, and in each such case,
the Company shall mail or cause to be mailed to each Holder a notice
specifying, as the case may be, (i) the date on which a record is to
be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or
right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution,
liquidation or winding-up is to take place, and the time, if any, to
be fixed, as to which the holders of record of Common Stock (or such
other securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock
(or such other securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 20 days prior to the date therein
specified, and this Warrant may be exercised prior to said date during
the term of the Warrant.
Threshold for Adjustments. Anything in this Section 6 to
the contrary notwithstanding, the Company shall not be required
to give effect to any adjustment until the cumulative resulting
adjustment in the Exercise Price pursuant to this Section 6 shall
have required a change of the Exercise Price by at least $0.01,
but when the cumulative net effect of more than one adjustment so
determined shall be to change the Exercise Price by at least
$0.01, such full change in the Exercise Price shall thereupon be
given effect. No adjustment shall be made by reason of the
issuance of shares upon conversion rights currently outstanding
or any change in the number of treasury shares held by the
Company.
Incidental Registration.
(a) Each time the Company shall propose the
registration except on Form S-4 or S-8 under the
Act of any securities of the Company, the Company
shall give written notice of such proposed
registration to the Holder as reflected on its
records. The Company will include in any such
Registration Statement any of its shares of Common
Stock held by any Holder who within 30 days after
receipt of such notice shall request inclusion.
(b) If the managing underwriter of such registration
advises the Company in writing that in its opinion the
total number or dollar amount of securities requested
to be included in such registration exceeds the number
or dollar amount of shares of Common Stock that can be
sold in such offering, the Company will include in such
offering: (1) first, all shares of Common Stock the
Company proposes to sell; (2) second, up to the full
number or dollar amount of shares of Common Stock
requested by the Holder to be included in such
registration in excess of the number or total dollar
amount of shares of Common Stock the Company proposes
to sell which, in the opinion of such underwriter, can
be sold, allocated pro rata among all the Company's
shareholders (including each Holder on the basis of the
number of shares of Common Stock requested to be
included therein by each such Holder).
(c) Upon the occurrence of each such proposed
registration, unless the Company shall determine to
terminate each registration in toto, the Company will
(i) use its best efforts to effect registration under
the Act of the Common Stock which the Company has been
requested to register; (ii) use its best efforts to
have such Registration Statement declared effective;
(iii) notify the Holder requesting registration
promptly after it shall receive notice thereof, of the
time when such Registration Statement has been filed;
(iv) notify the Holder promptly of any request by the
Securities and Exchange Commission (hereinafter
referred to as the "Commission") for the amending or
supplementing of such Registration Statement or
prospectus or for additional information; (v) prepare
and file with the Commission, promptly on the Holder's
request any amendments or supplements to such
Registration Statement or prospectus which, in the
opinion of counsel for the Holder, may be reasonably
necessary in connection with the distribution of the
Securities by the Holder; (vi) prepare and promptly
file with the Commission and promptly notify the Holder
of the filing of such amendment or supplement to such
Registration Statement or prospectus as may be
necessary to correct any statement or omission, if at
any time when a prospectus relating to any Security is
required to be delivered under the Act, any event shall
have occurred as a result of which any such prospectus
or any other prospectus as then in effect would include
an untrue statement of a material fact or omit to state
any material fact necessary to make the statements
therein not misleading; (vii) in case the Holder or any
underwriter for the Holder is required to deliver a
prospectus, at a time when the prospectus then in
effect may no longer be used under the Act, prepare
promptly upon request such amendment or amendments to
such Registration Statement and such prospectus or
prospectuses as may be necessary to permit compliance
with the requirements of Section 10 of the Act; (viii)
not file any amendment or supplement to the
Registration Statement or prospectus to which the
Holder shall reasonably object based upon information
contained therein after having been furnished a copy
within a reasonable time prior to the filing thereof;
(ix) advise the Holder promptly after it shall receive
notice or obtain knowledge thereof of the issuance of
any stop order by the Commission suspending the
effectiveness of any such Registration Statement or of
the initiation or threatening of any proceeding for
that purpose and promptly use its best efforts to
prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; (x) use
its best efforts to qualify the Common Stock for
transfer under the securities laws in such states as
the Holder may reasonably designate, except that it
shall not be required in connection therewith or as a
condition thereof to execute a general consent to
service or to qualify to do business in any such
states; and (xi) furnish to the Holder as soon as
available copies of any such Registration Statement and
each preliminary or final prospectus, or supplement
required to be prepared pursuant to this Paragraph (a),
all in such quantities as the Holder may from time to
time reasonably request.
(d) The Company will pay all costs and expenses
incident to the performance of its obligations under
this Paragraph (a), including the fees and expenses of
its counsel and one special counsel selected by the
Holder(s) offering Securities, the fees and expenses of
its accountants, all other costs and expenses incident
to the preparation, printing and filing under the Act
of any such Registration Statement, each prospectus and
all amendments and supplements thereof, the costs
incurred in connection with the qualification of the
Securities under the laws of various jurisdictions
(including fees and disbursement of its counsel), the
cost of furnishing to the Holder copies of any such
Registration Statement, each preliminary prospectus,
the final prospectus and each amendment and supplement
thereto, all expenses incident to delivery of the
Securities to any underwriter or underwriters, but not
any underwriting commissions charged to the Holder.
Indemnification. The Company will indemnify and hold
harmless each Holder and any underwriter (as defined in
the Act) for such Holder and each person, if any, who
controls the Holder or underwriter within the meaning of
the Act against any losses, claims, damages or
liabilities (or actions in respect thereof), joint or
several, to which the Holder or underwriter or such
controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) are caused by
any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement
under which the Securities were registered under the Act,
any prospectus contained therein, or any amendment or
supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse
the Holder, underwriter and each such controlling person
for any legal or other expenses reasonably incurred by
the Holder, underwriter or controlling person in
connection with investigating or defending any such loss,
claim, damage, liability or actions in respect thereof;
provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim,
damage, expense or liability arises out of or is based
upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with
written information furnished by the Holder or
underwriter in writing specifically for use in the
preparation thereof.
Each Holder will indemnify and hold harmless the Company,
each of its directors, each of its officers who have
signed said Registration Statement and each underwriter,
and each person, if any, who controls within the meaning
of the Act, the Company or any underwriter against any
losses, claims, damages or liabilities or actions in
respect thereof to which the Company, or any such
director, officer, underwriter or controlling person may
become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions
in respect thereof) are caused by any untrue or alleged
untrue statement of any material fact contained in said
Registration Statement, said prospectus, or amendment or
amendments or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or
omission or alleged omission was so made or not made in
reliance upon and in conformity with written information
furnished by the Holder for use in the preparation
thereof; and will reimburse any legal or other expense
reasonably incurred by the Company or any such director,
officer, underwriter or controlling person in connection
with investigating or defending any such loss, claim,
damage, liability or action.
Promptly after receipt by an indemnified party pursuant
hereto of notice of any claims to which indemnity would
apply or the commencement of any action, such indemnified
party will, if a claim thereof is to be made against the
indemnifying party pursuant hereto, notify the
indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any
indemnified party otherwise than hereunder. In case such
action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party. In the latter
event the indemnifying party shall pay his own expenses
and counsel fees.
Rule 144 Covenants. With a view to making available to
each Holder the benefit of Rule 144 promulgated under the
Act (which term as used herein includes the present Rule
144 and any other, additional, substitute, supplemental,
or analogous rule or regulation of the Commission which
may at any time permit a Holder to sell securities to the
public exempt from registration), the Company agrees (i)
if the Company's securities have been registered under
Section 12 or Section 15 of the Securities Exchange Act
of 1934, as amended, and such registration is not then
withdrawn or suspended, to file with the Commission in a
timely manner all reports and other documents required to
be filed by an issuer of securities registered under the
Securities Exchange Act of 1934, as amended, so as to
maintain the availability of Rule 144 to the Holders;
(ii) as its expense, forthwith upon any Holder's request,
to deliver to any Holder a certificate, signed by one of
the Company's principal officers, stating (A) Company's
name, address and telephone number (including area code),
(B) Company's Internal Revenue Service identification
number, (C) Company's Securities and Exchange Commission
file number, (D) the number of shares of Common Stock
outstanding as shown by the most recent report or
statement published by the Company and (E) whether
Company has filed the reports required to be filed under
the Securities Exchange Act of 1934, as amended, for a
period of at least 90 days prior to the date of such
certificate and in addition has filed the most recent
annual report required to be filed thereunder and (F)
such other or additional information as shall be
necessary to make available to the Holder the ability to
offer and sell the maximum number of shares under Rule
144; and (iii) when Rule 144 is being complied with or
the holding period for unaffiliated security holders
shall have expired, to deliver securities not bearing any
legend restricting transfer of such securities (to the
extent then permitted by rules or interpretations of the
staff of the Commission), as may be requested from time
to time by any Holder.
Transfer without Registration. The Securities shall not
be transferred, and the Company shall not be required to
register any transfer of the Securities on the books of
the Company, unless the Company shall have been provided
with an opinion of counsel satisfactory to it prior to
such transfer that registration under the Securities Act
and applicable state securities laws is not required in
connection with the transaction resulting in such
transfer; provided, however, that no such opinion of
counsel shall be required in order to effectuate a
transfer pursuant to an effective Registration of the
Securities. Each certificate issued upon any transfer of
the Securities transferred as above provided shall bear
an appropriate investment legend, except that such
certificate shall not bear such restrictive legend if the
opinion of counsel referred to above is to the further
effect that such legend is not required in order to
establish compliance with the provisions of the
Securities Act or if such transfer is made in accordance
with the provisions of Rule 144 promulgated under the
Securities Act.
LEGEND AND STOP TRANSFER ORDERS. UNLESS THE SHARES OF WARRANT
STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, UPON
EXERCISE OF ANY OF THIS WARRANT AND THE ISSUANCE OF ANY OF THE
SHARES OF WARRANT STOCK, THE COMPANY SHALL INSTRUCT ITS TRANSFER
AGENT, IF ANY, TO ENTER STOP TRANSFER ORDERS WITH RESPECT TO SUCH
SHARES, AND ALL CERTIFICATES REPRESENTING SHARES OF WARRANT STOCK
SHALL BEAR ON THE FACE THEREOF SUBSTANTIALLY THE FOLLOWING
LEGEND:
NEITHER THIS WARRANT NOR ANY SHARES OF STOCK ISSUABLE UPON
CONVERSION OF THIS WARRANT, IF APPLICABLE, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
HOLDER MAY NOT TRANSFER THIS WARRANT NOR THE SHARES ISSUABLE
UPON CONVERSION OF THIS WARRANT, IF APPLICABLE, UNLESS (A)
THERE IS AN EFFECTIVE REGISTRATION COVERING THE SHARES
REPRESENTED BY THIS CERTIFICATE OR SUCH UNDERLYING SHARES,
AS THE CASE MAY BE, UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS, (B) THE
COMPANY FIRST RECEIVES A LETTER FROM AN ATTORNEY STATING
THAT IN THE OPINION OF THE ATTORNEY THE PROPOSED TRANSFER IS
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND UNDER ALL APPLICABLE STATE SECURITIES LAWS,
OR (C) THE TRANSFER IS MADE PURSUANT TO RULE 144 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
AMENDMENTS AND WAIVERS. ANY TERM OF THIS WARRANT MAY BE AMENDED
AND THE OBSERVANCE OF ANY TERM OF THIS WARRANT MAY BE WAIVED
(EITHER GENERALLY OR IN A PARTICULAR INSTANCE AND EITHER
RETROSPECTIVELY OR PROSPECTIVELY), WITH THE WRITTEN CONSENT OF
THE COMPANY AND THE HOLDER.
NOTICES. ANY NOTICE OR OTHER COMMUNICATION REQUIRED OR PERMITTED
TO BE GIVEN HEREUNDER SHALL BE IN WRITING AND SHALL BE MAILED BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR DELIVERED AGAINST
RECEIPT, IF TO THE HOLDER, AT ITS ADDRESS AS SHOWN ON THE BOOKS
OF THE COMPANY, AND IF TO THE COMPANY, AT ITS PRINCIPAL OFFICE,
00 XXXX XXXXX XXXXXX, XXXX, XX 00000. ANY NOTICE OR OTHER
COMMUNICATION GIVEN BY CERTIFIED MAIL SHALL BE DEEMED GIVEN AT
THE TIME OF CERTIFICATION THEREOF, EXCEPT FOR A NOTICE CHANGING A
PARTY'S ADDRESS WHICH SHALL BE DEEMED GIVEN AT THE TIME OF
RECEIPT THEREOF.
BINDING EFFECT. THE PROVISIONS OF THIS WARRANT SHALL BE BINDING
UPON AND INURE TO THE BENEFIT OF (A) THE PARTIES HERETO, (B) THE
SUCCESSORS AND ASSIGNS OF THE COMPANY, (C) IF THE HOLDER IS A
CORPORATION, PARTNERSHIP, OR OTHER BUSINESS ENTITY, THE
SUCCESSORS AND ASSIGNEE OF THE HOLDER, AND (D) IF THE HOLDER IS A
NATURAL PERSON, THE ASSIGNEES, HEIRS, AND PERSONAL REPRESENTATIVE
OF THE HOLDER.
[Remainder of the page intentionally left blank.]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by a duly authorized officer and effective as of this [__] day of
June, 2001.
CHAPEAU, INC.
By: _____________________________
Name:
Title:
EXHIBIT A
WARRANT EXERCISE FORM
To: Chapeau, Inc.
Please xxxx one box.
[] The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing _____ shares of Common Stock
of Chapeau, Inc. and hereby makes payment of $_______ in payment
therefor.
[] The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing __________ shares of Common
Stock of Chapeau, Inc., and herewith elects to pay for such
shares by reducing the number of shares issuable thereunder in
accordance with Section 1.2 of the Warrant. The undersigned
hereby authorizes Chapeau, Inc. to make the required calculation
under Section 1.2 of the Warrant.
Dated: ___________
__________________________
Name of Holder
By:_______________________
Signature of Holder
Address _____________________
_____________________
_____________________
