WARRANT AGREEMENT
Pultronex Corporation, a Nevada corporation (Company), and American Securities
Transfer & Trust, Inc. (AST), 00000 Xxxx Xxxxxxx Xxxxxxx, Xxxxx X-0, Xxxxxxxx,
Xxxxxxxx 00000, a Colorado corporation (Warrant Agent), agree as follows:
1. PURPOSE. The Company has offered and sold _____ Common Stock Purchase
Warrants permitting the purchase of _______ Shares (Warrant).
2. WARRANTS. Each Warrant will entitle the registered holder of a Warrant
(Warrant Holder) to purchase from the Company one (1) Share at $2.00 per
share (Exercise Price). A Warrant Holder may exercise all or any number of
Warrants resulting in the purchase of a whole number of Shares.
3. EXERCISE PERIOD. The Warrants may be exercised at any time during the
period commencing on the date of issuance and ending at 3:00 p.m., Denver
Colorado time on the last day of the eighteenth (18th) month following the
date on which the Company's common stock is listed for trading on the
National Association of Securities Dealers, Inc., OTC Electronic Bulletin
Board Market or other NASDAQ market or national recognized exchange
(Expiration Date) except as changed by Section 12 of this Agreement. The
Company shall provide AST with written notice of such listing on or before
the next business day. After the Expiration Date, any unexercised Warrants
will be void and all rights of Warrant Holders shall cease.
4. CERTIFICATES. The Warrant Certificates shall be in registered form only and
shall be substantially in the form set forth in Exhibit A attached to this
Agreement. Warrant Certificates shall be signed by, or shall bear the
facsimile signature of, the President or a Vice President of the Company
and the Secretary or an Assistant Secretary of the Company and shall bear a
facsimile of the Company's corporate seal. If any person, whose facsimile
signature has been placed upon any Warrant Certificate or the signature of
an officer of the Company, shall have ceased to be such officer before such
Warrant Certificate is countersigned, issued and delivered, such Warrant
Certificate shall be countersigned, issued and delivered with the same
effect as if such person had not ceased to be such officer. Any Warrant
Certificate may be signed by, or made to bear the facsimile signature of,
any person who at the actual date of the preparation of such Warrant
Certificate shall be a proper officer of the Company to sign such Warrant
Certificate even though such person was not such an officer upon the date
of the Agreement.
5. COUNTERSIGNING. Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent hereby is authorized to countersign and
deliver to, or in accordance with the instructions of, any Warrant Holder
any Warrant Certificate which is properly issued.
78
6. REGISTRATION OF TRANSFER AND EXCHANGES. Subject to the provisions of
Section 4, the Warrant Agent shall from time to time register the transfer
of any outstanding Warrant Certificate upon records maintained by the
Warrant Agent for such purpose upon surrender of such Warrant Certificate
to the Warrant Agent for transfer, accompanied by appropriate instruments
of transfer in form satisfactory to the Company and the Warrant Agent and
duly executed by the Warrant Holder or a duly authorized attorney. Upon any
such registration of transfer, a new Warrant Certificate shall be issued in
the name of and to the transferee and the surrendered Warrant Certificate
shall be cancelled.
7. EXERCISE OF WARRANTS.
a. Any one Warrant or any multiple of one Warrant evidenced by any
Warrant Certificate may be exercised upon any single occasion on or
after the Exercise Date, and on or before the Expiration Date. A
Warrant shall be exercised by the Warrant Holder by surrendering to
the Warrant Agent the Warrant Certificate evidencing such Warrant with
the exercise form on the reverse of such Warrant Certificate duly
completed and executed and delivering to the Warrant Agent, by good
check or bank draft payable to the order of the Company, the Exercise
Price for each Share to be purchased.
b. Upon receipt of a Warrant Certificate with the exercise form thereon
duly executed together with payment in full of the Exercise Price for
the Shares for which Warrants are then being exercised, the Warrant
Agent shall requisition from any transfer agent for the Shares, and
upon receipt shall make delivery of, certificates evidencing the total
number of whole Shares for which Warrants are then being exercised in
such names and denominations as are required for delivery to, or in
accordance with the instructions of, the Warrant Holder. Such
certificates for the Shares shall be deemed to be issued, and the
person whom such Shares are issued of record shall be deemed to have
become a holder of record of such Shares, as of the date of the
surrender of such Warrant Certificate and payment of the Exercise
Price, whichever shall last occur, provided that if the books of the
Company with respect to the Shares shall be deemed to be issued, and
the person to whom such Shares are issued of record shall be deemed to
have become a record holder of such Shares, as of the date on which
such books shall next be open (whether before, on or after the
Expiration Date) but at the Exercise Price, whichever shall have last
occurred, to the Warrant Agent.
c. If less than all the Warrants evidenced by a Warrant Certificate are
exercised upon a single occasion, a new Warrant Certificate for the
balance of the Warrants not so exercised shall be issued and delivered
to, or in accordance with, transfer instructions properly given by the
Warrant Holder until the Expiration Date.
d. All Warrant Certificates surrendered upon exercise of the Warrants
shall be cancelled.
e. Upon the exercise, or conversion of any Warrant, the Warrant Agent
shall promptly deposit the payment into an escrow account established
by mutual agreement of the Company and the Warrant Agent at a
federally insured commercial bank. All funds deposited in the escrow
account will be disbursed on a weekly basis to the Company once they
have been determined by the Warrant Agent to be collected funds. No
interest will be paid to the issuer on these funds. Once the funds are
determined to be collected, the Warrant Agent shall cause the share
certificate(s) representing the exercised Warrants to be issued.
f. Expenses incurred by American Securities Transfer & Trust, Inc. while
acting in the capacity as Warrant Agent will be paid by the Company.
These expenses, including delivery of exercised share certificate to
the shareholder, will be deducted from the exercise fee submitted
prior to distribution of funds to the Company. A detailed accounting
statement relating to the number of shares exercised, names of
registered Warrant Holder(s) and the net amount of exercised funds
remitted will be given to the Company with the payment of each
exercise amount.
g. At the time of exercise of the Warrant(s), the transfer fee is to be
paid by the Company. The fee will be deducted from the proceeds prior
to distribution to the Company.
8. TAXES. The Company will pay all taxes attributable to the initial issuance
of Shares upon exercise of Warrants. The Company shall not, however, be
required to pay any tax which may be payable in respect to any transfer
involved in any issue of Warrant Certificates or in the issue of any
certificates of Shares in the name other than that of the Warrant Holder
upon the exercise of any Warrant.
79
9. MUTILATED OR MISSING WARRANT CERTIFICATES. On receipt by the Company and
the Warrant Agent of evidence satisfactory as to the ownership of and the
loss, theft, destruction or mutilation of any Warrant Certificate, the
Company shall execute and the Warrant Agent shall countersign and deliver
in lieu thereof, a new Warrant Certificate representing an equal aggregate
number of Warrants. In the case of loss, theft or destruction of any
Warrant Certificate, the Registered Owner requesting issuance of a new
Warrant Certificate shall be required to secure an indemnity bond from an
approved surety bonding company. In the event a Warrant Certificate is
mutilated, such Certificate shall be surrendered and canceled by the
Warrant Agent prior to delivery of a new Warrant Certificate. Applicants
for a substitute Warrant Certificate shall also comply with such other
regulations and pay such other reasonable charges as the Warrant Agent may
prescribe.
10. RESERVATION OF SHARES. For the purpose of enabling the Company to satisfy
all obligations to issue Shares upon exercise of Warrants, the Company will
at all times reserve and keep available free from preemptive rights, out of
the aggregate of its authorized but unissued shares, the full number of
Shares which may be issued upon the exercise of the Warrants will upon
issue be fully paid and nonassessable by the Company and free from all
taxes, liens, charges and security interests with respect to the issue
thereof.
11. GOVERNMENTAL RESTRICTIONS. If any Shares issuable upon the exercise of
Warrants require registration or approval of any governmental authority,
the Company will endeavor to secure such registration or approval; provided
that in no event shall such Shares be issued, and the Company shall have
the authority to suspend the exercise of all Warrants, until such
registration or approval shall have been obtained; but all Warrants, the
exercise of which is requested during any such suspension, shall be
exercisable at the Exercise Price. If any such period of suspension
continues past the Expiration Date, all Warrants, the exercise of which
have been requested on or prior to the Expiration Date, shall be
exercisable upon the removal of such suspension until the close of business
on the business day immediately following the expiration of such
suspension.
12. ADJUSTMENTS. If prior to the exercise of any Warrants, the Company shall
have effected one or more stock split-ups, stock dividends or other
increases or reductions of the number of shares of its $____ par value
common stock outstanding without receiving compensation therefore in money,
services or property, the number of shares of common stock subject to the
Warrant granted shall, (i) if a net increase shall have been effected in
the number of outstanding shares of the Company's common stock, be
proportionately increased, and the cash consideration payable per share
shall be proportionately reduced, and, (ii) if a net reduction shall have
been effected in the number of outstanding shares of the Company's common
stock, be proportionately reduced and the cash consideration payable per
share be proportionately increased.
13. NOTICE TO WARRANT HOLDERS. Upon any adjustment as described in Section 13,
the Company within 20 days thereafter shall (i) cause to be filed with the
Warrant Agent a certificate signed by a Company officer setting forth the
details of such adjustment, the method of calculation and the facts upon
which such calculation is based, which certificate shall be conclusive
evidence of the correctness of the matters set forth therein, and (ii)
cause written notice of such adjustments to be given to each Warrant Holder
as of the record date applicable to such adjustment. Also, if the Company
proposes to enter into any reorganization, reclassification, sale of
substantially all of its assets, consolidation, merger, dissolution,
liquidation or winding up, the Company shall give notice of such fact at
least 20 days prior to such action to all Warrant Holders which notice
shall set forth such facts as indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the Exercise
Price and the kind and amount of the shares or other securities and
property deliverable upon exercise of the Warrants. Without limiting the
obligation of the Company hereunder to provide notice to each Warrant
Holder, failure of the Company to give notice shall not invalidate any
corporate action taken by the Company.
14. NO FRACTIONAL WARRANTS OR SHARES. The Company shall not be required to
issue fractions of Warrants upon the reissue of Warrants, any adjustments
as described in Section 13 or otherwise; but the Company in lieu of issuing
any such fractional interest, shall round up or down to the nearest full
Warrant. If the total Warrants surrendered by exercise would result in the
issuance of a fractional share, the Company shall not be required to issue
a fractional share but rather the aggregate number of shares issuable will
be rounded up or down to the nearest full share.
80
15. RIGHTS OF WARRANT HOLDERS. No Warrant Holder, as such, shall have any
rights of a shareholder of the Company, either at law or equity, and the
rights of the Warrant Holders, as such, are limited to those rights
expressly provided in this Agreement or in the Warrant Certificates. The
Company and the Warrant Agent may treat the registered Warrant Holder in
respect of any Warrant Certificates as the absolute owner thereof for all
purposes notwithstanding any notice to the contrary.
16. WARRANT AGENT. The Company hereby appoints the Warrant Agent to act as the
agent of the Company and the Warrant Agent hereby accepts such appointment
upon the following terms and conditions by all of which the Company and
every Warrant Holder, by acceptance of his Warrants, shall be bound:
a. Statements contained in this Agreement and in the Warrant Certificates
shall be taken as statements of the Company. The Warrant Agent assumes
no responsibility for the correctness of any of the same except such
as describes the Warrant Agent or for action taken or to be taken by
the Warrant Agent.
b. The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the Company's covenants contained in
this Agreement or in the Warrant Certificates.
c. The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall
incur no liability or responsibility to the Company or to any Warrant
Holder in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the
advice of such counsel, provided the Warrant Agent shall have
exercised reasonable care in the selection and continued employment of
such counsel.
d. The Warrant Agent shall incur no liability or responsibility to the
Company or to any Warrant Holder for any action taken in reliance upon
any notice, resolution, waiver, consent, order, certificate or other
paper, document or instrument believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
e. The Company agrees to pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes
and governmental charges and all other charges of any kind or nature
incurred by the Warrant Agent in the execution of this Agreement and
to indemnify the Warrant Agent and save it harmless against any and
all liabilities, including judgments, costs and counsel fees, for this
Agreement except as a result of the Warrant Agent's negligence or bad
faith.
f. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Warrant Holders
shall furnish the Warrant Agent with reasonable security and indemnity
for any costs and expenses which may be incurred in connection with
such action, suit or legal proceeding, but this provision shall not
affect the power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or
under any of the Warrants may be enforced by the Warrant Agent without
the possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Warrant Agent shall
be brought in its name as Warrant Agent, and any recovery of judgement
shall be for the ratable benefit of the Warrant Holders as their
respective rights or interest may appear.
g. The Warrant Agent and any shareholder, director, officer or employee
of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
81
17. SUCCESSOR WARRANT AGENT. Any corporation into which the Warrant Agent may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to
the Warrant Agent hereunder without the execution or filing of any paper or
any further act of a party or the parties hereto. In any such event or if
the name of the Warrant Agent is changed, the Warrant Agent or such
successor may adopt the countersignature of the original Warrant Agent and
may countersign such Warrant Certificates either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent.
18. CHANGE OF WARRANT AGENT. The Warrant Agent may resign or be discharged by
the Company from its duties under this Agreement by the Warrant Agent or
the Company, as the case may be, giving notice in writing to the other, and
by giving a date when such resignation or discharge shall take effect,
which notice shall be sent at least 30 days prior to the date so specified.
If the Warrant Agent shall resign, be discharged or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Warrant
Agent. If the Company shall fail to make such appointment within a period
of 30 days after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by any
Warrant Holder or after discharging the Warrant Agent, then any Warrant
Holder may apply to the District Court for Denver County, Colorado, for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such Court, the
duties of the Warrant Agent shall be carried out by the Company. Any
successor Warrant Agent, whether appointed by the Company or by such Court,
shall be a bank or a trust company, in good standing, organized under the
laws of the State of Colorado or of the United States of America, having
its principal office in Denver, Colorado and having at the time of its
appointment as Warrant Agent, a combined capital and surplus of at least
four million dollars. After appointment, the successor Warrant Agent shall
be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Warrant Agent without further act or deed
and the former Warrant Agent shall deliver and transfer to the successor
Warrant Agent any property at the time held by it thereunder, and execute
and deliver any further assurance, conveyance, act or deed necessary for
effecting the delivery or transfer. Failure to give any notice provided for
in the section, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor Warrant Agent, as the case may be.
19 NOTICES. Any notice or demand authorized by this Agreement to be given or
made by the Warrant Agent or by any Warrant Holder to or on the Company
shall be sufficiently given or made if sent by mail, first class, certified
or registered, postage prepaid, addressed (until another address is filed
in writing by the Company with the Warrant Agent), as follows:
Xxxx Xxxxxxx, President
Pultronex Corporation
0000 0xx Xx., Xxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Any notice or demand authorized by this Agreement to be given or made by
any Warrant Holder or by the Company to or on the Warrant Agent shall be
sufficiently given or made if sent by mail, first class, certified or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
American Securities Transfer & Trust, Inc.
00000 Xxxx Xxxxxxx Xxxxxxx, Xxxxx X-0
Xxxxxxxx Xxxxxxxx 00000
82
Any distribution, notice or demand required or authorized by this Agreement
to be given or made by the Company or the Warrant Agent to or on the Warrant
Holders shall be sufficiently given or made if sent by mail, first class,
certified or registered, postage prepaid, addressed to the Warrant Holders at
their last known addresses as they shall appear on the registration books for
the Warrant Certificates maintained by the Warrant Agent.
20. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant Agent may from time
to time supplement or amend this Agreement without the approval of any
Warrant Holders in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant
Agent may deem necessary or desirable.
21. SUCCESSORS. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
22 TERMINATION. This Agreement shall terminate at the close of business on the
Expiration Date or such earlier date upon which all Warrants have been
exercised; provided, however, that if exercise of the Warrants is suspended
pursuant to Section 12 and such suspension continues past the Expiration
Date, this Agreement shall terminate at the close of business on the
business day immediately following expiration of such suspension. The
provisions of Section 17 shall survive such termination.
23. GOVERNING LAW. This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of
Colorado and for all purposes shall be construed in accordance with the
laws of said State.
24. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to
give any person or corporation other than the Company, the Warrant Agent
and the Warrant Holders any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Warrant Holders.
25. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of such counterparts shall for all purposes be deemed to be an
original and all such counterparts shall together constitute but one and
the same instrument.
Date: December 9, 1999
Pultronex Corporation
a Nevada corporation
By: /s/ Xxxx Xxxxxxx /s/ Xxxxxxx Xxxxx
-------------------- -----------------
Xxxx Xxxxxxx, President Xxxxxxx Xxxxx, Secretary:
American Securities Transfer & Trust, Inc.
a Colorado corporation
By: /s/ Xxxx Xxxxx
------------------
Vice President: Xxxx Xxxxx Secretary:
83
