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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)*
CVI TECHNOLOGY, INC.
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(Name of Issuer)
Common Stock $.001 par value
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(Title of Class of Securities)
12660V 10 7
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(CUSIP Number)
Stacie L. Brown, 6744 South Spencer Street, Las Vegas, Nevada 89119;
Tel.: (702) 733-7195
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 30, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-l(b)(3) or (4), check the following box [ ]
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item l; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP No. 12660V 10 7 13D Page 2 of 21 Pages
________________________________________________________________________________
1. Name of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
James E. Crabbe
James E. Crabbe Revocable Trust
________________________________________________________________________________
2. Check the Appropriate Box If a Member of a Group (See Instructions)
(a) [_]
(b) [_]
________________________________________________________________________________
3. SEC Use Only
________________________________________________________________________________
4. Source of Funds (See Instructions)
Personal funds.
________________________________________________________________________________
5. Check If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
________________________________________________________________________________
6. Citizenship or Place of Organization
James E. Crabbe - United States
James E. Crabbe Revocable Trust - Oregon
________________________________________________________________________________
7. Sole Voting Power
NUMBER OF 7,367,909 shares
SHARES _________________________________________________________________
BENEFICIALLY 8. Shared Voting Power
OWNED BY 0,000,000 shares
EACH _________________________________________________________________
REPORTING 9. Sole Dispositive Power
PERSON 4,424,792 shares
WITH _________________________________________________________________
10. Shared Dispositive Power
0,000,000 shares
________________________________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting Person
7,367,909
________________________________________________________________________________
12. Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [_]
________________________________________________________________________________
13. Percent of Class Represented by Amount in Row (11)
67.88%
________________________________________________________________________________
14. Type of Reporting Person (See Instructions)
IN; OO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING
EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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This Amendment No. 2 amends the Schedule 13D dated June 7, 1999 (the
"Schedule 13D") and the Amendment No. 1 dated August 25, 1999, and September 22,
1999, (the "First Amendment") of James E. Crabbe and the James E. Crabbe
Revocable Trust with respect to the common stock, $.001 par value ("Common
Stock"), of CVI Technology, Inc., a Nevada corporation (the "Issuer"). Except as
specifically provided herein, this Amendment No. 2 does not modify any of the
information previously reported on the Schedule 13D or the First Amendment.
Item 3. Source of Funds or Other Considerations
Personal funds.
Item 4. Purpose of Transaction
The filing of this Amendment No. 2 to Schedule 13D is a result of a
loan to Issuer in the amount of $1,000,000 (the "Loan") by the James E. Crabbe
Revocable Trust (the "Trust"). In connection with the Loan, the Trust executed,
and Issuer accepted, the Subscription Agreement dated May 30, 2000. The Issuer
also executed a 9.5% Convertible Note due May 30, 2001 (the "Note") in favor of
the Trust, which may elect to convert the Note into 384,615 shares of Common
Stock at a conversion price of $2.60 per share. On May 30, 2000, Issuer also
executed a Warrant (the "Warrant") to purchase shares of Common Stock in favor
of the Trust for 250,000 shares of Common Stock.
Item 5. Interest in Securities of the Issuer
James E. Crabbe and the James E. Crabbe Revocable Trust
-------------------------------------------------------
Presently Owned Percentage(3)
--------------- -------------
Sole Voting Power 7,367,909(1) 67.88%
Shared Voting Power 0,000,000 0%
Sole Dispositive Power 4,424,792(2) 40.76%
Shared Dispositive Power 0,000,000 0%
Total Beneficial Power 7,367,909(1) 67.88%
--------
(1) This amount represents 3,138,570 shares of Common Stock owned by the James
E. Crabbe Revocable Trust, 2,943,117 shares of Common Stock, the voting power of
which Yvonne M. Huson transferred to James E. Crabbe pursuant to the Durable
Power of Attorney dated November 12, 1999, 459,300 shares of Common Stock
issuable to the James E. Crabbe Revocable Trust upon exercise of certain
Warrants, and 826,922 shares of Common Stock issuable to the James E. Crabbe
Revocable Trust upon conversion of 9.5% Convertible Notes.
(2) This amount represents 3,138,570 shares of Common Stock owned by the James
E. Crabbe Revocable Trust, 459,300 shares of Common Stock issuable to the James
E. Crabbe Revocable Trust upon exercise of certain Warrants, and 826,922 shares
of Common Stock issuable to the James E. Crabbe Revocable Trust upon conversion
of 9.5% Convertible Notes.
(3) These percentages reflect the percentage share ownership with respect to
10,854,799 shares, the number of shares of Common Stock outstanding as of May
31, 2000.
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Item 7. Material to be Filed as Exhibits
The Subscription Agreement dated May 30, 2000, by and between the James
E. Crabbe Revocable Trust and the Issuer is attached hereto as Exhibit "A". The
Note, as executed by Issuer, is attached hereto as Exhibit "B", and the Warrant,
as executed by Issuer, is attached hereto as Exhibit "C".
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 9, 1999
/s/ Stacie L. Brown
------------------------------------------
Stacie L. Brown, Attorney-In-Fact
for James E. Crabbe
JAMES E. CRABBE REVOCABLE TRUST
By: /s/ Stacie L. Brown
--------------------------------------
Stacie L. Brown, Attorney-In-Fact for
James E. Crabbe, Trustee
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EXHIBIT A
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made and entered into
as of the 30th day of May 2000, between CVI Technology, Inc., a Nevada
corporation (the "Company") and The James E. Crabbe Revocable Trust
("Purchaser") and is delivered and executed in connection with the Company's
sale of Units (as defined below).
1. DESCRIPTION OF UNITS
This Agreement sets forth the terms and conditions under which
Purchaser will purchase a Unit. Each Unit shall consist of (i) a 9.5%
convertible note due 2001 in the form attached hereto as Exhibit A in increments
of $50,000, and (ii) a warrant in the form attached hereto as Exhibit B to
purchase 12,500 shares of the Company's common stock (the "Common Stock") for
each $50,000 of principal amount of the Note purchased by Purchaser hereunder.
The issuance of Units by the Company is limited to accredited investors.
2. OFFER
(a) Purchaser, by signing this Agreement, hereby offers to
purchase 20 Unit(s) for One Million Dollars $1,000,000 (the "Investment
Amount"), consisting of (i) a Note in the principal amount of One Million
Dollars $1,000,000 and (ii) a Warrant to purchase 250,000 shares of Common
Stock.
(b) The Company shall have the right, at its sole and absolute
discretion, to reject this subscription offer, or to accept such offer. If the
Company accepts Purchaser's offer, the Company shall execute this Agreement and
return a copy of the Agreement, the Note and the Warrant to Purchaser. If the
Company rejects Purchaser's offer, the Company shall return to Purchaser this
Agreement, together with any payment made by Purchaser to the Company, without
interest or deduction.
3. RECEIPT OF DOCUMENTS
Purchaser hereby acknowledges receipt of a copy of: (1) this
Agreement; (2) the Note; (3) the Warrant; (4) the Company's Registration
Statement on Form S13-2/A dated October 16, 1998; (5) the Company's Quarterly
Annual Report on Form 10-KSB for the year ended December 31, 1999; and (6) the
Company's Report on Form 10-QSB for the quarter ended March 31, 2000
(collectively, the "Documents").
4. USE OF PROCEEDS; NO REFUNDS
The Investment Amount shall be used to for general working
capital purposes. Upon execution and delivery of this Agreement, the Investment
Amount shall not, under any circumstances, be refunded to Purchaser.
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5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and wan-ants to the Company as follows:
(a) Purchaser, either alone or through Purchaser's purchaser
representative (as that term is defined under Rule 501(h) of Regulation D under
the Securities Act of 1933, as amended (the "Securities Act") ("Purchaser's
Representative," herein)), if any, has had an opportunity to ask questions of
and receive answers from duly designated representatives of the Company
concerning the terms and conditions of this Agreement and has been afforded an
opportunity to examine such documents and other information which Purchaser or
Purchaser's Representative, if any, has requested for the purpose of answering
any question Purchaser or Purchaser's Representative, if any, may have
concerning the business and affairs of the Company.
(b) Purchaser's principal residence is located in the State of
Oregon. Purchaser has received and reviewed this Agreement and the Documents and
acknowledges the Company made available to Purchaser at a reasonable time prior
to the execution of this Agreement the opportunity to ask questions and receive
answers concerning the business and affairs of the Company and the terms and
conditions of the sale of the Unit(s) as contemplated by this Agreement and to
obtain any additional information (which the Company possesses or can acquire
without unreasonable effort or expense) as may be necessary to verify the
accuracy of information furnished to Purchaser. Purchaser (i) is able to bear
the loss of its entire investment without any material adverse effect on his
economic stability, and (ii) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
investment to be made by him pursuant to this Agreement.
(c) Purchaser and Purchaser's Representative, if any,
understand that the Units are being offered and sold only to "accredited
investors" (as that term is defined under Rule 501(a) of Regulation D), and
Purchaser represents that Purchaser is an accredited investor. Purchaser
understands the Company is relying on Purchaser with respect to the accuracy of
this representation.
(d) Purchaser and Purchaser's representative, if any,
understand that this Agreement may not comply with the information requirements
of Regulation D for offers and sales to non-accredited investors (see Regulation
D, Rule 502(b)), and, consequently, Purchaser understands the significance of
its representation to the Company that it is an accredited investor. Purchaser
and Purchaser's representative, if any, acknowledge that they were encouraged by
the Company to request all additional information which might be material or
important in order for Purchaser to make an informed investment decision with
respect to the Company.
(e) The Unit(s) are being purchased for investment purposes
only for such Purchaser's own account and not with the view to, or for resale in
connection with, any distribution or public offering thereof. Purchaser
understands that the Note and the Warrants have not been registered under the
Securities Act or any state securities laws by reason of their contemplated
issuance in transactions exempt from the registration requirements of the
Securities Act and applicable state securities laws, and that the reliance of
the Company and others upon these exemptions is predicated in part upon the
representation by Purchaser. Purchaser understands that the Unit, the Note
and/or the Warrant may not be transferred or resold without the prior approval
of the Company.
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(f) Purchaser has taken the time to carefully read this
Agreement, the Documents and any other information furnished to Purchaser by the
Company in connection with this Agreement.
(g) Purchaser was not solicited to purchase the Unit, the Note
and/or the Warrant by any means of general solicitation, including but not
limited to the following: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio; (ii) any meeting where attendees were
invited by any general solicitation or general advertising.
(h) Purchaser and Purchaser's Representative, if any, are
aware that the shares issuable upon conversion of the Note and exercise of the
Warrant are and will be, when issued, "restricted securities", as that term is
defined in Rule 144 (the "Rule") of the rules and regulations promulgated under
the Securities Act. Purchaser and Purchasers Representative, if any, are fully
aware of the applicable limitations on the resale of the resulting shares. The
Rule only permits sales of "restricted securities" held for not less than one
year upon compliance with the requirements of such Rule. If the Rule is
available to Purchaser, and representatives of the Company hereby advise
Purchaser that such availability is highly unlikely, Purchaser may make only
routine sales of the resulting shares in limited amounts in accordance with the
terms and conditions of the Rule. Purchaser is fully aware that in any event,
there is not likely to be any market for the resulting shares and that finding a
purchaser for the resulting shares could be extremely difficult.
(i) Purchaser and Purchaser's Representative, if any,
understand that any and all certificates representing the resulting shares shall
bear a legend substantially as follows, which legend Investor has read and
understands:
The Shares represented by this Certificate have not been
registered under the Securities Act of 1933 (the "Act") or the securities laws
of any state and are "restricted securities" as that term is defined in Rule 144
under the Act. Such Shares may not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration statement under the Act
and the applicable state securities laws or pursuant to an exemption from
registration thereunder, the availability of which is to be established to the
satisfaction of counsel to the issuer.
(j) Purchaser acknowledges that in making its investment
decision Purchaser has relied upon its examination of the Company and its
officers, directors and employees regarding the merits and risks involved.
Investor has consulted its own attorney, business or tax advisor as to legal,
business or tax advice.
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(k) Purchaser represents and wan-ants that Purchaser can bear
the economic risk of loss of Purchaser's entire investment in the Company.
Purchaser understands that an investment in the Company involves substantial
risks, including, without limitation, the risk factors described in the
Documents and the following:
(i) Need for Additional Financing. The Company, at
this time, has limited capital resources. To
continue operations, the Company may require
additional financing for working capital and
general business purposes. No assurance can be
given that the Company will obtain any additional
outside financing on terms that are favorable to
the Company or in amounts necessary to fund its
cash requirements.
(ii) Dilution. If the Company obtains additional
funds through private or public equity or debt
financings, and if Purchaser acquires common stock
through conversion of the Note or exercise of the
Warrant, Purchaser may experience substantial
dilution as a consequence of such future
financings, including, without limitation, a
reduction in his respective percentage ownership in
the Company.
(iii) Competition. The gaming and gaming related
products industry is characterized by intense
competition. Many of the Company's competitors have
far greater experience and financial resources than
the Company. No assurance can be given that the
Company will be able to compete effectively against
its competitors.
(iv) Dependence on Key Personnel. The Company's
success depends to a significant extent on the
performance of certain key personnel. The loss of
such key personnel could materially and adversely
affect the Company. The Company has not executed
employment agreements with all such key personnel.
(v) Limitations on Transferability. Transferability
of the Unit, the Note and the Wan-ant sold pursuant
to this Agreement will be restricted by the prior
express written approval. Purchaser will be
required to bear the economic risk of his
investment in the Company for an indefinite period
of time.
(vi) Absence of Market for the Shares. The Units
are being offered exclusively to accredited
investors for investment purposes only. There will
be no public market for the Unit, the Note and the
Warrant. Although the Company intends to cause its
common stock to begin trading, there is no
assurance that this will occur. Accordingly, the
Unit the Note and the Warrant are not liquid
investments. The Units are only suitable for
persons who have substantial financial resources,
have no need for liquidity in their investment in
the Company and who are prepared to lose their
investment in the Company in its entirety.
4
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(vii) Tax Risks. An investment in the Units may
involve material and substantial tax consequences
to Purchaser. Purchaser is urged to consult with
tax counsel and/or a tax accountant or Purchaser's
own choice concerning the tax consequences
particular to Purchaser which may arise from
subscribing to, holding and/or disposing of the
Unit, the Note and the Warrant.
6. INDEMNEFICATION BY PURCHASER
Purchaser agrees that it shall indemnify and hold harmless the
Company and its officers, directors, employees, agents and professional advisors
from and against any and all loss, damage, liability, or expense, including
costs and reasonable attorneys' fees, that the foregoing, or any of them, may
incur by reason of, or in connection with, any misrepresentation, inaccurate
statement or material omission made by Purchaser herein, any breach of any of
Purchaser's warranties, or any failure on Purchaser's part to fulfill any of
Purchaser's covenants, agreements or obligations set forth herein.
7. AUTHORIZATION
Purchaser hereby authorizes the Company and its officers,
employees and agents to investigate Purchaser's personal and business background
including, without limitation, communication with any employer, former employer,
business associate, government agency, bank or other credit reference. Purchaser
hereby authorizes any person, organization or entity that may have any knowledge
or information Purchaser personal or business background to provide such
information to the Company as the Company may request.
8. NO BROKERS OR FINDERS
No person, firm or corporation has or will have, as a result
of any act or omission by such Purchaser, any right, interest or valid claim
against Purchaser or the Company for any commission, fee or other compensation
as a finder or broker, or in any similar capacity, in connection with the
transactions contemplated by this Agreement.
9. MISCELLANEOUS
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Nevada.
(b) This Agreement, the Note and the Warrant contain the
entire agreement between the Company and Purchaser with regard to the subject
matter hereof and may not be modified or waived except in a writing signed by
both the Company and Purchaser.
(c) The headings of this Agreement are for convenience and
reference only, and shall not limit or otherwise affect the interpretation of
any term or provision hereof.
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(d) This Agreement and the rights, powers, and duties set
forth herein shall, except as otherwise expressly provided herein, be binding
upon and inure to the benefit of, the heirs, executors, administrators, legal
representatives, successors, and assigns of the parties hereto.
(e) Purchaser may not assign any of Purchaser's rights or
interests in and under this Agreement without the prior written consent of the
Company, and any attempted assignment without such consent shall be null and
void and without any force or effect whatsoever.
(f) If any legal action or any arbitration or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it may be
entitled.
(g) This Agreement shall be construed in accordance with its
intent and without regard to any presumption or any other rule requiring
construction against the party causing the same to be drafted.
(h) If any provision of this Agreement, or any portion of any
provision, shall be deemed invalid or unenforceable for any reason whatsoever,
such invalidity or unenforceability shall not affect the enforceability and
validity of the remaining provisions hereof
IN WITNESS WHEREOF, the undersigned has executed this
Agreement as of the date first set forth above.
"PURCHASER"
THE JAMES E. CRABBE REVOCABLE TRUST
By: /s/ James E. Crabbe
-----------------------
James E. Crabbe, Trustee
Address: 121 SW Morrison Ste 1400
Portland, OR 97204
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ACCEPTANCE OF SUBSCRIPTION AGREEMENT
On this 30th day of May 2000, CVI Technology, Inc., a Nevada
corporation, hereby accepts offer of The James E. Crabbe Revocable Trust to
purchase 20 Unit(s) at $50,000 per Unit ($2.60 per share) for a total
subscription amount of $1,000,000.
CVI TECHNOLOGY, INC.
By: /s/ Steven J. Blad
-----------------------------
Steven J. Blad, President and
Chief Executive Officer
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EXHIBIT B
THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER THE
SECURITIES OR BLUE SKY LAWS OF ANY STATE, AND THIS NOTE MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION;
PROVIDED, HOWEVER, THAT THIS NOTE MAY BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
PURSUANT TO AN EXEMPTION FROM REGISTRATION OR QUALIFICATION.
CVI TECHNOLOGY, INC.
9.5% CONVERTIBLE NOTE DUE MAY 30, 2001
$1,000,000 May 30, 2000
FOR VALUE RECEIVED, the undersigned CVI Technology, Inc., a Nevada
corporation ("Obligor"), hereby promises to pay to the order of The James E.
Crabbe Revocable Trust or its registered assigns ("Holder") on May 30, 2001, the
principal sum of One Million and 00/100 Dollars ($1,000,000.00) and to pay
interest on the unpaid principal balance hereof from the date hereof at a rate
of 9.5% per annum, payable on May 30, 2001. Holder may, however, elect to extend
the payable date for up to four one-year periods. In such case, this Note will
be due May 30, 2002, May 30, 2003, May 30, 2004, or May 30, 2005, as Holder may
determine. Should Holder elect to extend the date payable, interest on this Note
shall be due, at Holder's option: (1) annually; or (2) upon either (a) Holder's
conversion of this Note; or (b) Obligor's repayment of this Note. This Note is
unsecured. At its discretion, Obligor may, at any time, redeem the Note without
penalty upon payment of' the face value of the Note and any unpaid and accrued
interest.
This Note is being issued as part of a Unit consisting of a Common
Stock Purchase Warrant (the "Warrant") to purchase up to 250,000 shares of
Obligor's common stock (the "Common Stock"). This Note and the Warrant are not
detachable unless and until the Note is converted in accordance herewith.
Exercise of certain rights under the Warrant are expressly subject to certain
conditions contained therein and herein.
<PAGE>
After expiration of one (1) year from the date of the Note, Holder is
entitled, at its option, to convert this Note into fully paid and non-assessable
shares of restricted $.001 par value common stock of the Obligor ("Common
Stock") at the conversion price of $2.60 per share (the "Conversion Price"),
subject to such adjustment or adjustments, if any, of such Conversion Price and
the Common Stock issuable upon conversion, upon surrender of this Note, duly
endorsed or assigned to Obligor or in blank, to Obligor, with the conversion
notice attached hereto, or accompanied by a separate written notice
substantially in the form of such conversion notice, duly executed by Holder and
stating that Holder elects to convert this Note, or if less than the entire
principal amount hereof is to be converted (but in not less than $25,000
increments), the portion hereof to be converted, all in accordance with the
provisions of the Subscription Agreement. No fractional shares will be issued on
conversion, but instead of any fractional interest, Obligor shall pay a cash
adjustment. If Obligor shall, prior to the conversion or payment of the Note in
full, (a) declare a dividend or make a distribution of its Common Stock payable
in shares of its Common Stock, (b) subdivide its outstanding shares of Common
Stock into a greater number of shares of Common Stock, or (c) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, or (d) issue any shares of capital stock of the Company by
reclassification or capital reorganization of its shares of Common Stock, then
the conversion privilege and the Conversion Price in effect immediately prior to
such action shall be adjusted so that the Holder of a Note thereafter converted
shall be entitled to receive the number and kind of shares of Common Stock or
other Capital Stock which the Holder would have owned or have been entitled to
receive immediately after such action had the Holder converted the Note
immediately prior to the record date in the case of (a), or the effective date
in the case of (b), (c) or (d).
Obligor shall prepare and, no sooner than nine months and no later than
twelve months after the date hereof, file with United States Securities and
Exchange Commission (the "SEC"), an appropriate registration statement to effect
a registration of the Registrable Securities (as defined below) covering the
resale of the Registrable Securities issuable to Holder upon conversion of this
Note, which registration statement, to the extent allowable under the Securities
Act of 1933, as amended, and the rules promulgated thereunder (including Rule
416), shall state that such registration statement also covers such
indeterminate numbers of additional shares of Common Stock as may become
issuable upon conversion of the Note to prevent dilution resulting from stock
splits, stock dividends or similar transactions. The Company shall use its best
efforts to obtain effectiveness of the registration statement as soon as
practicable. For purposes of this Agreement, the term "Registrable Securities"
means the shares of Common Stock issued or issuable upon conversion of the Note
and any shares of capital stock issued or issuable as a dividend on or in
exchange for or otherwise with respect to any of the foregoing. All reasonable
expenses, other than underwriting discounts and commissions, incurred by Obligor
in connection with registrations, filings or qualifications pursuant to this
paragraph, including without limitation, all registration, listing and
qualification fees, printers and accounting fees, and the fees and disbursements
of counsel for Obligor, shall be borne by Obligor.
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Obligor may issue other indebtedness from time to time prior to or
hereafter that has a senior ranking to this Note in priority of payment, and
this Note will be subordinate in right of payment thereto. In the event any
action is taken to collect or enforce the indebtedness evidenced by this Note
(the "Indebtedness") or any part thereof, Obligor agrees to pay, in addition to
the principal and interest due and payable hereon, all costs of collecting this
Note, including reasonable attorneys' fees and expenses. These costs shall
include any expenses incurred by Holder in any bankruptcy, reorganization, or
other insolvency proceeding.
No delay or omission of Holder in exercising any right or rights, shall
operate as a waiver of such right or any other rights. A waiver on one occasion
shall not be construed as a bar to or waiver of any right or remedy on any
future occasion.
The liability of Obligor under this Note (and the liability of any
endorsers of this Note) shall not be discharged, diminished or in any way
impaired by (a) any waiver by Holder or failure to enforce or exercise rights
under any of the terms, covenants or conditions of this Note, (b) the granting
of any renewal, indulgence, extension of time to Obligor, or any other obligors
of the Indebtedness, or (c) the addition or release of any person or entity
primarily or secondarily liable for the Indebtedness.
In no event shall the interest rate charged or received hereunder at
any time exceed the maximum interest rate permitted under applicable law.
Payments of interest received by Holder hereunder which would otherwise cause
the interest rate hereunder to exceed such maximum interest rate shall, to the
extent of such excess, be deemed to be (and be deemed to have been contracted as
being) prepayments of principal and applied as such.
This Note shall be binding upon the undersigned and its successors and
assigns and shall inure to the benefit of Holder, its successors and assigns.
Every person and entity at any time liable for the payment of this Note hereby
waives demand, presentment, protest, notice of protest, notice of nonpayment due
and all other requirements otherwise necessary to hold them immediately liable
for payment hereunder.
This Note is governed by and shall be construed and enforced in
accordance with the laws of the State of Nevada.
Time is of the essence with respect to all of the terms and provisions
of this Note.
CVI TECHNOLOGY, INC.
By: /s/ Steven J. Blad
-----------------------------------------------------
Steven J. Blad, President and Chief Executive Officer
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NOTICE OF CONVERSION
To CVI Technology, Inc.:
The undersigned Holder of this 9.5% Convertible Note due May 30, 2001
(this "Note") hereby irrevocably exercises the option to convert
$________principal amount of this Note, into shares of restricted $.001 par
value common stock of CVI Technology, Inc. ("Common Stock"), in accordance with
the terms and conditions of this Note, and directs that the shares of restricted
Common Stock issuable and deliverable upon conversion be issued and delivered to
the undersigned unless a different name has been indicated below. If shares of
Common Stock are to be registered in the name of a person or entity other than
the undersigned, the undersigned will pay any transfer taxes payable with
respect thereto.
In the event that the shares of Common Stock are registered pursuant an
effective registration statement under the Securities Act of 1933, as amended,
the undersigned shall be issued shares of registered Common Stock, rather than
shares of restricted Common Stock.
Dated: _______________________________
ATTEST:_______________________________
Signed:_______________________________
By:___________________________________
Its:__________________________________
Address: _____________________________
City:_________________________________
State:_____________ Zip:_____________
Tax Identification No.: ______________
Complete the items below for registration of shares of Common Stock
only if otherwise than in name and address of The James E. Crabbe Revocable
Trust.
------------------------------------- ------------------------------------
(Name) (Address)
------------------------------------- ------------------------------------
(City, State, and Zip Code) (Tax Identification Number)
4
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EXHIBIT C
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAW. THIS WARRANT OR SUCH SHARES MAY
NOT BE SOLD, DISTRIBUTED, PLEDGED, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS: (A) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAW COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES; (B) THE
COMPANY (DEFINED BELOW) RECIEVES AN OPINION OF LEGAL COUNSEL FOR THE
HOLDER OF THIS WARRANT STATING THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION AND SUCH OPINION IS IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY; OR (C) PURSUANT TO RULE 144 UNDER SUCH
ACT.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
CVI TECHNOLOGY, INC.
THIS IS TO CERTIFY THAT, for value received, The James E. Crabbe
Revocable Trust (the "Holder") is entitled, during a specified period of time as
set forth in Section 3 herein (the "Exercise Period"), to purchase from CVI
Technology, Inc., a Nevada corporation (the "Company"), 250,000 fully paid and
nonassessable shares of the Company's common stock, par value $0.001 per share
(the "Common Stock"), at an exercise price per share as set forth in Section 1
herein (the "Exercise Price") (such number of shares and the Exercise Price
being subject to adjustment as provided herein). The term "Warrant," as used
herein, refers to this Warrant to Purchase Shares of Common Stock, the term
"Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder, and the term "Parties," as used herein, refers
collectively to the Holder and the Company. This Warrant is issuable only as
part of a Unit or Units consisting of certain $1,000,000 principal amount 9.5%
Convertible Note Due May 30, 2001, dated as of the same date hereof to Holder
(as "Purchaser") and the Company (as "Obligor") (collectively hereinafter the
"Convertible Note"). Each Unit shall consist of 12,500 Warrant Shares and
$50,000 principal amount in the form of the Convertible Note. This Warrant is
only exercisable after conversion of the Convertible Note.
TERMS AND CONDITIONS
This Warrant is subject to the following terms, provisions, and
conditions:
1. EXERCISE PRICE. The Exercise Price shall be $2.60 per share.
2. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the Holder,
in whole or in part (but in not less than 1,000 share increments), by the
surrender of this Warrant, together with an exercise agreement in the form
<PAGE>
attached hereto (the "Exercise Agreement"), duly completed and executed by the
Holder, to the Company during normal business hours on any business day at the
Company's principal executive offices (or such other location as the Company may
designate by notice to the Holder); and upon (a) the payment to the Company in
cash, by certified or official bank check or by wire transfer for the account of
the Company in the amount of the Exercise Price multiplied by the number of
Warrant Shares for which the Warrant is being exercised.
The Warrant Shares so purchased shall be deemed to be issued to the
Holder as the record owner of such Warrant Shares, as of the close of business
on the date on which this Warrant shall have been surrendered, the completed
Exercise Agreement shall have been delivered, and payment shall have been made
for such Warrant Shares as set forth above. Certificates for the Warrant Shares
so purchased, representing the aggregate number of shares specified in the
Exercise Agreement, shall be delivered to the Holder within a reasonable time,
not exceeding ten (10) business days, after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as may
be reasonably requested by the Holder and shall be registered in the name of the
Holder or such other name as shall be designated by the Holder. If this Warrant
shall have been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of such certificates,
deliver to the Holder a new warrant representing the number of Warrant Shares
with respect to which this Warrant shall not then have been exercised.
3. EXERCISE PERIOD. This Warrant may be exercised any time after May
30, 2001, and before 2:00 p.m., Las Vegas, Nevada time, one year after either
the conversion of the Convertible Note or the Company's repayment of the debt
represented by the Convertible Note (the "Exercise Period").
4. CONDITIONS PRECEDENT CALL AND REDEMPTION. Notwithstanding anything
else herein to the contrary,
(a) The Warrant is not exercisable unless Holder has exercised
fully the conversion option under the Convertible Note.
(b) This Warrant may be called and redeemed, if not previously
exercised after the Company gives written notice to Holder of the
Company's election to call and redeem (the "Redemption Notice") the
Warrant and if, within thirty 130 days of such Redemption Notice,
Holder has not exercised the Warrant pursuant to the terms hereof. In
no event may the Company elect to redeem the Warrant prior to May 30,
2001. In the event of such redemption, the Company must pay to Holder
consideration equal to the par value of the shares issuable pursuant to
the Warrant.
5. CERTAIN AMENDMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares shall, upon
issuance in accordance with the terms of this Warrant be validly
issued, fully paid, and non-assessable.
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<PAGE>
(b) RESERVATION OF SHARES. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the
purpose of issuance upon exercise of this Warrant, a sufficient number
of shares of Common. Stock to provide for the exercise of this Warrant.
(c) SUCCESSORS AND ASSIGNS. This Warrant shall be binding upon
any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all the Company's assets.
6. ADJUSTMENT PROVISIONS. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Section 6. If the Company shall, prior to the
conversion or payment of the Note in full, (a) declare a dividend or make a
distribution of its Common Stock payable in shares of its Common Stock (b)
subdivide its outstanding shares of Common Stock into a greater number of shares
of Common Stock or (c) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (d) issue any shares of capital
stock of the Company by reclassification or capital reorganization of its shares
of Common Stock, then the conversion privilege and Exercise Price in effect
immediately prior to such action shall be adjusted so that the Holder shall be
entitled to receive the number and kind of shares of Common Stock or other
Capital Stock which the Holder would have owned or have been entitled to receive
immediately after such action had the Holder exercised the Warrant immediately
prior to the record date in the case of (a), or the effective date in the case
of (b), (c) or (d). In the event did any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise Price shall be
rounded up to the nearest cent.
7. PAYMENT OF EXPENSES. The Company and the Holder shall each be
responsible for their own costs and expenses payable in connection with (a) the
negotiation, preparation, execution and delivery of this Agreement and the other
agreements to be executed in connection herewith; and (b) the issuance of
certificates for Warrant Shares upon the exercise of this Warrant. The Company
shall pay any issuance tax in connection with the issuance of certificates for
Warrant Shares; provided, however, that the Holder shall be responsible for any
income or other taxes in connection with such issuance.
8. NO RIGHTS OR LIABILITIES AS A STOCKHOLDER. This Warrant shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the Holder to purchase Warrant Shares, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Exercise Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
9. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT. This Warrant, nor
any interest in this Warrant, may be sold, distributed, assigned, offered,
pledged or otherwise transferred without the express written consent of the
Company.
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<PAGE>
(a) EXCHANGE OF WARRANTS; REPLACEMENTS OF WARRANTS. This
Warrant is exchangeable upon the surrender hereof by the Holder to the
Company at its office for new warrants of like tenor and date
representing in the aggregate the right to purchase the number of
shares of Common Stock purchasable hereunder, each of such new Warrants
to represent the right to purchase such number of shares of Common
Stock (not to exceed the aggregate total number purchasable hereunder)
as shall be reasonably designated by the Holder at the time of such
surrender. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction, or mutilation of
this Warrant, and, in case of loss, theft or destruction, of indemnity,
or security reasonably satisfactory to it, and upon surrender and
cancellation of this Warrant, if mutilated the Company will make and
deliver a new warrant of like tenor, in lieu of this Warrant.
(b) CANCELLATION: PAYMENT OF EXPENSES. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement
as provided in this Section 9, this Warrant shall be promptly canceled
by the Company. The Company and the Holder shall each be responsible
for their own costs and expenses payable in connection with the
preparation, execution, and delivery of new warrants pursuant to this
Section 9. The Holder shall be responsible for any tax which may be
payable in connection with any transfer of a certificate for Warrant
Shares.
(c) REGISTRAR. The Company shall maintain, at its principal
executive offices (or such other location as the Company may designate
by notice to the Holder), a registrar for this Warrant, in which the
Company shall record the name and address of the person in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
10. AMENDMENTS. No amendment or modification of this Warrant shall be
deemed effective unless and until such amendment or modification is an express
writing executed by both the Parties.
11. GOVERNING LAW. This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of Nevada without
regard to the body of law controlling conflicts of law. The parties hereto
hereby submit to the exclusive jurisdiction of the courts located in Las Vegas,
Nevada, with respect to any dispute arising under this Warrant and the
transactions contemplated hereby.
12. REGISTRATION RIGHTS.
(a) MANDATORY REGISTRATION. The Company shall prepare and, no
sooner than nine months and no later than twelve months after the
Issuance Date, file with United States Securities and Exchange
Commission (the "SEC") an appropriate registration statement to effect
a registration of the Registrable Securities (as defined below)
covering the resale of the Registrable Securities underlying this
Warrant, which registration statement, to the extent allowable under
the Securities Act of 1933, as amended, and the rules promulgated
thereunder (including Rule 416), shall state that such registration
statement also covers such indeterminate numbers of additional shares
of Common Stock as may become issuable upon conversion of the Warrants
(i) to prevent dilution resulting from stock splits, stock dividends or
similar transactions or (ii) by reason of changes in the Exercise Price
in accordance with the terms of this Warrant. The Company shall use its
best efforts to obtain effectiveness of the registration statement as
soon as practicable. For purposes of this Agreement, the term
"Registrable Securities" means the Warrant Shares issued or issuable
and any shares of capital stock issued or issuable as a dividend on or
in exchange for or otherwise with respect to any of the foregoing.
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(b) OBLIGATIONS OF THE HOLDER. It shall be a condition
precedent to the obligations of the Company to complete the
registration pursuant to this Warrant with respect to the Registrable
Securities of the Holder that such Holder shall furnish to the Company
such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such
documents and otherwise cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing
of the registration statement. At least three (3) business days prior
to the first anticipated filing date of the Registration Statement, the
Company shall notify the Holder of the information the Company requires
from each such Holder.
(c) EXPENSE OF THE REGISTRATION. All reasonable expenses,
other than underwriting discounts and commissions, incurred by the
Company in connection with registrations, filings or qualifications
pursuant to this Section 12, including without limitation, all
registration, listing and qualification fees, printers and accounting
fees, and the fees and disbursements of counsel for the Company, shall
be borne by the Company.
13. EXPIRATION DATE. This Warrant shall expire and become null and
void and of no further force or effect at 5:00 p.m. Las Vegas, Nevada time one
year after either the conversion of the Convertible Note or the Company's
repayment of the debt represented by the Convertible Note, but in no event later
than May 30, 2005.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
CVI TECHNOLOGY, INC.,
a Nevada corporation
BY: /S/ STEVEN J BLAD
-------------------------------
Steven J. Blad, President & CEO
Date: May 30, 2000
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<PAGE>
EXERCISE AGREEMENT
TO: CVI TECHNOLOGY, INC. (THE "COMPANY")
The undersigned, pursuant to the provisions set forth in the attached
Warrant to Purchase Shares of Common Stock (the "Warrant") hereby irrevocably
elects and agrees to purchase ____________ shares (the "Exercised Shares") of
the Company's common stock ("Common Stock") covered by the Warrant and makes
payment herewith in full therefor at the price per share provided by the Warrant
in cash or by certified or official bank check in the amount of
$________________. If said number of shares of Common Stock shall not be all the
shares purchasable under the Warrant, a new warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash. Please issue a certificate or
certificates for the Exercised Shares in the name of and pay any cash for any
fractional share to:
NAME: ___________________________________
SIGNATURE: ___________________________________
DATED: ___________________________________
ADDRESS: ___________________________________
___________________________________
NOTE: The above signature should correspond
exactly with the name on the face of the
Warrant.
6
