Warrant Certificate No. 2000-000
WARRANT TO PURCHASE _______ SHARES OF COMMON STOCK
SGI INTERNATIONAL INCORPORATED UNDER THE LAWS OF THE STATE OF UTAH
"The securities represented by this Certificate have not been registered under
the Securities Act of 1933 or any state securities law and may not be sold,
exchanged, hypothecated or transferred in any manner except in compliance with
Paragraph 4 hereof."
1. Grant of Warrant. This certifies that, effective July 11, 2000, __________,
the registered holder hereof (the "Warrantholder"), is entitled to purchase from
SGI International, a Utah corporation (the "Company"), at any time during the
Exercise Period as defined in Paragraph 2 hereof, at the purchase price per
Share of $0.22 (the "Warrant Price"), the number of shares of common stock, no
par value, of the Company set forth above (the "Shares"), subject to the terms
and conditions set forth herein.
2. Exercise of Warrant. The Warrant evidenced hereby may be exercised on or
after the earlier of (i) a date one (1) year from the date of grant, or (ii)
upon the effective state and federal registration of the common shares
underlying the warrant, in whole or in part, by presentation of this Warrant
certificate with the Warrant Exercise Form attached as Exhibit A-1 hereto, duly
executed and simultaneous payment of the Warrant Price at the principal office
of the Company. The "Exercise Period" shall be the earlier of the period of time
commencing on registration of the underlying shares with the State of California
and the SEC or one year after the date this Warrant is executed by Company and
ending on December 31, 2005.
3. Legend on Shares. Each certificate for Shares issued upon exercise of the
Warrant shall bear the following legend, unless, at the time of exercise, such
Shares are subject to a currently effective Registration Statement under the
Securities Act of 1933 (the "Act"):
"The securities represented by this Certificate have not been registered under
the Securities Act of 1933 or any state securities law and may not be sold,
exchanged, hypothecated or transferred in any manner except in compliance with
Paragraph 4 of the Warrant pursuant to which they were issued."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a Registration Statement under the Act)
shall also bear the above legend, unless Warrantholder furnishes an opinion of
legal counsel acceptable to Company, that the securities represented thereby
need no longer be subject to such restriction.
This Warrant and the Common Stock underlying its exercise, are restricted and
there is no agreement that either will be registered under the Securities Act of
1933. However, the Common Stock underlying the exercise of this Warrant shall be
included in the next Registration Statement filed by Company with the SEC,
and/or in the next Form S-8 filed by Company with the SEC.
4. Restrictions on Transfer; Registration Rights. By acceptance of this Warrant,
the Warrantholder agrees that prior to making any disposition of the Warrant,
the Warrantholder shall give written notice to the Company describing briefly
the manner in which any such proposed disposition is to be made; and no such
disposition shall be made unless Warrantholder provides Company with an opinion
of legal counsel acceptable to Company that a Registration Statement or other
notification or post-effective amendment thereto under the Act is not required
with respect to such disposition, or unless such a Registration Statement has
been filed by the Company with, and declared effective, if necessary, by the
Securities and Exchange Commission.
5. Reservation of Shares Issuable on Exercise of Warrants. The Company will at
all times reserve and keep available out of its authorized Shares, solely for
issuance upon exercise of this Warrant and other similar Warrants, such number
of Shares as from time to time shall be issuable upon the exercise of this and
all other similar Warrants at the time outstanding.
6. Warrantholder Not a Shareholder. The Warrantholder, as such, shall not be
entitled by reason of this Warrant to any rights of a shareholder of the
Company.
7. Notices. Any notice pursuant to this Warrant shall be in writing and shall
be deemed to have been duly given if delivered or mailed, by certified mail,
return receipt requested:
(a) If to Warrantholder, addressed to it at its address as set forth in the
Warrant Register maintained by the Company;
(b) If to the Company, addressed to it at 1200 Prospect Street, #325, La Jolla,
California 92037, attention: Investor Relations.
Warrantholder and/or Company may from time to time change the address to which
notices are to be delivered or mailed hereunder, by giving notice to the other
in accordance herewith.
8. Successors. The provisions of this Warrant are by and for the benefit of the
Company and Warrantholder and their respective heirs and/or successors
hereunder.
9. Applicable Law. This Warrant shall be deemed to be a contract made under the
laws of the State of California and for all purposes shall be construed in
accordance with the laws of said State.
10. Third Party Beneficiaries. The provisions of this Warrant shall be for the
sole and exclusive benefit of Company and Warrantholder, and nothing herein
shall be construed to give to any person or corporation other than Company and
Warrantholder, and their heirs, any legal or equitable right, remedy or claim,
under this Agreement.
11. Investment Intent of Warrantholder. Notwithstanding anything herein to the
contrary, this Warrant is issued subject to the following conditions: (i) that
the Warrant has been acquired for the account of Warrantholder and not with a
view to, or for sale in connection with, any distribution thereof; (ii) that
Warrantholder will forthwith execute and deliver to Company an Investment Letter
reciting and confirming the substance of clause (i) hereof; and (iii) that
Company may unilaterally cancel this Warrant upon the failure of Warrantholder
to execute and deliver any document requested by Company within thirty (30) days
of a written request to do so.
SGI INTERNATIONAL
By:
(Authorized Officer)
