CASINO RESOURCE CORPORATION
COMMON STOCK PURCHASE WARRANT
Casino Resource Corporation, a Minnesota corporation (the "COMPANY"),
hereby agrees that, for value received, THE XXXXXXX FUND, LTD., is entitled,
subject to the terms set forth below, to purchase from the Company at any
time or from time to time after September 9, 1997, and before 5:00 P.M.,
Biloxi, Mississippi time, on September 9, 2000, Six Thousand Two Hundred
Fifty (6,250) shares of the $.01 par value Common Stock of the Company (the
"COMMON STOCK"), at an exercise price equal to one hundred twenty percent
(120%) of the average closing bid price of the Common Stock quoted by the
Nasdaq Stock Market for the five (5)-day trading period ending the last
trading day prior to September 9, 1997, subject to adjustment as provided
herein.
1. EXERCISE OF WARRANT. The purchase rights granted by this Warrant
shall be exercised (in minimum quantities of 1,000 shares) by the holder
surrendering this Warrant with the form of exercise attached hereto duly
executed by such holder, to the Company at its principal office, accompanied
by payment, in cash or by cashier's check payable to the order of the
Company, of the purchase price payable in respect of the Common Stock being
purchased. If less than all of the Common Stock purchasable hereunder is
purchased, the Company will, upon such exercise, execute and deliver to the
holder hereof a new Warrant (dated the date hereof) evidencing the number of
shares of Common Stock not so purchased. As soon as practicable after the
exercise of this Warrant and payment of the purchase price, the Company will
cause to be issued in the name of and delivered to the holder hereof, or as
such holder may direct, a certificate or certificates representing the shares
purchased upon such exercise. The Company may require that such certificate
or certificates contain on the face thereof legends substantially as follows:
"The transfer of the shares represented by this certificate is
restricted pursuant to the terms of a Common Stock Purchase Warrant
dated September 2, 1997, issued by Casino Resource Corporation, a
copy of which is available for inspection at the offices of Casino
Resource Corporation Transfer may not be made except in accordance
with the terms of the Common Stock Purchase Warrant. In addition,
no sale, offer to sell or transfer of the shares represented by this
certificate shall be made unless a registration statement under the
Federal Securities Act of 1933, as amended (the "ACT"), with respect
to such shares is then in effect or an exemption from the registration
requirements of the Act is then in fact applicable to such shares.
Notwithstanding the foregoing, such shares are also subject to the
registration rights set forth in each of that certain Subscription
Agreement and Registration Rights Agreement by and between the holder
hereof and the Company, a copy of each is on file at the Company's
principal executive office.
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THIS WARRANT IS SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH ON PAGE
5 HEREOF.
The securities represented hereby have been included in the
Company's Registration Statement initially filed with the
Securities and Exchange Commission on __________, 1997, and
may be sold in accordance with, an upon delivery of, a copy of
the Company's Prospectus dated _____________, 1997, which forms a
part of such Registration Statement, or an opinion of counsel or
other evidence acceptable to the Company that such registration is
not required."
2. NEGOTIABILITY AND TRANSFER. This Warrant is issued upon the
following terms, to which each holder hereof consents and agrees:
(a) Until this Warrant is duly transferred on the books of the
Company, the Company may treat the registered holder of this
Warrant as absolute owner hereof for all purposes without
being affected by any notice to the contrary.
(b) Each successive holder of this Warrant, or of any portion of
the rights represented thereby, shall be bound by the terms
and conditions set forth herein.
3. ANTIDILUTION ADJUSTMENTS. If the Company shall at any time
hereafter subdivide or combine its outstanding shares of Common Stock, or
declare a dividend payable in Common Stock, the exercise price in effect
immediately prior to the subdivision, combination or record date for such
dividend payable in Common Stock shall forthwith be proportionately
increased, in the case of combination, or proportionately decreased, in the
case of subdivision or declaration of a dividend payable in Common Stock, and
each share of Common Stock purchasable upon exercise of this Warrant,
immediately preceding such event, shall be changed to the number determined
by dividing the then current exercise price by the exercise price as adjusted
after such subdivision, combination or dividend payable in Common Stock.
No fractional shares of Common Stock are to be issued upon the exercise
of the Warrant, but the Company shall pay a cash adjustment in respect of any
fraction of a share which would otherwise be issuable in an amount equal to
the same fraction of the market price per share of Common Stock on the day of
exercise as determined in good faith by the Company.
In case of any capital reorganization or any reclassification of the
shares of Common Stock of the Company, or in the case of any consolidation
with or merger of the Company into or with another corporation, or the sale
of all or substantially all of its assets to another corporation, which is
effected in such a manner that the holders of Common Stock shall be entitled
to receive stock, securities or assets with respect to or in exchange for
Common Stock, then, as a part of such reorganization, reclassification,
consolidation, merger or sale, as the case may be, lawful provision shall be
made so that the holder of the Warrant shall have the right thereafter to
receive, upon the exercise hereof, the kind and amount of shares of stock or
other securities or property which the holder would have been entitled to
receive if, immediately prior to such reorganization, reclassification,
consolidation, merger or sale, the holder had held the number of shares of
Common Stock which were then purchasable upon the exercise of the Warrant.
In any such case, appropriate
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adjustment (as determined in good faith by the Board of Directors of the
Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interest thereafter of the holder of the
Warrant, to the end that the provisions set forth herein (including
provisions with respect to adjustments of the exercise price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exercise of
the Warrant.
When any adjustment is required to be made in the exercise price, initial
or adjusted, the Company shall forthwith determine the new exercise price, and
(a) prepare and retain on file a statement describing in reasonable
detail the method used in arriving at the new exercise price; and
(b) cause a copy of such statement to be mailed to the holder of the
Warrant as of a date within ten (10) days after the date when the
circumstances giving rise to the adjustment occurred.
4. TRANSFERABILITY. Prior to making any disposition of the Warrant or
of any Common Stock purchased upon exercise of the Warrant, the holder will
give written notice to the Company describing briefly the manner of any such
proposed disposition. The holder will not make any such disposition until
(i) the Company has notified him that, in the opinion of its counsel,
registration under the Act is not required with respect to such disposition,
or (ii) a registration statement covering the proposed distribution has been
filed by the Company and has become effective. The holder then will make any
disposition only pursuant to the conditions of such opinion or registration.
The Company agrees that, upon receipt of written notice from the holder
hereof with respect to such proposed distribution, it will use its best
efforts, in consultation with the holder's counsel, to ascertain as promptly
as possible whether or not registration is required, and will advise the
holder promptly with respect thereto, and the holder will cooperate in
providing the Company with information necessary to make such determination.
5. REGISTRATION RIGHTS.
The Common Stock underlying this Warrant is subject to the terms of that
certain Registration Rights Agreement dated as of September 2, 1997, by and
between the Company and The Xxxxxxx Fund, Ltd.
6. NOTICES. The Company shall mail to the registered holder of the
Warrant, at the holder's last known post office address appearing on the
books of the Company, not less than fifteen (l5) days prior to the date on
which (a) a record will be taken for the purpose of determining the holders
of Common Stock entitled to dividends (other than cash dividends) or
subscription rights, or (b) a record will be taken (or in lieu thereof, the
transfer books will be closed) for the purpose of determining the holders of
Common Stock entitled to notice of and to vote at a meeting of stockholders
at which any capital reorganization, reclassification of shares of Common
Stock, consolidation, merger, dissolution, liquidation, winding up or sale of
substantially all of the Company's assets shall be considered and acted upon.
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7. RESERVATION OF COMMON STOCK. A number of shares of Common Stock
sufficient to provide for the exercise of the Warrant upon the basis herein
set forth shall at all times be reserved for the exercise thereof.
8. MISCELLANEOUS. Whenever reference is made herein to the issue or
sale of shares of Common Stock, the term "COMMON STOCK" shall include any
stock of any class of the Company other than preferred stock with a fixed
limit on dividends and a fixed amount payable in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the Company.
The Company will not, by amendment of its Articles of Incorporation or
through reorganization, consolidation, merger, dissolution or sale of assets,
or by any other voluntary act or deed, avoid or seek to avoid the observance
or performance of any of the covenants, stipulations or conditions to be
observed or performed hereunder by the Company, but will, at all times in
good faith, assist, insofar as it is able, in the carrying out of all
provisions hereof and in the taking of all other action which may be
necessary in order to protect the rights of the holder hereof against
dilution.
Upon written request of the holder of this Warrant, the Company will
promptly provide such holder with a then current written list of the names
and addresses of all holders of warrants originally issued under the terms
of, and concurrent with, this Warrant.
The representations, warranties and agreements herein contained shall
survive the exercise of this Warrant. References to the "holder of" include
the immediate holder of shares purchased on the exercise of this Warrant, and
the word "holder" shall include the plural thereof. This Common Stock
Purchase Warrant shall be interpreted under the laws of the State of
Minnesota.
All shares of Common Stock or other securities issued upon the exercise
of the Warrant shall be validly issued, fully paid and non-assessable, and
the Company will pay all taxes in respect of the issuer thereof.
Notwithstanding anything contained herein to the contrary, the holder of
this Warrant shall not be deemed a stockholder (including, no right to vote
on any matters coming before the shareholders and no right to receive any
dividends) of the Company for any purpose whatsoever until and unless this
Warrant is duly exercised and Common Stock issued.
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IN WITNESS WHEREOF, this Warrant has been duly executed by Casino
Resource Corporation, this _________ day of_______________, 1997.
CASINO RESOURCE CORPORATION
By
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Title:
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THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAW.
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ASSIGNED OR
OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES WILL BE
MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
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WARRANT EXERCISE FORM
To be signed only upon exercise of Warrant.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, __________________ of the shares of Common Stock of
Casino Resource Corporation to which such Warrant relates and herewith makes
payment of $___________ therefor in cash or by certified check, and requests
that such shares be issued and be delivered to, _________________________,
the address for which is set forth below the signature of the undersigned.
Dated:
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(Taxpayer's I.D. Number) (Signature)
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(Address)
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ASSIGNMENT FORM
To be signed only upon authorized transfer of Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto ______________________________ the right to purchase shares of Common
Stock of Casino Resource Corporation to which the within Warrant relates and
appoints _________________, attorney, to transfer said right on the books of
Casino Resource Corporation with full power of substitution in the premises.
Dated:
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(Signature)
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(Address)
