Document:

exv4w9

 

WARRANT NUMBER W-G-1

 

VISEON, INC.

(Formerly RSI Systems, Inc.)

Common Stock Purchase Warrant

September 15, 2005

 

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND ALL SECURITIES ACQUIRED
UPON ANY EXERCISE MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF OTHER THAN
IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	1.	 	Exercise of Warrant	 	 	1	 
	 
	 	1.1.	 	Manner of Exercise	 	 	1	 
	 
	 	1.2.	 	When Exercise Effective	 	 	2	 
	 
	 	1.3.	 	Delivery of Stock Certificates, etc.	 	 	2	 
	 
	 	1.4.	 	Company to Reaffirm Obligations	 	 	2	 
	 
	 	1.5.	 	Payment by Application of Shares Otherwise Issuable	 	 	2	 
	 
	 	1.6.	 	Tax Basis 	 	 	3	 
	 
	 	 	 	 	 	 	 	 
	2.	 	Adjustment of Common Stock Issuable Upon Exercise	 	 	2	 
	 
	 	2.1.	 	General; Warrant Quantity	 	 	2	 
	 
	 	2.2.	 	Extraordinary Dividends and Distributions	 	 	3	 
	 
	 	2.3.	 	Treatment of Stock Dividends, Stock Splits, etc.	 	 	3	 
	 
	 	2.4.	 	Computation of Consideration 	 	 	4	 
	 
	 	2.5.	 	Minimum Adjustment of Warrant Quantity	 	 	4	 
	 
	 	2.6.	 	Abandoned Dividend or Distribution 	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	3.	 	Consolidation, Merger, etc	 	 	4	 
	 
	 	3.1.	 	Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc.	 	 	4	 
	 
	 	3.2.	 	Assumption of Obligations	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	4.	 	Other Dilutive Events	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	5.	 	No Dilution or Impairment	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	6.	 	Accountants’ Report as to Adjustments	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	7.	 	Financial and Business Information	 	 	7	 
	 
	 	7.1.	 	Filings 	 	 	7	 
	 
	 	7.2.	 	Notices of Corporate Action 	 	 	7	 
	 
	 	 	 	 	 	 	 	 
	8.	 	Registration of Common Stock	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	9.	 	Restrictions on Transfer	 	 	8	 
	 
	 	9.1.	 	Restrictive Legends 	 	 	8	 
	 
	 	9.2.	 	Transfers to Comply With the Securities Act 	 	 	9	 
	 
	 	9.3.	 	Termination of Restrictions 	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	10.	 	Reservation of Stock, etc	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	11.	 	Registration and Transfer of Warrants, etc	 	 	10	 
	 
	 	11.1.	 	Warrant Register; Ownership of Warrants 	 	 	10	 
	 
	 	11.2.	 	Transfer of Warrants 	 	 	10	 
	 
	 	11.3.	 	Replacement of Warrants 	 	 	10	 
	 
	 	11.4.	 	Adjustments To Warrant Quantity 	 	 	11	 
	 
	 	11.5.	 	Fractional Shares 	 	 	11	 

 i 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	12.	 	Definitions	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	13.	 	Remedies; Specific Performance	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	14.	 	No Rights or Liabilities as Shareholder	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	15.	 	Notices	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	16.	 	Amendments	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	17.	 	Descriptive Headings, Etc	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	18.	 	Law Governing Agreement	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	19.	 	Registration Rights Agreement	 	 	15	 

 ii 

 

 

VISEON, INC.

(Formerly RSI Systems, Inc.)

Warrant to Purchase Common Stock 

Void on September 15, 2010

			
	 	 	 
	Common Stock Warrant 
	 	September 15, 2005
	No. W-G-1
	 	Las Vegas, Nevada

     VISEON, INC. f/k/a RSI Systems, Inc. (the “Company”), a Nevada corporation, for value
received, hereby certifies that Albert B. Greco, Jr., an individual, or registered assigns (the
“Holder”), is entitled to purchase from the Company up to THREE HUNDRED FORTY FOUR THOUSAND EIGHT
HUNDRED TWENTY SEVEN (344,827) (the “Warrant Quantity”) shares of duly authorized,
validly issued, fully paid and nonassessable Common Stock of the Company, par value $0.01 per
share, (the “Common Stock”) at the purchase price per share of One Dollar ($1) at any time or from
time to time prior to 5:00 p.m. Central Standard time on September 14, 2010 (the
“Expiration Date”), all subject to the terms, conditions and adjustments set forth below in this
Warrant.

     This Warrant (the term “Warrant” shall include any warrants issued in substitution or
replacement herefor) and the Warrant Shares to be issued hereunder are subject to registration
pursuant to that certain Registration Rights Agreement entered into by and between the Company and
Albert B. Greco, Jr. on or about February 20, 2003 in connection with the issuance of Warrant
W-DGTL-2. This Warrant so issued evidences the right to purchase a number of shares of Common
Stock equal to the Warrant Quantity, subject to adjustment, if any, as provided herein. Certain
capitalized terms used in this Warrant are defined in Section 12; references to an “Exhibit” are,
unless otherwise specified, to one of the Exhibits attached to this Warrant and references to a
“Section” are, unless otherwise specified, to one of the Sections of this Warrant.

1. Exercise of Warrant.

     1.1 Manner of Exercise. This Warrant may be exercised by the Holder, in whole or in
part during normal business hours on any Business Day, by surrender of this Warrant to the Company
at its principal office, accompanied by the Form of Subscription in substantially the form attached
as Exhibit A to this Warrant (or a reasonable facsimile thereof) duly executed by the Holder and
accompanied by payment, in cash, by wire transfer, certified or official bank check payable to the
order of the Company, or in the manner provided in Section 1.5 or Section 1.6 (or by any
combination of such methods), in the amount obtained by multiplying (a) the number of shares of
Common Stock (adjusted as provided in Sections 2 through 4) designated in such Form of Subscription
by (b) One Dollar ($1), and such Holder shall thereupon be entitled to receive such number of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock (or Other
Securities).

Warrant No. W-G-1 Page-1

 

     1.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the Business Day on which this Warrant
shall have been surrendered to the Company as provided in Section 1.1. At such time the Person or
Persons in whose name or names any certificate or certificates for shares of Common Stock (or Other
Securities) shall be issuable upon such exercise, as provided in Section 1.3, shall be deemed to
have become the Holder or holders of record thereof.

     1.3 Delivery of Stock Certificates, etc. As soon as practicable after each exercise
of this Warrant, in whole or in part, and in any event within three Business Days thereafter, the
Company at its expense (including the payment by it of any applicable transfer taxes) will cause to
be issued in the name of and delivered to the Holder hereof or, subject to Section 9, as such
Holder (upon payment by such Holder of any applicable transfer taxes) may direct,

     (a) a certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares, including, if the Company so elects, fractional shares,
of Common Stock (or Other Securities) to which such Holder shall be entitled upon such
exercise plus, at the discretion of the Company, in lieu of any fractional share to which
such Holder would otherwise be entitled, cash in an amount equal to the same fraction of the
Current Market Price per share on the Business Day next preceding the date of such exercise,
and

     (b) in case such exercise is in part only, a new Warrant or Warrants of like tenor,
calling in the aggregate on the face or faces thereof for the number of shares of Common
Stock equal (without giving effect to any adjustment thereof) to the number of such shares
called for on the face of this Warrant minus the number of such shares designated by the
Holder upon such exercise as provided in Section 1.1.

     1.4 Company to Reaffirm Obligations. The Company will, at the time of each exercise
of this Warrant, upon the request of the Holder, acknowledge in writing its continuing obligation
to afford to such Holder all rights (including, without limitation, any rights to registration of
the shares of Common Stock or Other Securities issued upon such exercise) to which such Holder
shall continue to be entitled after such exercise in accordance with the terms of this Warrant,
provided that if the Holder shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford such rights to such Holder.

     1.5 Payment by Application of Shares Otherwise Issuable. Upon any exercise of this
Warrant, the Holder may, at its option, instruct the Company, by written notice accompanying the
surrender of this Warrant at the time of such exercise, to apply to the payment required by Section
1.1 such number of the shares of Common Stock otherwise issuable to such Holder upon such exercise
as shall be specified in such notice, in which case an amount equal to the excess of the aggregate
Closing Price of such specified number of shares on the date of exercise over the portion of the
payment required by Section 1.1 attributable to such shares shall be deemed to have been paid to
the Company and the number of shares issuable upon such exercise shall be reduced by such specified
number.

Warrant No. W-G-1 Page-2

 

     1.6 Tax Basis. The Company and the Holder shall mutually agree as to the tax basis of
this Warrant for purposes of the Internal Revenue Code of 1986, as amended (the “Code”), and the
treatment of this Warrant under the Code by each of the Company and the Holder shall be consistent
with such agreement.

2. Adjustment of Common Stock Issuable Upon Exercise.

     2.1 General; Warrant Quantity. This Warrant initially evidences the right to purchase
a number of shares of Common Stock equal to the Warrant Quantity, subject to adjustment as provided
in this Section 2 and in Section 3. The initial “Warrant Price” shall be One Dollar ($1) per share
of Common Stock issued upon exercise of this Warrant, subject to adjustment as provided in this
Section 2 and in Section 3.

     2.2 Extraordinary Dividends and Distributions. In case the Company at any time or
from time to time after the date hereof shall declare, order, pay or make a dividend or other
distribution (including, without limitation, any distribution of other or additional stock or other
securities or property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Stock other than (a) a dividend
payable in Additional Shares of Common Stock or (b) a regularly scheduled cash dividend payable out
of consolidated earnings or earned surplus, determined in accordance with generally accepted
accounting principles, then, in each such case, subject to Section 2.8, the Warrant Quantity in
effect immediately prior to the close of business on the record date fixed for the determination of
holders of any class of securities entitled to receive such dividend or distribution shall be
increased, effective as of the close of business on such record date, to an amount determined by
multiplying such Warrant Quantity by a fraction

     (x) the numerator of which shall be the Current Market Price in effect on such record
date or, if the Common Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading, and

     (y) the denominator of which shall be such Current Market Price, less the amount of
such dividend or distribution (as determined in good faith by the Board of Directors of the
Company) applicable to one share of Common Stock,

provided that, in the event that the amount of such dividend as so determined is equal to or
greater than 10% of such Current Market Price or in the event that such fraction is greater than
10/9, in lieu of the foregoing adjustment, adequate provision shall be made so that the Holder of
this Warrant shall receive a pro rata share of such dividend based upon the maximum number of
shares of Common Stock at the time issuable to such Holder.

     2.3 Treatment of Stock Dividends, Stock Splits, etc. In the event that the Company
shall pay a dividend on the Common Stock in shares of Common Stock, or shall effect a subdivision
of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in Common Stock), the Warrant Price in
effect immediately prior to such subdivision or at the record date of such dividend shall,
simultaneously with the effectiveness of such subdivision or immediately after the record date of
such dividend be proportionately reduced. In the event that the Company

Warrant No. W-G-1 Page-3

 

shall combine outstanding shares of Common Stock into a smaller number of shares of Common Stock (by reverse split, roll-up,
reclassification or otherwise), the Warrant Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be proportionately increased.
Upon any required adjustment in the Warrant Price, the Warrant Quantity shall be simultaneously
changed to the number determined by dividing (a) the product derived by multiplying the Warrant
Quantity immediately prior to such adjustment by the Warrant Price in effect immediately prior to
such adjustment by (b) the Warrant Price in effect immediately after such adjustment.

2.4 Computation of Consideration. For the purposes of this Section 2,

     (a) the consideration for the issue or sale of any Additional Shares of Common Stock
shall, irrespective of the accounting treatment of such consideration,

     (i) insofar as it consists of cash, be computed at the net amount of cash
received by the Company, without deducting any expenses paid or incurred by the
Company or any commissions or compensations paid or concessions or discounts allowed
to underwriters, dealers or others performing similar services in connection with
such issue or sale,

     (ii) insofar as it consists of property (including securities) other than cash,
be computed at the fair value thereof at the time of such issue or sale, as
determined in good faith by the Board of Directors of the Company, and

     (iii) in case Additional Shares of Common Stock are issued or sold together
with other stock or securities or other assets of the Company for a consideration
which covers both, be the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such Additional Shares of
Common Stock, all as determined in good faith by the Board of Directors of the
Company;

     (b) Additional Shares of Common Stock deemed to have been issued pursuant to Section
2.2, relating to stock dividends, stock splits, etc., shall be deemed to have been issued
for no consideration.

     2.5 Minimum Adjustment of Warrant Quantity. If the amount of any adjustment of the
Warrant Quantity required pursuant to this Section 2 would be less than one tenth (1/10) of one
percent (1%) of the Warrant Quantity in effect at the time such adjustment is otherwise so required
to be made, such amount shall be carried forward and adjustment with respect thereto made at the
time of and together with any subsequent adjustment which, together with such amount and any other
amount or amounts so carried forward, shall aggregate at least one tenth (1/10) of one percent (1%)
of such Warrant Quantity. All calculations under this Warrant shall be made to the nearest
one-hundredth of a share.

     2.6 Abandoned Dividend or Distribution. If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a dividend or other
distribution (which results in an adjustment to the Warrant Quantity under the terms of this
Warrant) and shall, thereafter, and before such dividend or distribution is paid or delivered to

Warrant No. W-G-1 Page-4

 

shareholders entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity by reason of the taking of such
record shall be reversed, and any subsequent adjustments, based thereon, shall be recomputed.

3. Consolidation, Merger, etc.

     3.1 Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc. In
case the Company after the date hereof (a) shall consolidate with or merge into any other Person
and shall not be the continuing or surviving corporation of such consolidation or merger, or (b)
shall permit any other Person to consolidate with or merge into the Company and the Company shall
be the continuing or surviving Person but, in connection with such consolidation or merger, the
Common Stock or Other Securities shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property, or (c) shall transfer all or substantially all
of its properties or assets to any other Person, or (d) shall effect a capital reorganization or
reclassification of the Common Stock or Other Securities (other than a capital reorganization or
reclassification resulting in the issue of Additional Shares of Common Stock for which adjustment
in the Warrant Quantity is provided in Section 2.2.1), then, and in the case of each such
transaction, proper provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder, upon the exercise hereof at any time after the consummation
of such transaction, shall be entitled to receive (at the aggregate Warrant Price in effect at the
time of such consummation for all Common Stock or Other Securities issuable upon such exercise
immediately prior to such consummation), in lieu of the Common Stock or Other Securities issuable
upon such exercise prior to such consummation, the highest amount of securities, cash or other
property to which such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised the rights represented by this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for in Sections 2 through 4, provided that if a purchase, tender or
exchange offer shall have been made to and accepted by the holders of more than 50% of the
outstanding shares of Common Stock, and if the Holder so designates in a notice given to the
Company on or before the date immediately preceding the date of the consummation of such
transaction, the Holder shall be entitled to receive the highest amount of securities, cash or
other property to which such Holder would actually have been entitled as a shareholder if the
Holder had exercised this Warrant prior to the expiration of such purchase, tender or exchange
offer and accepted such offer, subject to adjustments (from and after the consummation of such
purchase, tender or exchange offer) as nearly equivalent as possible to the adjustments provided
for in Sections 2 through 4.

     3.2 Assumption of Obligations. Notwithstanding anything contained in this Warrant to
the contrary, the Company will not effect any of the transactions described in clauses (a) through
(d) of Section 3.1 unless, prior to the consummation thereof, each Person (other than the Company)
which may be required to deliver any stock, securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to, and reasonably satisfactory to, the Holder, (a)
the obligations of the Company under this Warrant (and if the Company shall survive the
consummation of such transaction, such assumption shall be in addition to, and shall not release
the Company from, any continuing obligations of the Company under this Warrant), (b) the
obligations of the Company under the Registration Rights Agreement, and (c) the obligation to
deliver to such Holder such shares of stock, securities, cash or property as, in accordance with
the foregoing provisions of this Section 3, such Holder may be

Warrant No. W-G-1 Page-5

 

entitled to receive, and such Person
shall have similarly delivered to such Holder an opinion of counsel for such Person, which counsel
shall be reasonably satisfactory to such Holder, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including, without limitation, all of the
provisions of this Section 3) shall be applicable to the stock, securities, cash or property which
such Person may be required to deliver upon any exercise of this Warrant or the exercise of any
rights pursuant hereto.

4. Other Dilutive Events. In case any event shall occur as to which the provisions of
Section 2 or Section 3 are not strictly applicable but the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in accordance with the essential
intent and principles of such Sections, then, in each such case, the Company shall appoint a firm
of independent certified public accountants of recognized national standing (which may be the
regular auditors of the Company), which shall give their opinion upon the adjustment, if any, on a
basis consistent with the essential intent and principles established in Sections 2 and 3,
necessary to preserve, without dilution, the purchase rights represented by this Warrant. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to the Holder and shall make
the adjustments described therein.

5. No Dilution or Impairment. The Company will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (a) shall not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to exceed the amount
payable therefor upon such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of stock, free from all taxes, liens, security interests, encumbrances, preemptive rights
and charges on the exercise of the Warrants from time to time outstanding, (c) will not take any
action which results in any adjustment of the Warrant Quantity if the total number of shares of
Common Stock (or Other Securities) issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock (or Other Securities) then
authorized by the Company’s certificate of incorporation and available for the purpose of issue
upon such exercise, and (d) will not issue any capital stock of any class which is preferred as to
dividends or as to the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless the rights of the holders thereof shall be limited to a fixed sum
or percentage of par value or a sum determined by reference to a formula based on a published index
of interest rates, an interest rate publicly announced by a financial institution or a similar
indicator of interest rates in respect of participation in dividends and to a fixed sum or
percentage of par value in any such distribution of assets.

6. Accountants’ Report as to Adjustments. In each case of any adjustment or readjustment
in the shares of Common Stock (or Other Securities) issuable upon the exercise of this Warrant, the
Company at its expense will promptly compute such adjustment or readjustment in accordance with the
terms of this Warrant and cause independent certified public accountants of recognized national
standing (which may be the regular auditors of the Company) selected by the Company to verify such
computation (other than any computation of the fair

Warrant No. W-G-1 Page-6

 

value of property as determined in good faith
by the Board of Directors of the Company) and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof and the facts upon
which such adjustment or readjustment is based, including a statement of (a) the consideration
received or to be received by the Company for any Additional Shares of Common Stock issued or sold
or deemed to have been issued, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Warrant Quantity in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 2) on account thereof. The Company will forthwith
mail a copy of each such report to each Holder of a Warrant and will, upon the written request at
any time of any Holder of a Warrant, furnish to such Holder a like report setting forth the Warrant
Quantity at the time in effect and showing in reasonable detail how it was calculated. The Company
will also keep copies of all such reports at its principal office and will cause the same to be
available for inspection at such office during normal business hours by any Holder of a Warrant or
any prospective purchaser of a Warrant designated by the Holder thereof.

7. Financial and Business Information

     7.1 Filings. During any period when the Company is a Public Company, the Company will
file on or before the required date all required regular or periodic reports (pursuant to the
Exchange Act) with the Commission and will deliver to the Holder promptly upon their becoming
available one copy of each report, notice or proxy statement sent by the Company to its
stockholders generally, and of each regular or periodic report (pursuant to the Exchange Act) and
any registration statement, prospectus or written communication (other than transmittal letters)
(pursuant to the Securities Act), filed by the Company with (i) the Commission or (ii) any
securities exchange on which shares of Common Stock are listed.

7.2 Notices of Corporate Action. In the event of

     (a) any taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any dividend
(other than a regular periodic dividend payable in cash out of earned surplus in an amount
not exceeding the amount of the immediately preceding cash dividend for such period) or
other distribution, or any right to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities or property, or to receive any other right, or

     (b) any capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any consolidation or merger involving the Company and
any other Person, any transaction or series of transactions in which more than 50% of the
Voting Securities of the Company are transferred to another Person or any transfer, sale or
other disposition of all or substantially all the assets of the Company to any other Person,
or

     (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company,

the Company will mail to the Holder a notice specifying (i) the date or expected date on which any
such record is to be taken for the purpose of such dividend, distribution or right, and the

Warrant No. W-G-1 Page-7

 

amount and character of such dividend, distribution or right, and (ii) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place and the time, if any such time is to be
fixed, as of which the holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, sale, disposition, liquidation or winding-up. Such notice shall be mailed
at least 45 days prior to the date therein specified.

8. Registration of Common Stock. If any shares of Common Stock required to be reserved for
purposes of exercise of this Warrant require registration with or approval of any governmental
authority under any federal or state law (other than the Securities Act) before such shares may be
issued upon exercise, the Company will, at its expense and as expeditiously as possible, use its
best efforts to cause such shares to be duly registered or approved, as the case may be. At any
such time as Common Stock is listed on any national securities exchange, the Company will, at its
expense, obtain promptly and maintain the approval for listing on each such exchange, upon official
notice of issuance, the shares of Common Stock issuable upon exercise of the then outstanding
Warrants and maintain the listing of such shares after their issuance; and the Company will also
list on such national securities exchange, will register under the Exchange Act and will maintain
such listing of, any Other Securities that at any time are issuable upon exercise of the Warrants,
if and at the time that any securities of the same class shall be listed on such national
securities exchange by the Company.

9. Restrictions on Transfer.

     9.1 Restrictive Legends. Except as otherwise permitted by this Section 9, each
Warrant (including each Warrant issued upon the transfer of any Warrant) shall be stamped or
otherwise imprinted with a legend in substantially the following form:

“THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT
AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT AND IN THAT CERTAIN
REGISTRATION RIGHTS AGREEMENT ENTERED INTO BY AND BETWEEN THE COMPANY AND ALBERT B.
GRECO, JR. ON OR ABOUT FEBRUARY 20, 2003 IN CONNECTION WITH THE ISSUANCE OF WARRANT
W-DGTL-2.”

Except as otherwise permitted by this Section 9, each certificate for Common Stock (or Other
Securities) issued upon the exercise of any Warrant, and each certificate issued upon the transfer
of any such Common Stock (or Other Securities), shall be stamped or otherwise imprinted with a
legend in substantially the following form:

Warrant No. W-G-1 Page-8

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THAT CERTAIN COMMON STOCK PURCHASE WARRANT
ISSUED BY VISEON, INC. f/k/a RSI SYSTEMS, INC. DATED SEPTEMBER 15, 2005 AND THAT
CERTAIN REGISTRATION RIGHTS AGREEMENT ENTERED INTO BY AND BETWEEN BY AND BETWEEN
VISEON, INC. f/k/a RSI SYSTEMS, INC. AND ALBERT B. GRECO, JR. ON OR ABOUT FEBRUARY 20,
2003 IN CONNECTION WITH THE ISSUANCE OF WARRANT W-DGTL-2. A COMPLETE AND CORRECT COPY
OF THE FORM OF SUCH WARRANT AND REGISTRATION RIGHTS AGREEMENT IS AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF VISEON, INC. f/k/a RSI SYSTEMS, INC. OR AT THE
OFFICE OR AGENCY MAINTAINED BY VISEON, INC. f/k/a RSI SYSTEMS, INC. AS PROVIDED IN
SUCH WARRANTS AND SUCH REGISTRATION RIGHTS AGREEMENT AND WILL BE FURNISHED TO THE
HOLDER OF SUCH SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE.”

     9.2 Transfer to Comply With the Securities Act. Restricted Securities may not be
sold, assigned, pledged, hypothecated, encumbered or in any manner transferred or disposed of, in
whole or in part, except in compliance with the provisions of the Securities Act and state
securities or Blue Sky laws and the terms and conditions hereof.

     9.3 Termination of Restrictions. The restrictions imposed by this Section 9 on the
transferability of Restricted Securities shall cease and terminate as to any particular Restricted
Securities (a) when a registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) when such securities are sold pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, or (c) when, in the opinion of
both counsel for the Holder and counsel for the Company, such restrictions are no longer required
or necessary in order to protect the Company against a violation of the Securities Act upon any sale or other disposition of
such securities without registration thereunder. Whenever such restrictions shall cease and
terminate as to any Restricted Securities, the Holder shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing the applicable legends required
by Section 9.1.

     10. Reservation of Stock, etc. The Company shall at all times reserve and keep available,
solely for issuance and delivery upon exercise of the Warrants, the number of shares of Common
Stock (or Other Securities) from time to time issuable upon exercise of all Warrants at the time
outstanding. All shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be validly issued and,
in the case of shares, fully paid and nonassessable with no liability on the part of the holders
thereof, and, in the case of all securities, shall be free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges. The transfer agent for the Common Stock, which

Warrant No. W-G-1 Page-9

 

may be the Company (“Transfer Agent”), and every subsequent Transfer Agent for any shares of
the Company’s capital stock issuable upon the exercise of any of the purchase rights represented by
this Warrant, are hereby irrevocably authorized and directed at all times until the Expiration Date
to reserve such number of authorized and unissued shares as shall be requisite for such purpose.
The Company shall keep copies of this Warrant on file with the Transfer Agent for the Common Stock
and with every subsequent Transfer Agent for any shares of the Company’s capital stock issuable
upon the exercise of the rights of purchase represented by this Warrant. The Company shall supply
such Transfer Agent with duly executed stock certificates for such purpose. All Warrant
certificates surrendered upon the exercise of the rights thereby evidenced shall be canceled, and
such canceled Warrants shall constitute sufficient evidence of the number of shares of stock that
have been issued upon the exercise of such Warrants. Subsequent to the Expiration Date, no shares
of stock need be reserved in respect of any unexercised Warrant.

11. Registration and Transfer of Warrants, etc.

     11.1 Warrant Register; Ownership of Warrants. Each Warrant issued by the Company
shall be numbered and shall be registered in a warrant register (the “Warrant Register”) as it is
issued and transferred, which Warrant Register shall be maintained by the Company at its principal
office or, at the Company’s election and expense, by a Warrant Agent or the Company’s transfer
agent. The Company shall be entitled to treat the registered Holder of any Warrant on the Warrant
Register as the owner in fact thereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other Person, and shall
not be affected by any notice to the contrary, except that, if and when any Warrant is properly
assigned in blank, the Company may (but shall not be obligated to) treat the bearer thereof as the
owner of such Warrant for all purposes. Subject to Section 9, a Warrant, if properly assigned, may
be exercised by a new holder without a new Warrant first having been issued.

     11.2 Transfer of Warrants. Subject to compliance with Section 9, if applicable, this
Warrant and all rights hereunder are transferable in whole or in part, without charge to the Holder
hereof, upon surrender of this Warrant with a properly executed Form of Assignment attached hereto
as Exhibit B at the principal office of the Company. Upon any partial transfer, the Company shall
at its expense issue and deliver to the Holder a new Warrant of like tenor, in the name of the Holder, which shall be exercisable for
such number of shares of Common Stock with respect to which rights under this Warrant were not so
transferred.

     11.3 Replacement of Warrants. On receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office and cancellation
thereof, the Company at its expense shall execute and deliver, in lieu thereof, a new Warrant of
like tenor.

     11.4 Adjustments to Warrant Quantity. Notwithstanding any adjustment in the Warrant
Quantity or in the number or kind of shares of Common Stock purchasable upon exercise of this
Warrant, any Warrant theretofore or thereafter issued may continue to express the same number and
kind of shares of Common Stock as are stated in this Warrant, as initially issued.

Warrant No. W-G-1 Page-10

 

     11.5 Fractional Shares. Notwithstanding any adjustment pursuant to Section 2 in the
number of shares of Common Stock covered by this Warrant or any other provision of this Warrant,
the Company may, but shall not be required to, issue fractions of shares upon exercise of this
Warrant or to distribute certificates which evidence fractional shares. In lieu of fractional
shares, the Company shall make payment to the Holder, at the time of exercise of this Warrant as
herein provided, in an amount in cash equal to such fraction multiplied by the Current Market Price
of a share of Common Stock on the date of Warrant exercise.

12. Definitions. As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:

          Additional Shares of Common Stock: All shares (including treasury shares) of Common
Stock issued or sold (or, pursuant to Section 2.2, deemed to be issued) by the Company after the
date hereof, whether or not subsequently reacquired or retired by the Company, other than

     (a) shares issued upon the exercise of the Warrant,

     (b) such additional number of shares as may become issuable upon the exercise of the
Warrant by reason of adjustments required pursuant to anti-dilution provisions applicable to
the Warrant as in effect on the date hereof,

     (c) shares, warrants, options and other securities issued at any time to the Holder or
any Affiliate thereof.

     Affiliate: Any person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the applicable person.
For purposes of this definition, “control” has the meaning specified in Rule 12b-2 under the
Exchange Act.

     Business Day: Any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in the City of Nevada are authorized by law to be closed. Any reference to
“days” (unless Business Days are specified) shall mean calendar days.

     Closing Price: For any day, shall be (i) the last reported sales price regular way
of the Common Stock on such day on the principal securities exchange on which the Common Stock is
then listed or admitted to trading or on Nasdaq, as applicable, (ii) if no sale takes place on such
day on any such securities exchange or system, the average of the closing bid and asked prices,
regular way, on such day for the Common Stock as officially quoted on any such securities exchange
or system, (iii) if on such day such shares of Common Stock are not then listed or
admitted to trading on any securities exchange or system, the last reported sale price, regular
way, on such day for the Common Stock, (iv) or if no sale takes place on such day the average of
the comparative bid and asked prices quoted for the Common Stock in the National Association of
Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System as of 4:00 P.M., New York City time
on such day, or if such shares shall not be quoted in the NASDAQ System, the average of the high
and low bid and asked price of the Common Stock on such day

Warrant No. W-G-1 Page-11

 

in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any other successor organization. If
at any time such shares of Common Stock are not listed on any domestic exchange or quoted in the
NASDAQ System or the domestic over-the-counter market, the Closing Price shall be the fair market
value thereof determined by the Board of Directors of the Company in good faith.

          Code: As defined in Section 1.6.

          Commission: The Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act.

          Common Stock: As defined in the introduction to this Warrant, such term to include
any stock into which such Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or classes (however
designated) of the Company the holders of which have the right, without limitation as to amount,
either to all or to a share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.

          Company: As defined in the introduction to this Warrant, such term to include any
corporation, which shall succeed to or assume the obligations of the Company hereunder in
compliance with Section 3.

          Convertible Securities: Any evidences of indebtedness, shares of stock (other than
Common Stock) or other securities directly or indirectly convertible into or exchangeable for
Additional Shares of Common Stock.

          Exchange Act: The Securities Exchange Act of 1934 or any similar federal statute, and
the rules and regulations of the Commission thereunder, all as the same shall be in effect at the
time.

          Expiration Date: As defined in the introduction to this Warrant.

          Holder: As defined in the introduction to this Warrant.

          Market Price: On any date specified herein, the amount per share of the Common Stock,
equal to (a) the last reported sale price of such Common Stock, regular way, on such date or, in
case no such sale takes place on such date, the average of the closing bid and asked prices thereof
regular way on such date, in either case as officially reported on the principal national
securities exchange on which such Common Stock is then listed or admitted for trading, or (b) if
such Common Stock is not then listed or admitted for trading on any national securities exchange
but is designated as a national market system security by the NASD, the last reported trading price
of the Common Stock on such date, or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the closing bid and asked prices of the Common
Stock on such date as shown by the NASD automated quotation system, or (d) if such Common Stock is
not then listed or admitted for trading on any national exchange or quoted in the over-the-counter
market, the higher of (x) the book value thereof as determined by any firm of independent public
accountants of recognized standing selected by the Board of Directors of the Company as of the last
day of any month ending within 60 days preceding the date as of which the determination is to be
made and (y) the fair value thereof (as of a date which
is within 20 days of the date as of which
the determination is to be made) determined in good faith by the Board of Directors of the Company.

Warrant No. W-G-1 Page-12

 

          NASD: The National Association of Securities Dealers, Inc.

          Options: Rights, options or warrants to subscribe for, purchase or otherwise acquire
either Additional Shares of Common Stock or Convertible Securities.

          Other Securities: Any stock (other than Common Stock) and other securities of the
Company or any other Person (corporate or otherwise) which the holders of the Warrants at any time
shall be entitled to receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to Section 3 or
otherwise.

          Person: An individual, firm, partnership, corporation, professional corporation,
trust, joint venture, association, joint stock company, limited liability company, unincorporated
organization or any other entity or organization, including a government or agency or political
subdivision thereof, and shall include any successor (by merger or otherwise) of such entity.

          Registration Rights Agreement: That certain Registration Rights Agreement, entered
into by and between the Company and Albert B. Greco, Jr. on or about February 20, 2003 in
connection with the issuance of Warrant W-DGTL-2.

          Restricted Securities: (a) any Warrants bearing the applicable legend set forth in
Section 9.1, (b) any shares of Common Stock (or Other Securities) issued or issuable upon the
exercise of Warrants which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such Section, and (c) any shares of Common Stock (or Other Securities) issued
subsequent to the exercise of any of the Warrants as a dividend or other distribution with respect
to, or resulting from a subdivision of the outstanding shares of Common Stock (or other Securities)
into a greater number of shares by reclassification, stock splits or otherwise, or in exchange for
or in replacement of the Common Stock (or Other Securities) issued upon such
exercise, which are evidenced by a certificate or certificates bearing the applicable legend
set forth in such Section.

          Securities Act: The Securities Act of 1933, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

          Voting Securities: Stock of any class or classes (or equivalent interests), if the
holders of the stock of such class or classes (or equivalent interests) are ordinarily, in the
absence of contingencies, entitled to vote for the election of the directors (or persons performing
similar functions) of such business entity, even though the right so to vote has been suspended by
the happening of such a contingency.

          Warrant: As defined in the introduction to this Warrant.

          Warrant Price: As defined in Section 2.1.

          Warrant Quantity: As defined in the introduction to this Warrant.

Warrant No. W-G-1 Page-13

 

13. Remedies; Specific Performance. The Company stipulates that there would be no adequate
remedy at law to the Holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this Warrant and
accordingly, the Company agrees that, in addition to any other remedy to which the Holder may be
entitled at law or in equity, the Holder shall be entitled to seek to compel specific performance
of the obligations of the Company under this Warrant, without the posting of any bond, in
accordance with the terms and conditions of this Warrant in any court of the United States or any
State thereof having jurisdiction, and if any action should be brought in equity to enforce any of
the provisions of this Warrant, the Company shall not raise the defense that there is an adequate
remedy at law. Except as otherwise provided by law, a delay or omission by the Holder hereto in
exercising any right or remedy accruing upon any such breach shall not impair the right or remedy
or constitute a waiver of or acquiescence in any such breach. No remedy shall be exclusive of any
other remedy. All available remedies shall be cumulative.

14. No Rights or Liabilities as Shareholder. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof any rights as a shareholder of the Company or as
imposing any obligation on the Holder to purchase any securities or as imposing any liabilities on
the Holder as a shareholder of the Company, whether such obligation or liabilities are asserted by
the Company or by creditors of the Company.

15. Notices. All notices, requests, demands, waivers, consents and other communications
required or permitted to be given hereunder shall be (a) in writing; (b) delivered either in
person, by facsimile transmission, by telegraphic or other electronic means, by overnight air
courier guaranteeing next day delivery or by certified, registered or express mail, in each such
case with all costs, fees, charges and/or postage prepaid and (c) directed to each respective party
at the following addresses (or at such other address as shall have been previously given in writing
in accordance with the terms hereof by any party hereto):

          If to Viseon:

Viseon, Inc.

Attention: President

545 E. John Carpenter Freeway, Suite 1430

Irving, Texas 75062

          If to Holder:

Albert B. Greco, Jr.

Law Offices of Albert B. Greco, Jr.

16901 N. Dallas Parkway, Suite 230

Addison, Texas 75001

Facsimile:          972-818-7343

Any party may be given notice in accordance with this Section by any other party at another address
or by delivery to another person designated for receipt of notices, if such party so designates
such other person or address in writing in accordance with this Section 15. The
Company shall give Notice to any subsequent Holder at such address as it appears in the Warrant Register.

Warrant No. W-G-1 Page-14

 

All notices shall be deemed to have been served, duly given and become effective: (a) immediately
upon receipt if delivered by hand, ground courier or personal delivery on any business day prior to
5:00 p.m., local time or on the next succeeding Business Day if delivered on a non-business day or
after 5:00 p.m., local time; (b) four (4) hours from the time of transmission with confirmed
receipt at its destination on any business day prior to 5:00 p.m., local time if delivered by
facsimile, telex, telecopy or other telegraphic or electronic means or on the next succeeding
Business Day if receipt at its destination is on a non-business day or after 5:00 p.m., local time
subject to verification by the sender of the transmission report confirming receipt; (c) one
Business Day after having been timely delivered to an air courier for guaranteed overnight delivery
or (d) five Business Days after having been deposited with the United States Postal Service as
certified or registered mail, return receipt requested., provided that the exercise of any Warrant
shall be effective in the manner provided in Section 1 hereinabove.

16. Amendments. This Warrant and any term hereof may not be amended, modified,
supplemented or terminated, and waivers or consents to departures from the provisions hereof may
not be given, except by written instrument duly executed by the party against which enforcement of
such amendment, modification, supplement, termination or consent to departure is sought.

17. Descriptive Headings, Etc. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning of terms contained herein.
Unless the context of this Warrant otherwise requires: (1) words of any gender shall be deemed to
include each other gender; (2) words using the singular or plural number shall also include the
plural or singular number, respectively; (3) the words “hereof”, “herein” and “hereunder” and words
of similar import when used in this Warrant shall refer to this Warrant as a whole and not to any
particular provision of this Warrant,
and Section and paragraph references are to the Sections and paragraphs of this Warrant unless
otherwise specified; (4) the word “including” and words of similar import when used in this Warrant
shall mean “including, without limitation,” unless otherwise specified; (5) “or” is not exclusive;
and (6) provisions apply to successive events and transactions.

18. Law Governing Agreement. This Agreement shall be interpreted, construed and enforced
and its construction and performance shall be governed by the laws of the State of Nevada without
regard to principles of conflicts of laws, except to the extent that Federal law may apply.

19. Registration Rights Agreement. The shares of Common Stock (and Other Securities)
issuable upon exercise of this Warrant (or upon conversion of any shares of Common Stock issued
upon such exercise) shall constitute Registrable Securities (as such term is defined in the
Registration Rights Agreement). Each holder of this Warrant shall be entitled to all of the
benefits afforded to a holder of any such Registrable Securities under the Registration Rights
Agreement and such holder, by its acceptance of this Warrant, agrees to be bound by and to comply
with the terms and conditions of the Registration Rights Agreement applicable to such holder as a
holder of such Registrable Securities.

	 	 	 
	Viseon, Inc.
	  (Formerly RSI Systems, Inc.)
	 
	 	 
	 
	 	 
	 
	By:

	 	John Harris
	Its:

	 	Chief Executive Officer

Warrant No. W-G-1 Page-15

 

Exhibit A

FORM OF SUBSCRIPTION

[To be executed only upon exercise of Warrant]

To: VISEON, INC. f/k/a RSI Systems, Inc.

The undersigned registered holder of the within Warrant, being Viseon, Inc, common stock purchase
Warrant No. W-G-1, hereby irrevocably exercises such Warrant for, and purchases thereunder,
                                                            
(                    )
1 shares of Common stock of VISEON, INC. f/k/a RSI
SYSTEMS, INC. and herewith makes payment in the amount of
                                                                                 ($                    )2 therefor, and requests that
the certificates for such shares be issued in the name of, and delivered to
                                                            , whose address is
                                                                                                                  

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Signature must conform in all respects to the name
of holder as specified on the face of Warrant)
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(Street Address)
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(City) (State) Zip Code)

 

			
	1	 	Insert here the number of shares called for
on the face of this Warrant (or, in the case of a partial exercise, the portion
thereof as to which this Warrant is being exercised), in either case without
making any adjustment for Additional Shares of Common Stock or any other stock
or other securities or property or cash which, pursuant to the adjustment
provisions of this Warrant, may be delivered upon exercise. In the case of
partial exercise, a new Warrant or Warrants will be issued and delivered,
representing the unexercised portion of the Warrant, to the holder surrendering
the Warrant.
	 
	2	 	In the event that a cashless exercise of
this Warrant is available at the time of exercise, to the extent a
requesting a cashless exercise, print the word
“cashless” in addition to or in place of any dollar
amount.

Warrant No. W-G-1 Exhibit B

 

 

Exhibit B

FORM OF ASSIGNMENT

[To be executed only upon assignment of Warrant]

For value received, the undersigned registered holder of the within Warrant, being Viseon, Inc,
common stock purchase Warrant No. W-G-1, hereby sells, assigns and transfers unto
                                                             the right represented by such Warrant to purchase
                                                                                
shares of Common Stock of VISEON, INC. f/k/a RSI Systems,
Inc. to which such Warrant relates, and appoints                                                             , Attorney to make
such transfer on the books of VISEON, INC. f/k/a RSI Systems, Inc. maintained for such purpose,
with full power of substitution in the premises.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Signature must conform in all respects to the name
of holder as specified on the face of Warrant)
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(Street Address)
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(City) (State) Zip Code)

Signed in the presence of:

	 
	 

	 

	 

	 

	 

	 

	 

	(Printed name)

Warrant No. W-G-1 Exhibit Bexv4w10

 

WARRANT No. W-PP-5-1

VISEON, INC.

(Formerly RSI Systems, Inc.)

Common Stock Purchase Warrant

July 30, 2005

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND ANY SECURITIES ACQUIRED
UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.

 

 

TABLE OF CONTENTS

	 	 	 
	 	 	Page
	1. EXERCISE OF WARRANT
	 	1
	 
	 	 
	1.1. Manner of Exercise
	 	1
	1.2. When Exercise Effective
	 	2
	1.3. Delivery of Stock Certificates, etc
	 	2
	1.4. Company to Reaffirm Obligations
	 	2
	1.5. Payment by Application of Shares Otherwise Issuable
	 	2
	1.6. Tax Basis
	 	3
	 
	 	 
	2. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE
	 	3
	 
	 	 
	2.1. Warrant Price
	 	3
	2.2. Extraordinary Dividends and Distributions
	 	3
	2.3. Treatment of Stock Dividends, Stock Splits, etc
	 	3
	2.4. Computation of Consideration
	 	4
	2.5 Minimum Adjustment of Warrant Quantity
	 	4
	2.6. Abandoned Dividend or Distribution
	 	4
	 
	 	 
	3. CONSOLIDATION, MERGER, ETC
	 	5
	 
	 	 
	3.1. Adjustments for Consolidation, Merger, Sale of Assets, Reorganization,
etc
	 	5
	3.2. Assumption of Obligations
	 	5
	 
	 	 
	4. OTHER DILUTIVE EVENTS
	 	5
	 
	 	 
	5. NO DILUTION OR IMPAIRMENT
	 	6
	 
	 	 
	6. ACCOUNTANTS’ REPORT AS TO ADJUSTMENTS
	 	6
	 
	 	 
	7. FINANCIAL AND BUSINESS INFORMATION
	 	7
	 
	 	 
	7.1. Filings
	 	7
	7.2. Notices of Corporate Action
	 	7
	 
	 	 
	8. RESTRICTIONS ON TRANSFER
	 	8
	 
	 	 
	8.1. Restrictive Legends
	 	8
	8.2. Transfers to Comply With the Securities Act
	 	8
	8.3. Termination of Restrictions
	 	8
	 
	 	 
	9. RESERVATION OF STOCK, ETC
	 	9

i

 

	 	 	 
	 	 	Page
	10. REGISTRATION AND TRANSFER OF WARRANTS, ETC.
	 	9
	 
	 	 
	10.1. Warrant Register; Ownership of Warrants
	 	9
	10.2. Transfer of Warrants
	 	9
	10.3. Replacement of Warrants
	 	10
	10.4. Adjustments To Warrant Quantity
	 	10
	10.5 Fractional Shares
	 	10
	 
	 	 
	11. DEFINITIONS
	 	10
	 
	 	 
	12. REMEDIES; SPECIFIC PERFORMANCE
	 	12
	 
	 	 
	13. NO RIGHTS OR LIABILITIES AS SHAREHOLDER
	 	13
	 
	 	 
	14. NOTICES
	 	13
	 
	 	 
	15. AMENDMENTS
	 	14
	 
	 	 
	16. DESCRIPTIVE HEADINGS, ETC.
	 	14
	 
	 	 
	17. LAW GOVERNING AGREEMENT
	 	14
	 
	 	 
	EXHIBIT A FORM OF SUBSCRIPTION
	 	15
	 
	 	 
	EXHIBIT B FORM OF ASSIGNMENT
	 	16

ii

 

VISEON, INC.

(Formerly RSI Systems, Inc.)

Warrant to Purchase Common Stock

Void after July 29, 2010

			
	Common Stock Warrant
	 	Las Vegas, Nevada
	Warrant No. W-PP-5-1
	 	July 30, 2005

     VISEON, INC. f/k/a RSI Systems, Inc. (the “Company”), a Nevada corporation, for
value received, hereby certifies that HENRY S. MELLON or registered assigns (the “Holder”),
is entitled to purchase from the Company up to Four Hundred Fifty Thousand (450,000) shares (the
“Warrant Quantity”) of duly authorized, validly issued, fully paid and nonassessable common
stock, par value $0.01 per share, of the Company (the “Common Stock”) at the purchase price
per share of One Dollar and Twenty-Six Cents ($1.26), at any time or from time to time prior to
5:00 p.m. Central Standard time, on July 29, 2010 (the “Expiration Date”), all subject to
the terms, conditions and adjustments set forth hereinbelow in this Warrant.

     This Warrant (the term “Warrant” shall include any such warrants issued in
substitution or as a replacement herefor) is issued in connection with that certain Warrant
Purchase Agreement dated July 20, 2005 entered into by and between the Company and HENRY S. MELLON.
This Warrant, so issued, originally evidences the right to purchase a number of shares of Common
Stock equal to the Warrant Quantity, subject to adjustment, if any, as provided herein.
Concurrently herewith, the Company and Holder are also entering into that certain Piggy Back
Registration Rights Agreement (hereinafter the “Registration Rights Agreement”) concerning
the underlying shares of Common Stock to be issued on the exercise hereof. Certain capitalized
terms used in this Warrant are defined in Section 11, any capitalized term not defined in Section
11 shall have the meaning ascribed in the Registration Rights Agreement or other Investment
Documents; references to an “Exhibit” are, unless otherwise specified, to one of the Exhibits
attached to this Warrant and references to a “Section” are, unless otherwise specified, to one of
the Sections of this Warrant.

1. Exercise of Warrant.

     1.1 Manner of Exercise. This Warrant may be exercised by the Holder, in whole or in
part, during normal business hours on any Business Day, by surrender of this Warrant to the Company
at its principal office, accompanied by the Form of Subscription in substantially the form attached
as Exhibit A to this Warrant (or a reasonable facsimile thereof) duly executed by the Holder and
accompanied by payment, in cash, by wire transfer, certified check or official bank check payable
to the order of the Company, or in the manner provided in Section 1.5 (or by any combination of
such methods), in the amount obtained by multiplying (a) the number of shares of Common Stock
designated in such Form of Subscription by (b) One Dollar and Twenty-Six Cents ($1.26), and such
Holder shall thereupon be entitled to receive such number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) on
the Effective Date of Exercise.

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     1.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the Effective Date of Exercise. At
such time the Person or Persons in whose name or names any certificate or certificates for shares
of Common Stock (or Other Securities) shall be issuable upon such exercise, as provided in Section
1.3, shall be deemed to have become the Holder or holders of record thereof.

     1.3 Delivery of Stock Certificates, etc. As soon as practicable after each exercise
of this Warrant, in whole or in part, and in any event within ten Business Days following the
Effective Date of Exercise, the Company at its expense (including the payment by it of any
applicable transfer taxes) will cause to be issued in the name of and delivered to the Holder
hereof or, subject to Section 8, as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct,

     (a) a certificate or certificates for the number of duly authorized, validly issued,
fully paid and nonassessable shares, including, if the Company so elects, fractional shares,
of Common Stock (or Other Securities) to which such Holder shall be entitled upon such
exercise plus, at the discretion of the Company, in lieu of any fractional share to which
such Holder would otherwise be entitled, cash in an amount equal to the same fraction of the
Current Market Price per share on the Business Day next preceding the date of such exercise,
and

     (b) in case such exercise is in part only, a new Warrant or Warrants of like tenor,
calling in the aggregate on the face or faces thereof for the number of shares of Common
Stock equal (without giving effect to any adjustment thereof) to the number of such shares
called for on the face of this Warrant minus the number of such shares designated by the
Holder upon such exercise as provided in Section 1.1.

In lieu of physical delivery of the shares being issued upon exercise, provided that the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Holder and in compliance with the
provisions hereof, the Company shall use its reasonable efforts to cause its transfer agent to
electronically transmit the shares being issued to the Holder by crediting the account of the
Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission system. The time
period for delivery described herein shall apply to the electronic transmittals described herein.

     1.4 Company to Reaffirm Obligations. The Company will, at the time of each exercise
of this Warrant, upon the request of the Holder, acknowledge in writing its continuing obligation
to afford to such Holder all rights to which such Holder shall continue to be entitled after such
exercise in accordance with the terms of this Warrant, provided that if the Holder shall fail to
make any such request, such failure shall not affect the continuing obligation of the Company to
afford such rights to such Holder.

     1.5 Payment by Application of Shares Otherwise Issuable. Upon any exercise of this
Warrant, the Holder may, at its option, instruct the Company, by written notice accompanying the surrender of this
Warrant at the time of such exercise, to apply to the payment required by Section 1.1 such number
of the shares of Common Stock otherwise issuable to such Holder upon such exercise as shall be
specified in such notice, in which case an amount equal to the excess of the aggregate Current
Market Price of such specified number of shares on the date

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of exercise over the portion of the
payment required by Section 1.1 attributable to such shares shall be deemed to have been paid to
the Company and the number of shares issuable upon such exercise shall be reduced by such specified
number.

     1.6 Tax Basis. The Company and the Holder shall mutually agree as to the tax basis of
this Warrant for purposes of the Internal Revenue Code of 1986, as
amended (the “Code”),
and the treatment of this Warrant under the Code by each of the Company and the Holder shall be
consistent with such agreement.

2. Adjustment of Common Stock Issuable Upon Exercise. This Warrant initially evidences the
right to purchase a number of shares of Common Stock equal to the Warrant Quantity, subject to
adjustment as provided in this Section 2.

     2.1 Warrant Price. The “Warrant Price” shall be fixed at One Dollar and
Twenty-Six Cents ($1.26) per share of Common Stock received upon exercise of this Warrant.

     2.2 Extraordinary Dividends and Distributions. In the event that the Company at any
time or from time to time after the date hereof shall declare, order, pay or make a dividend or
other distribution (including, without limitation, any distribution of other or additional stock or
other securities or property or Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on the Common Stock other than (a) a dividend
payable in Additional Shares of Common Stock or (b) a regularly scheduled cash dividend payable out
of consolidated earnings or earned surplus, determined in accordance with generally accepted
accounting principles, then, in each such case, subject to Section 2.6, the Warrant Quantity in
effect immediately prior to the close of business on the record date fixed for the determination of
holders of any class of securities entitled to receive such dividend or distribution shall be
increased, effective as of the close of business on such record date, to an amount determined by
multiplying such Warrant Quantity by a fraction

     (x) the numerator of which shall be the Current Market Price in effect on such record
date or, if the Common Stock trades on an ex-dividend basis, on the date prior to the
commencement of ex-dividend trading, and

     (y) the denominator of which shall be such Current Market Price, less the amount of
such dividend or distribution (as determined in good faith by the Board of Directors of the
Company) applicable to one share of Common Stock,

provided that, in the event that the amount of such dividend as so determined is equal to or
greater than 10% of such Current Market Price or in the event that such fraction is greater than
10/9, in lieu of the foregoing adjustment, adequate provision shall be made so that the Holder of
this Warrant shall
receive a pro rata share of such dividend based upon the maximum number of shares of Common Stock
at the time issuable to such Holder.

     2.3 Treatment of Stock Dividends, Stock Splits, etc. In the event that the Company at
any time or from time to time after the date hereof shall declare or pay any dividend on the Common
Stock payable in Common Stock, or shall effect a subdivision of the outstanding shares of Common
Stock into a greater number of shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), then, and in each such case, Additional Shares of Common
Stock shall be deemed to have been issued (a) in the case of any

Page-3

 

such dividend, immediately after
the close of business on the record date for the determination of holders of any class of
securities entitled to receive such dividend, or (b) in the case of any such subdivision, at the
close of business on the day immediately prior to the day upon which such corporate action becomes
effective.

     2.4 Computation of Consideration. For the purposes of this Section 2,

     (a) the consideration for the issue or sale of any Additional Shares of Common Stock
shall, irrespective of the accounting treatment of such consideration,

     (i) insofar as it consists of cash, be computed at the net amount of cash
received by the Company, without deducting any expenses paid or incurred by the
Company or any commissions or compensations paid or concessions or discounts allowed
to underwriters, dealers or others performing similar services in connection with
such issue or sale,

     (ii) insofar as it consists of property (including securities) other than cash,
be computed at the fair value thereof at the time of such issue or sale, as
determined in good faith by the Board of Directors of the Company, and

     (iii) in case Additional Shares of Common Stock are issued or sold together
with other stock or securities or other assets of the Company for a consideration
which covers both, be the portion of such consideration so received, computed as
provided in clauses (i) and (ii) above, allocable to such Additional Shares of
Common Stock, all as determined in good faith by the Board of Directors of the
Company;

     (b) Additional Shares of Common Stock deemed to have been issued pursuant to Section
2.2, relating to stock dividends, stock splits, etc., shall be deemed to have been issued
for no consideration.

     2.5 Minimum Adjustment of Warrant Quantity. If the amount of any adjustment of the
Warrant Quantity required pursuant to this Section 2 would be less than one tenth (1/10) of one
percent (1%) of the Warrant Quantity in effect at the time such adjustment is otherwise so required
to be made, such amount shall be carried forward and adjustment with respect thereto made at the
time of and together with any subsequent adjustment which, together with such amount and any other
amount or amounts so carried
forward, shall aggregate at least one tenth (1/10) of one percent (1%) of such Warrant
Quantity. All calculations under this Warrant shall be made to the nearest one-hundredth of a
share.

     2.6 Abandoned Dividend or Distribution. If the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a dividend or other
distribution (which results in an adjustment to the Warrant Quantity under the terms of this
Warrant) and shall, thereafter, and before such dividend or distribution is paid or delivered to
shareholders entitled thereto, legally abandon its plan to pay or deliver such dividend or
distribution, then any adjustment made to the Warrant Quantity by reason of the taking of such
record shall be reversed, and any subsequent adjustments, based thereon, shall be recomputed.

Page-4

 

3. Consolidation, Merger, etc.

     3.1 Adjustments for Consolidation, Merger, Sale of Assets, Reorganization, etc. In
case the Company after the date hereof (a) shall consolidate with or merge into any other Person
and shall not be the continuing or surviving corporation of such consolidation or merger, or (b)
shall permit any other Person to consolidate with or merge into the Company and the Company shall
be the continuing or surviving Person but, in connection with such consolidation or merger, the
Common Stock or Other Securities shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property, or (c) shall transfer all or substantially all
of its properties or assets to any other Person, or (d) shall effect a capital reorganization or
reclassification of the Common Stock or Other Securities (other than a capital reorganization or
reclassification resulting in the issue of Additional Shares of Common Stock for which adjustment
in the Warrant Quantity is provided in Section 2.2), then, and in the case of each such
transaction, proper provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder, upon the exercise hereof at any time after the consummation
of such transaction, shall be entitled to receive (at the aggregate Warrant Price in effect at the
time of such consummation for all Common Stock or Other Securities issuable upon such exercise
immediately prior to such consummation), in lieu of the Common Stock or Other Securities issuable
upon such exercise prior to such consummation, the highest amount of securities, cash or other
property to which such Holder would actually have been entitled as a shareholder upon such
consummation if such Holder had exercised the rights represented by this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly equivalent as possible
to the adjustments provided for herein.

     3.2 Assumption of Obligations. Notwithstanding anything contained in the Warrant or
in any other Investment Document to the contrary, the Company will not effect any of the
transactions described in clauses (a) through (d) of Section 3.1 unless, prior to the consummation
thereof, each Person (other than the Company) which may be required to deliver any stock,
securities, cash or property upon the exercise of this Warrant as provided herein shall assume, by
written instrument delivered to the Holder, (a) the obligations of the Company under this
Warrant (if the Company shall survive the consummation of such transaction, such assumption shall
be in addition to, and shall not release the Company from, any continuing obligations of the
Company under this Warrant), (b) the obligations of the Company under each other Investment
Document and (c) and the obligation to deliver to such Holder such shares of stock,
securities, cash or property as, in accordance with the foregoing provisions of this Section 3,
such Holder may be entitled to receive. In addition, such Person shall have delivered to such
Holder an opinion of counsel for such Person, which counsel shall be reasonably satisfactory to
such Holder, stating that this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of this Section 3) shall be
applicable to the stock, securities, cash or property which such Person may be required to deliver
upon any exercise of this Warrant or the exercise of any rights pursuant hereto.

4. Other Dilutive Events. In case any event shall occur as to which the provisions of
Section 2 or Section 3 are not strictly applicable but the failure to make any adjustment would not
fairly protect the purchase rights represented by this Warrant in
accordance with the essential intent and principles of such Sections, then, in each such case, upon
receipt of a written request by the Holder, the Company shall appoint a firm of independent
certified public accountants of recognized national standing (which may be the regular auditors of
the Company), which shall

Page-5

 

give their opinion upon the adjustment, if any, on a basis consistent
with the essential intent and principles established in Sections 2 and 3, necessary to preserve,
without dilution, the purchase rights represented by this Warrant. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the Holder and shall make the adjustments
described therein, if any.

5. No Dilution or Impairment. The Company will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (a) shall not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to exceed the amount
payable therefor upon such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and nonassessable
shares of stock, free from all taxes, liens, security interests, encumbrances, preemptive rights
and charges on the exercise of the Warrants from time to time outstanding, (c) will not take any
action which results in any adjustment of the Warrant Quantity if the total number of shares of
Common Stock (or Other Securities) issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock (or Other Securities) then
authorized by the Company’s certificate of incorporation and available for the purpose of issue
upon such exercise, and (d) will not issue any capital stock of any class which is preferred as to
dividends or as to the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding-up, unless the rights of the holders thereof shall be limited to a fixed sum
or percentage of par value or a sum determined by reference to a formula based on a published index
of interest rates, an interest rate publicly announced by a financial institution or a similar
indicator of interest rates in respect of participation in dividends and to a fixed sum or
percentage of par value in any such distribution of assets.

6. Accountants’ Report as to Adjustments. In each case of any adjustment or readjustment
in the shares of Common Stock (or Other Securities) issuable upon the exercise of this Warrant, the
Company at its expense will promptly compute such adjustment or readjustment in accordance with the
terms of this Warrant and cause independent certified public accountants of recognized national
standing (which may be the regular auditors of the Company) selected by the Company to verify such
computation (other than any computation of the fair value of property as determined in good faith
by the Board of Directors of the Company) and prepare a report setting forth such adjustment or
readjustment and showing in reasonable detail the method of calculation thereof and the facts upon
which such adjustment or readjustment is based, including a statement of (a) the consideration
received or to be received by the Company for any Additional Shares of Common Stock issued or sold
or deemed to have been issued, (b) the number of shares of Common Stock outstanding or deemed to be
outstanding, and (c) the Warrant Quantity in effect immediately prior to such issue or sale and as
adjusted and readjusted (if required by Section 2) on account thereof. The Company will forthwith
mail a copy of each such report to each Holder of a Warrant and will, upon the written request at
any time of any Holder of a Warrant,
furnish to such Holder a like report setting forth the Warrant Quantity at the time in effect and
showing in reasonable detail how it was calculated. The Company will also keep copies of all such
reports at its principal office and will cause the same to be available for

Page-6

 

inspection at such
office during normal business hours by any Holder of a Warrant or any prospective purchaser of a
Warrant designated by the Holder thereof.

7. Financial and Business Information.

     7.1 Filings. During any period when the Company is a Public Company, the Company will
file on or before the required date (including all applicable extensions) all required regular or
periodic reports (pursuant to the Exchange Act) with the Commission and will deliver to the Holder
promptly upon their becoming available one copy of each report, notice or proxy statement sent by
the Company to its stockholders generally, and of each regular or periodic report (pursuant to the
Exchange Act) and any registration statement, prospectus or written communication (other than
transmittal letters) (pursuant to the Securities Act), filed by the Company with (i) the Commission
or (ii) any securities exchange on which shares of Common Stock are listed.

     7.2 Notices of Corporate Action. In the event of

     (a) any taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any dividend
(other than a regular periodic dividend payable in cash out of earned surplus in an amount
not exceeding the amount of the immediately preceding cash dividend for such period) or
other distribution, or any right to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities or property, or to receive any other right, or

     (b) any capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any consolidation or merger involving the Company and
any other Person, any transaction or series of transactions in which more than 50% of the
Voting Securities of the Company are transferred to another Person or any transfer, sale or
other disposition of all or substantially all the assets of the Company to any other Person,
or

     (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company,

the Company will mail to the Holder a notice specifying (i) the date or expected date on which any
such record is to be taken for the purpose of such dividend, distribution or right, and the amount
and character of such dividend, distribution or right, and (ii) the date or expected date on which
any such reorganization, reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up is to take place and the time, if any such time is to be
fixed, as of which the holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, sale, disposition, liquidation or winding-up. Such notice shall be mailed
at least ten (10) days prior to the date therein specified.

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8. Restrictions on Transfer.

     8.1 Restrictive Legends. Except as otherwise permitted by this Section 6, each
Warrant (including each Warrant issued upon the transfer of any Warrant) shall be stamped or
otherwise imprinted with a legend in substantially the following form:

“THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THIS WARRANT.”

Except as otherwise permitted by this Section 8, each certificate for Common Stock (or Other
Securities) issued upon the exercise of any Warrant, and each certificate issued upon the transfer
of any such Common Stock (or Other Securities), shall be stamped or otherwise imprinted with a
legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE,
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND SUCH LAWS.”

     8.2 Transfer to Comply With the Securities Act. Restricted Securities may not be
sold, assigned, pledged, hypothecated, encumbered or in any manner transferred or disposed of, in
whole or in part, except in compliance with the provisions of the Securities Act and state
securities or Blue Sky laws and the terms and conditions hereof.

     8.3 Termination of Restrictions. The restrictions imposed by this Section 5 on the
transferability of Restricted Securities shall cease and terminate as to any particular Restricted
Securities (a) when a registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) when such securities are sold pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, or (c) when, in the opinion of
both counsel for the Holder and counsel for the Company, such restrictions are no longer required
or necessary in order to protect the Company against a violation of the Securities Act

Page-8

 

upon any sale or other disposition of such securities without registration thereunder.
Whenever such restrictions shall cease and terminate as to any Restricted Securities, the Holder
shall be entitled to receive from the Company, without expense, new securities of like tenor not
bearing the applicable legends required by Section 6.1.

9. Reservation of Stock, etc. The Company shall at all times reserve and keep available,
solely for issuance and delivery upon exercise of this Warrant, the number of shares of Common
Stock (or Other Securities) from time to time issuable upon exercise of this entire Warrant at the
time outstanding. All shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be validly issued and,
in the case of shares, fully paid and nonassessable with no liability on the part of the holders
thereof, and, in the case of all securities, shall be free from all taxes, liens, security
interests, encumbrances, preemptive rights and charges. The transfer agent for the Common Stock,
which may be the Company (“Transfer Agent”), and every subsequent Transfer Agent for any
shares of the Company’s capital stock issuable upon the exercise of any of the purchase rights
represented by this Warrant, are hereby irrevocably authorized and directed at all times until the
Expiration Date to reserve such number of authorized and unissued shares as shall be requisite for
such purpose. The Company shall keep copies of this Warrant on file with the Transfer Agent for
the Common Stock and with every subsequent Transfer Agent for any shares of the Company’s capital
stock issuable upon the exercise of the rights of purchase represented by this Warrant. The
Company shall supply such Transfer Agent with duly executed stock certificates for such purpose.
All Warrant certificates surrendered upon the exercise of the rights thereby evidenced shall be
canceled, and such canceled Warrants shall constitute sufficient evidence of the number of shares
of stock that have been issued upon the exercise of such Warrants. Subsequent to the Expiration
Date, no shares of stock need be reserved in respect of any unexercised Warrant.

10. Registration and Transfer of Warrants, etc.

     10.1 Warrant Register; Ownership of Warrants. Each Warrant issued by the Company
shall be numbered and shall be registered in a warrant register (the “Warrant Register”) as
it is issued and transferred, which Warrant Register shall be maintained by the Company at its
principal office or, at the Company’s election and expense, by a Warrant Agent or the Company’s
transfer agent. The Company shall be entitled to treat the registered Holder of any Warrant on
the Warrant Register as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the part of any other
Person, and shall not be affected by any notice to the contrary, except that, if and when any
Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the
bearer thereof as the owner of such Warrant for all purposes. Subject to Section 9, a Warrant, if
properly assigned, may be exercised by a new holder without a new Warrant first having been issued.

     10.2 Transfer of Warrants. Subject to compliance with Section 5, this Warrant and all
rights hereunder are transferable in whole or in part, without charge to the Holder hereof, upon
surrender of this Warrant with a properly executed Form of Assignment attached hereto as Exhibit B
at the principal office of the Company. Upon any partial transfer, the Company shall at its
expense issue and deliver to the Holder a new Warrant of like tenor, in the name of the Holder,
which shall be exercisable for such number of shares of Common Stock with respect to which rights
under this Warrant were not so transferred.

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     10.3 Replacement of Warrants. On receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office and cancellation
thereof, the Company at its expense shall execute and deliver, in lieu thereof, a new Warrant of
like tenor.

     10.4 Adjustments To Warrant Quantity. Notwithstanding any adjustment in the Warrant
Quantity or in the number or kind of shares of Common Stock purchasable upon exercise of this
Warrant, any Warrant theretofore or thereafter issued may continue to express the same number and
kind of shares of Common Stock as are stated in this Warrant, as initially issued.

     10.5 Fractional Shares. Notwithstanding any adjustment pursuant to any provision of
this Warrant, the Company may, but shall not be required to, issue fractions of shares upon
exercise of this Warrant or to distribute certificates which evidence fractional shares. In lieu
of fractional shares, the Company shall make payment to the Holder, at the time of exercise of this
Warrant as herein provided, in an amount in cash equal to such fraction multiplied by the Current
Market Price of a share of Common Stock on the date of Warrant exercise.

11. Definitions. As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:

     Additional Shares of Common Stock: All shares (including treasury shares) of Common
Stock issued or sold by the Company after the date hereof, whether or not subsequently
reacquired or retired by the Company, other than

     (a) shares issued upon the exercise of the Warrant,

     (b) such additional number of shares as may become issuable upon the exercise of the
Warrant by reason of adjustments required pursuant to provisions applicable to the
Warrant as in effect on the date hereof,

     (c) shares, warrants, options and other securities issued at any time to the Holder
or any Affiliate thereof.

     Affiliate: Any person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the applicable person. For
purposes of this definition “control” has the meaning specified in Rule 12b-2 under the
Exchange Act.

     Business Day: Any day other than a Saturday or a Sunday or a day on which commercial
banking institutions in the City of Nevada are authorized by law to be closed. Any
reference to “days” (unless Business Days are specified) shall mean calendar days.

     Code: As defined in Section 1.6.

     Commission: The Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act.

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     Common Stock: As defined in the introduction to this Warrant, such term to include any
stock into which such Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock, and all other stock of any class or classes (however
designated) of the Company the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and liquidating
dividends after the payment of dividends and distributions on any shares entitled to
preference.

     Company: As defined in the introduction to this Warrant, such term to include any
corporation, which shall succeed to or assume the obligations of the Company hereunder in
compliance with Section 3.

     Convertible Securities: Any evidences of indebtedness, shares of stock (other than
Common Stock) or other securities directly or indirectly convertible into or exchangeable
for Additional Shares of Common Stock.

     Effective Date of Exercise: The first Business day which occurs following the
expiration of ninety (90) days from the date the company receives the Form of Subscription
and payment as set forth in Section 1.1.

     Exchange Act: The Securities Exchange Act of 1934, or any similar federal statute, and
the rules and regulations of the Commission thereunder, all as the same shall be in effect
at the time.

     Expiration Date: As defined in the introduction to this Warrant.

     Holder: As defined in the introduction to this Warrant.

     Investment Documents: The documents executed by and between the Company and the
Investor dated July 20, 2005 in furtherance of the consummation of the transactions
contemplated hereby, including this Agreement, the Subscription Agreement, the Warrant and
the Registration Rights Agreement, all as the same may be modified or amended from time to
time.

     Market Price or Current Market Price: On any date specified herein, the amount per
share of the Common Stock, equal to (a) the last reported sale price of such Common Stock,
regular way, on such date or, in case no such sale takes place on such date, the average of
the closing bid and asked prices thereof regular way on such date, in either case as
officially reported on the principal national securities exchange on which such Common Stock
is then listed or admitted for trading, or (b) if such Common Stock is not then listed or
admitted for trading on any national securities exchange but is designated as a national
market system security by the NASD, the last reported trading price of the Common Stock on
such date, or (c) if there shall have been no trading on such date or if the Common Stock is
not so designated, the average of the closing bid and asked prices of the Common Stock on
such date as shown by the NASD automated quotation system, or (d) if such Common Stock is
not then listed or admitted for trading on any national exchange or quoted in the
over-the-counter market, the higher of (x) the book value thereof as determined by any firm
of independent public accountants of recognized standing selected by the Board of Directors
of the Company as of the last day

Page-11

 

of any month ending within 60 days preceding the date as of which the determination is
to be made and (y) the fair value thereof (as of a date which is within 20 days of the date
as of which the determination is to be made) determined in good faith by the Board of
Directors of the Company.

     NASD: The National Association of Securities Dealers, Inc.

     Other Securities: Any stock (other than Common Stock) and other securities of the
Company or any other Person (corporate or otherwise), which the Holders of the Warrants at
any time shall be entitled to receive, or shall have received, upon the exercise of the
Warrants, in lieu of or in addition to Common Stock, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Common Stock or Other
Securities.

     Person: An individual, firm, partnership, corporation, professional corporation,
trust, joint venture, association, joint stock company, limited liability company,
unincorporated organization or any other entity or organization, including a government or
agency or political subdivision thereof, and shall include any successor (by merger or
otherwise) of such entity.

     Restricted Securities: (a) any Warrants bearing the applicable legend set forth in
Section 5.1, (b) any shares of Common Stock (or Other Securities) issued or issuable upon
the exercise of Warrants which are evidenced by a certificate or certificates bearing the
applicable legend set forth in such Section, and (c) any shares of Common Stock (or Other
Securities) issued subsequent to the exercise of any of the Warrants as a dividend or other
distribution with respect to, or resulting from a subdivision of the outstanding shares of
Common Stock (or other Securities) into a greater number of shares by reclassification,
stock splits or otherwise, or in exchange for or in replacement of the Common Stock (or
Other Securities) issued upon such exercise, which are evidenced by a certificate or
certificates bearing the applicable legend set forth in such Section.

     Securities Act: The Securities Act of 1933, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in effect at
the time.

     Voting Securities: Stock of any class or classes (or equivalent interests), if the
Holders of the stock of such class or classes (or equivalent interests) are ordinarily, in
the absence of contingencies, entitled to vote for the election of the directors (or persons
performing similar functions) of such business entity, even though the right so to vote has
been suspended by the happening of such a contingency.

     Warrant: As defined in the introduction to this Warrant.

     Warrant Price: As defined in Section 2.

     Warrant Quantity: As defined in the introduction to this Warrant.

12. Remedies; Specific Performance. The Company stipulates that there would be no adequate
remedy at law to the Holder of this Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this

Page-12

 

Warrant and accordingly, the Company agrees that, in addition to any other remedy to which the
Holder may be entitled at law or in equity, the Holder shall be entitled to seek to compel specific
performance of the obligations of the Company under this Warrant, without the posting of any bond,
in accordance with the terms and conditions of this Warrant in any court of the United States or
any State thereof having jurisdiction, and if any action should be brought in equity to enforce any
of the provisions of this Warrant, the Company shall not raise the defense that there is an
adequate remedy at law. Except as otherwise provided by law, a delay or omission by the Holder
hereto in exercising any right or remedy accruing upon any such breach shall not impair the right
or remedy or constitute a waiver of or acquiescence in any such breach. No remedy shall be
exclusive of any other remedy. All available remedies shall be cumulative.

13. No Rights or Liabilities as Shareholder. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof any rights as a shareholder of the Company or as
imposing any obligation on the Holder to purchase any securities or as imposing any liabilities on
the Holder as a shareholder of the Company, whether such obligation or liabilities are asserted by
the Company or by creditors of the Company. The Holder hereof shall not acquire any rights as a
shareholder of the Company until the day following the Effective Date of Exercise.

14. Notices. Any notice or other communication required or permitted hereunder shall be
deemed given if in writing and delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally or sent by overnight air courier or facsimile
transmission or, if mailed, two days after the date of deposit in the United States mail, as
follows:

If to Holder:

Henry S. Mellon

4 Driftwood Landing

Gulfstream, Florida 33483

If to Viseon, Inc.:

Viseon, Inc.

Attn: President

545 E. John Carpenter Freeway, Suite 1420

Irving, TX 75062

Facsimile: 214-424-5785

With a copy to:

Albert B. Greco, Jr.

Law Offices of Albert B. Greco, Jr.

16901 N. Dallas Parkway, Suite 230

Addison, Texas 75001

Facsimile: 972-818-7343

Any party may be given notice in accordance with this Section by any other party at another address
or person for receipt of notices, if such party so designates such other person or address in
writing in accordance with this Section 11. The Company shall give Notice to any subsequent Holder
at such address as it appears in the Warrant Register.

Page-13

 

All such notices and communications (and deliveries) shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; when receipt is acknowledged, if telecopied;
on the next Business Day, if timely delivered to a courier guaranteeing overnight delivery; and
five days after being deposited in the mail, if sent first class or certified mail, return receipt
requested, postage prepaid; provided, that the exercise of any Warrant shall be effective in the
manner provided in Section 1.

15. Amendments. This Warrant and any term hereof may not be amended, modified,
supplemented or terminated, and waivers or consents to departures from the provisions hereof may
not be given, except by written instrument duly executed by the party against which enforcement of
such amendment, modification, supplement, termination or consent to departure is sought.

16. Descriptive Headings, etc. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning of terms contained herein.
Unless the context of this Warrant otherwise requires: (1) words of any gender shall be deemed to
include each other gender; (2) words using the singular or plural number shall also include the
plural or singular number, respectively; (3) the words “hereof”, “herein” and “hereunder” and words
of similar import when used in this Warrant shall refer to this Warrant as a whole and not to any
particular provision of this Warrant, and Section and paragraph references are to the Sections and
paragraphs of this Warrant unless otherwise specified; (4) the word “including” and words of
similar import when used in this Warrant shall mean “including, without limitation,” unless
otherwise specified; (5) “or” is not exclusive; and (6) provisions apply to successive events and
transactions.

17. Law Governing Agreement. This Agreement shall be interpreted, construed and enforced
and its construction and performance shall be governed by the laws of the State of Nevada without
regard to principles of conflicts of laws, except to the extent that Federal law may apply.

Viseon, Inc.

     (Formerly RSI Systems, Inc.)

	 	 	 
	   
	By:

	 	John Harris
	Its:

	 	Chief Executive Officer

Page-14

 

Exhibit A 

FORM OF SUBSCRIPTION

[To be executed only upon exercise of Warrant]

To: Viseon, Inc.:

The undersigned registered holder of the within Warrant hereby irrevocably exercises such Warrant
for, and purchases thereunder,                     * shares of Common stock of Viseon, Inc.
(Formerly RSI Systems, Inc.) and herewith makes payment of $                     therefor, and
requests that the certificates for such shares be issued in the name of, and delivered to
                                                            , whose address is                                                                                 

	 	 
	 

	.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Signature must conform in all respects to the name
of holder as specified on the face of Warrant)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(Street Address)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(City) (State) Zip Code)

 

			
	*	 	Insert here the number of shares called for on
the face of this Warrant (or, in the case of a partial exercise, the portion
thereof as to which this Warrant is being exercised), in either case without
making any adjustment for any other securities or property or cash which,
pursuant to the adjustment provisions of this Warrant, may be delivered upon
exercise. In the case of partial exercise, a new Warrant or Warrants will be
issued and delivered, representing the unexercised portion of the Warrant, to
the holder surrendering the Warrant.

 

 

Exhibit B

FORM OF ASSIGNMENT

[To be executed only upon assignment of Warrant]

For value received, the undersigned registered holder of the within Warrant hereby sells,
assigns and transfers unto ___ the right represented by such
Warrant to purchase ___ shares of Common Stock of
Viseon, Inc. (Formerly RSI Systems, Inc.), to which such Warrant relates, and appoints
___ , Attorney to make such transfer on the books of Viseon,
Inc. (Formerly RSI Systems, Inc.), maintained for such purpose, with full power of substitution in
the premises.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	(Signature must conform in all respects to the name
of holder as specified on the face of Warrant)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(Street Address)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(City) (State) Zip Code)

Signed in the presence of:

	 	 	 
	 

 

	 	  
	 
	 	 
	 

(printed name)
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

(printed name)

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