Document:

exv4w5

 

EXHIBIT 4.5

CERTIFICATE OF DESIGNATION

ESTABLISHING THE

SERIES B CONVERTIBLE PREFERRED STOCK

OF

Viseon, inc.

     VISEON, INC., a corporation organized and existing under the Nevada Revised Statutes (the
“Company”),

     DOES HEREBY CERTIFY:

     That, pursuant to the authority conferred upon the Board of Directors of the Company (the
“Board”) by the Articles of Incorporation of the Company, and pursuant to the provisions of Chapter
78-315, 78-915, and 78-1955 of the Nevada Revised Statutes, the Board, by unanimous written consent
on August ___, 2005, adopted the following resolution providing for the rights, designation, number,
powers, preferences, limitations, restrictions, relative rights, and other matters relating to a
series of preferred stock of the Company (the “Preferred Stock”):

     RESOLVED, that the Company amend Article Five of its Articles of Incorporation to create and
issue a series of Preferred Stock to be designated the “Series B Convertible Preferred Stock” by
adding the following subsections to Article Five, and that the Board does hereby fix and determine
the rights, designation, number, powers, preferences, limitations, restrictions, and relative
rights and other matters relating to such shares of Series B Convertible Preferred Stock as
follows:

     1. Designation and Number.

     A series of the preferred stock, designated the “Series B Convertible Preferred Stock,” $0.01 par
value, (the “Series B Preferred Stock”), is hereby established. The number of shares of the Series
B Preferred Stock shall be Five Hundred (500). For the purposes of these Articles of
Incorporation, the original issue price of the Series B Preferred Stock shall be deemed to be
Twenty-Five Thousand Dollars ($25,000) per share (the “Original Issue Price”). The
rights, preferences, privileges and restrictions granted to and imposed on the Series B Preferred
Stock are as set forth in this Article Five.

     2. Ranking.

     The Series B Preferred Stock shall rank, with respect to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the Company, (i) senior to the
Common Stock, par value $.01 per share, of the Company (the “Common Stock”) and to each other class
or series of stock of the Company (including any series of preferred stock established after August
___, 2005 by the Board of Directors) the terms of which do not expressly provide that it ranks
senior to or on a parity with the Series B Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of the Company (collectively
referred to as “Junior Securities”); (ii) on a parity with the Series A Preferred Stock and any

 

 

equity security, the terms of which expressly provide that such class or series will rank on a
parity with the Series B Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred to as “Parity
Securities”); and (iii) junior to any equity security, the terms of which expressly provide that
such class or series will rank senior to the Series B Preferred Stock as to dividend distributions
and distributions upon liquidation, winding-up and dissolution of the Company (collectively
referred to as “Senior Equity Securities”). Nothing in this Section 2 shall be deemed to limit the
approval rights in Section 6(B).

     3. Dividends.

     (A) The holders of shares of the Series B Preferred Stock shall be entitled to receive
dividends, accruing from the date of issuance (the “Series B Preferred Stock Issue Date”) or
the most recent Dividend Payment Date on which dividends have been paid at the rate per
annum of 10% of the Liquidation Preference per share (equivalent to Twenty-Five Hundred
Dollars (2,500) per annum per share of Series B Preferred Stock, as adjusted for
splits, reverse splits, stock dividends, share combinations and the like), payable quarterly
in arrears on each May 1, August 1, November 1, and February 1, commencing on November 1,
2005 (each a “Dividend Payment Date”). If any Dividend Payment Date is not a Business Day,
such payment shall be made on the next succeeding Business Day, to the holders of record as
of the preceding Dividend Payment Date, which shall be the record date for determining
Holders to receive such dividends (each, a “Record Date”). Dividends payable on the Series
B Preferred Stock will be computed on the basis of a 360-day year consisting of twelve
30-day months and will be deemed to accrue on a daily basis.

     (B) Dividends payable on the Series B Preferred Stock shall be paid in either (i)
immediately available cash funds or (ii) in shares of Common Stock of the Company, so long
as such shares are duly authorized, fully paid, non-assessable With the exception of the
dividend payable on the November 1, 2005 Dividend Payment Date, the Company shall not pay
any dividend on the shares of Series B Preferred Stock in shares of its Common Stock unless
on the relevant Dividend Payment Date there is an effective registration statement under the
Securities Act of 1933, as amended, permitting the resale of the shares of Common Stock to
be issued in payment of such dividend. The Company may elect to pay any dividend payable on
the November 1, 2005 Dividend Payment Date in shares of Common Stock of the Company without
regard to such shares being subject to an effective registration statement, provided that
the Company includes any such shares of Common Stock so issued as being offered for sale in
the registration statement filed by the Company pursuant to Section 2 of the Registration
Rights Agreements. If the Company elects to make the payment of any dividend in cash, the
Company shall provide written notice thereof to all Holders of Series B Preferred Stock as
of the applicable Record Date by depositing the same with the United States Postal Service
with postage prepaid for delivery by first class mail to such Holders’ addresses as appeared
on the Company’s books on the Record date, no less than fifteen (15) calendar days prior to
the applicable Dividend Payment Date. Unless the Company elects to pay a dividend in cash,
dividends shall be paid, subject to the foregoing, in shares of Common Stock equal
in number to the number of shares of Common Stock that the dividend payment, if paid

2

 

in cash, would purchase at a purchase price equal to the average daily Closing Price of
the Company’s Common Stock for the five consecutive Trading Days immediately preceding the
Dividend Payment Date, and the Company shall pay such dividend, including all shares (and
any cash adjustment) within five Business Days of the Dividend Payment Date for which such
payment in shares of Common Stock applies. In lieu of any fractional share of Common Stock
which would otherwise be issued in payment of a dividend on a Dividend Payment Date, the
Company shall pay a cash adjustment in respect of such fractional interest in an amount in
cash (computed to the nearest cent) equal to the Closing Price on the applicable Dividend
Payment Date multiplied by the fractional interest to the nearest 1/100th of a
percent that otherwise would have been issued in payment of such dividend. On each Dividend
Payment Date all dividends which shall have accrued on each share of Series B Preferred
Stock outstanding on such Dividend Payment Date shall accumulate and be deemed to become
“due” whether or not there shall be funds legally available for payment thereof. Any
dividend paid in cash which shall not be paid on the Dividend Payment Date on which it shall
become due (whether because of the absence of legally available funds for the payment
thereof or otherwise) shall be deemed to be “past due” until such dividend shall be paid or
until the share of Series B Preferred Stock with respect to which such dividend became due
shall no longer be outstanding, whichever is the earlier to occur. Any dividend paid in
shares of Common Stock of the Company which shall not be paid on the Dividend Payment Date
on which it shall become due (without regard to the reason for such failure) shall be deemed
to be “past due” on the fifth Business Day following the Dividend Payment Date and shall
remain “past due” until such dividend shall be paid or until the share of Series B Preferred
Stock with respect to which such dividend became due shall no longer be outstanding,
whichever is the earlier to occur. No interest, sum of money in lieu of interest, other
property or other securities shall be payable on or as a result of any dividend payment or
payments being past due. Dividends paid on shares of Series B Preferred Stock in an amount
less than the total amount of such dividends at the time accumulated and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. If the Company intends to pay any dividend in shares of Common Stock, to
the extent any holder of record of Series B Preferred Stock has previously filed a Schedule
13(g), the Company shall notify each such holder of such intention at least fifteen days
prior to the applicable Dividend Payment Date. As soon as practicable following receipt of
such notice, but in any event no later than five days prior to the applicable Dividend
Payment Date, any such holder to whom such dividend payment must be paid in cash pursuant to
clause (i) or (ii) below shall warrant to the Company the number of shares of Common Stock
beneficially owned by such holder and advise the Company of the applicability of clause (i)
or (ii) of the following sentence to such holder. Notwithstanding anything herein to the
contrary, in no event shall a holder of Series B Preferred Stock have the right or be
required to receive dividends payable in Common Stock, and such holder shall instead be
entitled to receive payment of dividends under this Section 3(B) in cash, (i) to the extent,
and only to the extent, that as a result of the dividend, the aggregate number of shares of
Common Stock beneficially owned by such holder, its affiliates and any “group” (as defined
in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder)
of which the holder may be deemed to be a party would exceed 4.99% of the

3

 

outstanding shares of the Common Stock following such issuance or (ii) to the extent,
and only to the extent, that prior to such dividend, the aggregate number of shares of
Common Stock beneficially owned by such holder, its affiliates and any “group” (as defined
in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder)
of which the holder may be deemed to be a party exceeds 4.99% of the outstanding shares of
the Common Stock (such provisions of clauses (i) and (ii) of this sentence “the 4.99%
Restriction”). For purposes of this Section 3(B), beneficial ownership shall be calculated
in accordance with Sections 13(d) and Section 16(a) of the Exchange Act. The provisions of
the 4.99% Restriction contained in this Section 3(B) may be waived by a holder as to itself
(and solely as to itself) (i) prior to or contemporaneously with any issuance of the Series
B Preferred Stock or (ii) upon not less than sixty-five (65) days, prior written notice to
the Company, and the provisions of this Section 3(B) shall continue to apply until such 65th
day (or later, if stated in the notice of waiver).

     (C) If dividends are not paid in full, or declared in full and sums set aside for the
payment thereof, upon the Series B Preferred Stock and any Parity Securities, subject to the
prior rights of holders of any Senior Equity Securities, all dividends declared upon shares
of the Series B Preferred Stock and such Parity Securities will when, as and if declared, be
declared pro rata so that in all cases the amount of dividends declared and paid per share
on the Series B Preferred Stock and such Parity Securities will bear to each other the same
ratio that accumulated dividends per share on the shares of Series B Preferred Stock and
such Parity Securities bear to each other. Except as set forth above, unless full cumulative
dividends on the Series B Preferred Stock have been paid, or declared and sums set aside for
the payment thereof, dividends (other than in Common Stock or other Junior Securities) may
not be paid, or declared and sums set aside for payment thereof, and other distributions may
not be made upon the Common Stock or other Junior Securities, subject to the additional
limitations contained in Section 6(B); and no shares of Common Stock nor any other Junior
Securities may be redeemed, purchased or otherwise acquired for any consideration by the
Company (except by conversion into or exchange for other Junior Securities).

     (D) Dividends on the Series B Preferred Stock shall accrue whether or not the Company
has earnings or profits, whether or not there are funds legally available for the payment of
such dividends and whether or not dividends are declared. Dividends will accumulate to the
extent they are not paid on the Dividend Payment Date for the period to which they relate.

     (E) In the event that the Company pays a dividend, or makes a distribution, to the
holders of its Common Stock (other than a dividend or distribution of Common Stock
which results in an adjustment to the Conversion Price pursuant to Section 4(E), the
holders of the Series B Preferred Stock shall, in addition to the distribution they are
entitled to receive pursuant to the foregoing provisions of this Section 3, be entitled to
participate in such dividend or distribution along with the holders of the Common Stock on
an as converted basis.

4

 

     (F) Any reference to “distribution” contained in this Section 3 shall not be deemed to
include any distribution made in connection with any liquidation, winding-up or dissolution
of the Company, as to which Section 5 shall apply.

     4. Conversion. To the extent not previously paid, all accumulated and past due dividends or
distributions on shares of Series B Preferred Stock, whether or not declared by the Company, if
any, shall be paid concurrently with any Conversion under this Section 4.

     (A) Optional Conversion

     (i) Subject to and upon compliance with the provisions of this Section 4, each
share of Series B Preferred Stock shall, at the option of the holder thereof, be
convertible at any time into that number of fully paid and non-assessable shares of
Common Stock (calculated as to each conversion to the nearest 1/100th of a share) as
is determined by dividing (x) the sum of the Original Issue Price, plus, to the
extent not paid in cash on the Business Day following the receipt of the notice of
conversion, all accrued and unpaid dividends on such shares, by (y) the Conversion
Price (as defined in Section 4(E)) in effect at the time of conversion).

     (ii) To convert Series B Preferred Stock, the holder of one or more shares of
Series B Preferred Stock to be converted shall surrender the certificate or
certificates representing such shares at any of the offices or agencies to be
maintained for such purpose by the Company and shall give written notice of
conversion in the form provided on such shares of Series B Preferred Stock (or such
other notice as is acceptable to the Company) to the Company at such office or
agency that the holder elects to convert the shares of Series B Preferred Stock
specified in said notice. Such notice shall also state the name or names, together
with address or addresses, in which the certificate or certificates for shares of
Common Stock, which shall be issuable in such conversion, shall be issued. Each
certificate representing a share of Series B Preferred Stock surrendered for
conversion shall, unless the shares issuable on conversion are to be issued in the
same name as the name in which such share is registered, be accompanied by (A)
instruments of transfer, in form reasonably satisfactory to the Company, duly
executed by the holder or his duly authorized attorney, (B) an amount sufficient to
pay any transfer or similar tax, if applicable, and (C) only if the conversion
shares are to be registered in the name of a person or entity other than the holder,
an opinion of counsel reasonably satisfactory to the Company that the issuance of
the shares issuable on conversion are exempt from the registration requirements of
the Securities Act. Within three (3) Business Days after the surrender of
certificates representing such shares of Series B Preferred Stock and the receipt of
such notice, instruments of transfer and funds, if any, as aforesaid, the Company
shall issue and shall deliver at such office or agency to such holder, or as
designated in such holder’s written instructions, a certificate or certificates for
the number of full shares of Common Stock issuable upon the conversion of such share
of Series B Preferred Stock in accordance with the provisions of this

5

 

Section 4 and a check or cash in respect of any fractional interest in a share
of Common Stock arising upon such conversion, as provided in Section 4(C).

     (iii) Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which certificates representing such shares
of Series B Preferred Stock shall have been surrendered and such notice (and any
applicable instruments of transfer and any required taxes) received by the Company
as aforesaid, and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion shall
be deemed to have become the holder or holders of record of the shares represented
thereby at such time on such date, and such conversion shall be based upon the
Conversion Price in effect at such time on such date, unless the stock transfer
books of the Company shall be closed on that date, in which event such person or
persons shall be deemed to have become such holder or holders of record at the close
of business on the next succeeding day on which such stock transfer books are open,
but such conversion shall be based upon the Conversion Price in effect on the date
upon which certificates representing such shares of Series B Preferred Stock shall
have been surrendered and such notice received by the Company.

(B) Mandatory Conversion

     (i) Each share of Series B Preferred Stock outstanding on the Mandatory
Conversion Date (as defined herein) shall automatically and without any action on
the part of the holder thereof, convert into that number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) as is determined by dividing (x) the sum of
the Original Issue Price, plus, to the extent not paid in cash on the Business Day
following the receipt by the Company of certificates representing such shares of
Series B Preferred Stock, all accrued and unpaid dividends on such shares, by (y)
the Conversion Price in effect at the time of conversion. The term “Mandatory
Conversion Date” is the date, if any, on which the average Closing Price for the
shares of Common Stock has been $3.00 (subject to adjustment as set forth in this
Section 4(B)(i)) or more and the average trading volume of the shares of Common
Stock has been 100,000 shares (as adjusted upwards for stock splits, stock dividends
and the like) or more during the same twenty (20) consecutive Trading Days during
any such twenty (20) day period commencing on or after the first Trading Day that is
more than one hundred eighty days following the Issue Date (the “Trigger Period”).

     (ii) It shall be an absolute condition to any mandatory conversion that the
Registration Statement shall be effective, with no stop-order, and with no
suspensions of resales thereunder, during the entire twenty (20) Trading Day period
of the Trigger Period.

     (iii) The $3.00 average Closing Price (the “Trigger Amount”) shall be subject
to adjustment in the event that the Company shall (i) pay a dividend or

6

 

make a distribution on its Common Stock, each in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of shares, or
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares, by multiplying the Trigger Amount by a fraction, the numerator of which is
the number of outstanding shares of Common Stock immediately prior to giving effect
to such dividend, distribution, subdivision, or combination and the denominator of
which is the number of shares of Common Stock outstanding immediately after giving
effect to such dividend, distribution, subdivision, or combination.

     (iv) On the Mandatory Conversion Date, the outstanding shares of Series B
Preferred Stock shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates representing such shares
are surrendered to the Company or its transfer agent; provided, however, that the
Company shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon conversion of any shares of Series B Preferred Stock unless
certificates evidencing such shares of Series B Preferred Stock are either delivered
to the Company or the holder notifies the Company that such certificates have been
lost, stolen, or destroyed, and executes an agreement satisfactory to the Company to
indemnify the Company from any loss incurred by it in connection therewith. Upon the
occurrence of the automatic conversion of the Series B Preferred Stock pursuant to
this Section 4(B), the holders of the Series B Preferred Stock shall surrender the
certificates representing the Series B Preferred Stock for which the Mandatory
Conversion Date has occurred to the Company and the Company shall deliver the shares
of Common Stock issuable upon such conversion within three (3) Business Days
following the date on which the Company receives the applicable certificates for the
Series B Preferred Stock from the holder.

     (v) No fractional shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of Series B Preferred Stock. In lieu of any
fractional interest in a share of Common Stock which would otherwise be deliverable
upon the conversion of any share of Series B Preferred Stock, the Company shall pay
to the holder of such shares an amount in cash (computed to the nearest cent) equal
to the Closing Price on the Business Day immediately following the day of conversion
multiplied by the fractional interest that otherwise would have been deliverable
upon conversion of such share.

     (C) Holders of Series B Preferred Stock at the close of business on a Record Date will
be entitled to receive an amount equal to the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the conversion of such shares following
such Record Date.

     (D) The “Conversion Price” shall mean and be One Dollar ($1.00), subject to adjustment
from time to time by the Company as follows:

7

 

     (i) In case the Company shall (a) pay a dividend or make a distribution on its
Common Stock, each in shares of Common Stock, (b) subdivide its outstanding shares
of Common Stock into a greater number of shares, (c) combine its outstanding shares
of Common Stock into a smaller number of shares, or (d) issue by reclassification of
its Common Stock any shares of capital stock of the Company, then in each such case
the Conversion Price in effect immediately prior to such action shall be adjusted so
that the holder of any share of Series B Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock or
other capital stock of the Company which such holder would have owned or been
entitled to receive immediately following such action had such share been converted
immediately prior to the occurrence of such event. An adjustment made pursuant to
this subsection (i) shall become effective immediately after the record date, in the
case of a dividend or distribution, or immediately after the effective date, in the
case of a subdivision, combination or reclassification. If, as a result of an
adjustment made pursuant to this subsection (i), the holder of any share of Series B
Preferred Stock thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock or shares of Common Stock and
other capital stock of the Company, the Board of Directors (whose determination
shall be conclusive, absent manifest error or absence of good faith, and shall be
described in a statement filed by the Company with the Transfer Agent) shall
determine, in good faith, the allocation of the adjusted Conversion Price between or
among shares of such classes of capital stock or shares of Common Stock and other
capital stock.

     (ii) If the Company, at any time after the Series B Preferred Stock Issue Date
and while any share of Series B Preferred Stock has not been converted and otherwise
remains outstanding:

(a) issues or sells, or is deemed to have issued or sold, any Common Stock,
other than Excluded Shares;

(b) in any manner grants, issues or sells any rights, options, warrants,
options to subscribe for or to purchase Common Stock or any stock or other
securities convertible into or exchangeable for Common Stock other than
Excluded Shares (such rights, options or warrants being herein called
“Options” and such convertible or exchangeable stock or securities being
herein called “Convertible Securities”); or

(c) in any manner issues or sells any Convertible Securities other than
Excluded Shares;

for

	 	(1)	 	with respect to paragraph
(ii)(a), a price per share, or

8

 

	 	(2)	 	with respect to paragraphs
(ii)(b) and (ii)(c), a price per share including the
consideration per share paid on issuance and exercise of the
Option or Convertible Securities

for which Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of such Convertible Securities is

less than the Conversion Price then in effect immediately prior to such issuance,
sale or grant, then, concurrently with such issuance, sale or grant, the Conversion
Price shall be reduced to the amount of the consideration per share received by the
Company for such issue or deemed issue of the additional shares of Common Stock;
provided that if such issuance or deemed issuance was without consideration, then
the Corporation shall be deemed to have received an aggregate of $.01 of
consideration for all such additional shares of Common Stock issued or deemed to be
issued. No modification of the issuance terms shall be made upon the actual
issuance of such Common Stock upon exercise, conversion or exchange of such Options
or Convertible Securities. If there is a change at any time in (i) the exercise
price provided for in any Options, (ii) the additional consideration, if any,
payable upon the issuance, conversion or exchange of any Convertible Securities or
(iii) the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock, then immediately after such change the Conversion
Price shall be adjusted to the Conversion Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided for
such changed exercise price, additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold; provided that no
adjustment shall be made if such adjustment would result in an increase of the
Conversion Price then in effect.

     (iii) In case the Company shall, by dividend or otherwise, distribute to all
holders of its outstanding Common Stock any capital stock (other than Common Stock),
evidences of its indebtedness or assets or rights or warrants to subscribe for or
purchase securities of the Company (excluding those referred to in subsection (ii)
of this Section 4(E) and dividends or distributions payable in stock for which
adjustment is made pursuant to subsection (i) of this Section 4(E) and dividends and
distributions or rights or warrants to subscribe for or purchase securities of the
Company paid in cash out of the retained earnings of the Company and distributions
upon mergers or consolidations to which Section 4(i) applies), then in each such
case the Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to the
record date of such distribution by a fraction of which the numerator shall be the
average Closing Price of the Common Stock for the twenty (20) consecutive Trading
Days preceding the record date less the fair market value on such record date (as
determined by the Board of Directors, whose determination shall be conclusive and
shall be described in a statement filed by the Company with the Transfer Agent) of
the portion of the capital stock or assets or the evidences of indebtedness or
assets so distributed to the holder of one share of Common Stock or of such
subscription rights or warrants applicable to one

9

 

share of Common Stock, and of which the denominator shall be such average
Closing Price of the Common Stock for the twenty (20) consecutive Trading Days
preceding the record date. Such adjustment shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
distribution.

     For the purposes of this Section 4(E), the consideration for the issue or sale of any
securities of the Company shall, irrespective of the accounting treatment of such
consideration, (x) 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, and (y)
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.

     No adjustment in the Conversion Price shall be required to be made unless such
adjustment would require an increase or decrease of at least one percent of such price;
provided, however, that any adjustment which by reason of this subsection (iv) is not
required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4(E) shall be made to the nearest cent or
to the nearest 1/100th of a share, as the case may be. Anything in this Section
4(E) to the contrary notwithstanding, the Company shall be entitled to make such reduction
in the Conversion Price, in addition to those required by this Section 4(E), as it in its
discretion shall determine to be advisable in order that any stock dividend, subdivision of
shares, distribution of rights to purchase stock or securities, or distribution of
securities convertible into or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable to the recipients.

     Whenever the Conversion Price is adjusted as herein provided, (A) the Company shall
promptly file with the Transfer Agent a certificate setting forth the Conversion Price after
such adjustment and a brief statement of the facts requiring such adjustment and the manner
of computing the same, which certificate shall be conclusive evidence of the correctness of
such adjustment, and (B) the Company shall also mail or cause to be mailed by first class
mail, postage prepaid, as soon as practicable to each holder of record of shares of Series B
Preferred Stock a notice stating that the Conversion Price has been adjusted and setting
forth the adjusted Conversion Price. The Transfer Agent shall not be under any duty or
responsibility with respect to the certificate required by this subsection (v) except to
exhibit the same to any holder of shares of Series B Preferred Stock who requests to inspect
it. The Corporation shall also, upon the written request of any holder of Series B
Preferred Stock, furnish or cause to be furnished to such holder a similar certificate
setting forth (i) such adjustments and readjustments, (ii) the adjusted Conversion Price
then in effect, and (iii) the number of shares of Common Stock and the amount, if any, of
other property which then would be received upon the conversion of Series B Preferred Stock.

10

 

     In the event that at any time, as a result of an adjustment made pursuant to subsection
(i) of this Section 4(E), the holder of any share of Series B Preferred Stock thereafter
surrendered for conversion shall become entitled to receive any shares of the Company other
than shares of Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of any share of Series B Preferred Stock shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to Common Stock contained in this Section.

(E) In case:

     (i) the Company shall take any action which would require an adjustment in the
Conversion Price pursuant to Section 4(E); or

     (ii) the Company shall authorize the granting to the holders of its Common
Stock generally of rights or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights; or

     (iii) there shall be any reorganization or reclassification of the Common Stock
or any merger or consolidation to which the Company is a party or any sale or
transfer of all or substantially all of the property and assets of the Company; or

     (iv) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company;

then in each such case the Company shall cause to be given to the holders of shares of
Series B Preferred Stock and the Transfer Agent as promptly as possible, but in any event at
least fifteen (15) days prior to the applicable date hereinafter specified, a notice stating
(i) the date on which a record is to be taken for the purpose of such action or granting of
rights or warrants, or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such distribution, rights or warrants are to be
determined, or (ii) the date on which such reorganization, reclassification, merger,
consolidation, sale, transfer, dissolution, liquidation or winding-up is expected to become
effective or occur, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, dissolution, liquidation or winding-up. Notwithstanding
anything contained herein to the contrary, each holder shall have the right to convert the
Series B Preferred Stock held by such holder in accordance with Section 4 hereof at any time
prior to the end of the Business Day immediately preceding the date on which such
reorganization, reclassification, merger, consolidation, sale, transfer, dissolution,
liquidation or winding-up shall be effective or occur.

     (F) The Company covenants that it will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury, or both, for the purpose of
effecting conversions of shares of Series B Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all

11

 

outstanding shares of Series B Preferred Stock not theretofore converted and on or
before (and as a condition of) taking any action that would cause an adjustment of the
Conversion Price resulting in an increase in the number of shares of Common Stock
deliverable upon conversion above the number thereof previously reserved and available
therefor, the Company shall take all such action so required. For purposes of this Section
4(G), the number of shares of Common Stock which shall be deliverable upon the conversion of
all outstanding shares of Series B Preferred Stock shall be computed as if at the time of
computation all outstanding shares of Series B Preferred Stock were held by a single holder.

     Before taking any action which would cause an adjustment reducing the Conversion Price below
the then par value (if any) of the shares of Common Stock deliverable upon conversion of the shares
of Series B Preferred Stock, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of Common Stock at such adjusted Conversion Price.

     (G) The Company shall pay any and all documentary stamp, issue or transfer taxes, and
any other similar taxes payable in respect of the issue or delivery of shares of Common
Stock upon conversion of shares of Series B Preferred Stock pursuant hereto; provided,
however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of shares of Common Stock in a
name other than that of the holder of the shares of Series B Preferred Stock to be converted
and no such issue or delivery shall be made unless and until the person requesting such
issue or delivery has paid to the Company the amount of any such tax or has established, to
the satisfaction of the Company, that such tax has been paid.

     (H) Notwithstanding any other provision herein to the contrary, in case of any merger
or consolidation to which the Company is a party (other than a merger or consolidation in
which the Company, is the continuing entity and in which the Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash, or the
securities or other property of another entity), or in the case of any sale or transfer of
all or substantially all of the Company’s property and assets to another entity, there will
be no adjustment of the Conversion Price, and lawful provision shall be made by the entity
formed by such consolidation or the entity whose securities, cash or other property will
immediately after the merger or consolidation be owned, by virtue of the merger or
consolidation, by the holders of Common Stock immediately prior to the merger or
consolidation, or the entity which shall have acquired such assets of the Company, such that
each share of Series B Preferred Stock then outstanding will, without the consent of the
holder thereof become convertible into the kind and amount of securities, cash or other
property receivable upon such merger, consolidation, sale or transfer by a holder of the
number of shares of Common Stock into which such share of Series B Preferred Stock was
convertible immediately prior to such merger, consolidation, sale or transfer assuming such
holder of Common Stock did not exercise his rights of election, if any, as to the kind or
amount of securities, cash or other property receivable upon such merger, consolidation,
sale or transfer. In the case of a cash merger of the Company into another entity or any
other cash transaction of the type mentioned in this Section 4(i), each share of Series B
Preferred Stock will thereafter be convertible at

12

 

the Conversion Price in effect at such time into the same amount of cash per share into
which each share of Series B Preferred Stock would have been convertible had such share been
converted into Common Stock immediately prior to the effective date of such cash merger or
transaction. The provisions of this Section 4(i) shall similarly apply to successive
mergers, consolidations, sales or transfers.

     (I) The Company covenants that all shares of Common Stock which may be delivered upon
conversion of shares of Series B Preferred Stock will upon delivery be duly and validly
issued and fully paid and non-assessable.

          The Company covenants that if any shares of Common Stock to be provided for the purpose of
conversion of the Series B Preferred Stock hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be validly issued upon
such conversion, the Company will in good faith and as expeditiously as possible endeavor to secure
such registration or approval, as the case may be.

          The Company further covenants that so long as the Common Stock shall be listed on the New York
Stock Exchange or any other national securities exchange or the Nasdaq National Market or Small Cap
Market, the Company will, if permitted by the rules of such exchange or market, list and keep
listed so long as the Common Stock shall be so listed on such exchange or market, all Common Stock
issuable upon conversion of the shares of Series B Preferred Stock.

     (J) Notwithstanding anything herein to the contrary, in no event shall a holder of
Series B Preferred Stock have the right or be required to convert his, her or its shares of
Series B Preferred Stock to the extent, and only to the extent, that as a result of such
conversion, the aggregate number of shares of Common Stock beneficially owned by such
holder, its affiliates and any “group” (as defined in accordance with Section 13(d) of the
Exchange Act and the rules promulgated thereunder) of which the holder may be deemed to be a
party would exceed 4.99% of the outstanding shares of the Common Stock following such
conversion. For purposes of this Section 4(J), beneficial ownership shall be calculated in
accordance with Sections 13(d) and Section 16(a) of the Exchange Act. The provisions of this
Section 4(J) may be waived by a holder as to itself (and solely as to itself) (i) prior to
or contemporaneously with any issuance of the Series B Preferred Stock or (ii) upon not less
than sixty-five (65) days prior written notice to the Company, and the provisions of this
Section 4(J) shall continue to apply until such 65th day (or later, if stated in the notice
of waiver). Notwithstanding the forgoing provisions of this Section 4 (J) or any other term
or condition hereof, to the extent that any shares of Series B Preferred Stock are not
converted, on the Mandatory Conversion Date, due to the application of this Section 4 (J),
then such shares shall automatically, without any action by the Company or any holder of
shares of Series B Preferred Stock and whether or not any such holder of shares of Series B
Preferred Stock is required to convert such shares, cease to be entitled to the rights,
powers and preferences under Sections 3, 4(E)(ii), 4(F), (5), 6(B) and 7 and thereafter, any
holder of shares of Series B Preferred Stock shall only be entitled to the conversion
thereof into shares of Common Stock of the Company, at the conversion rate in effect on the
Mandatory Conversion Date, upon the surrender of the certificates representing such shares
to the Company or its transfer agent.

13

 

     5. Liquidation Rights.

     Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company, each
holder of shares of the Series B Preferred Stock will be entitled to payment out of the assets of
the Company available for distribution of an amount equal to Twenty-Five Thousand Dollars
($25,000), as adjusted for splits, reverse splits, stock dividends, share
combinations and the like (the “Liquidation Preference”), per share of Series B Preferred Stock
held by such holder, plus (a) an amount equal to accrued and unpaid dividends, if any, to the date
fixed for liquidation, dissolution or winding-up and (b) an additional amount equal to 8% per annum
of the Liquidation Preference per share for the period commencing on the Series B Preferred Stock
Issue Date for such share and ending on the Business Day immediately preceding the date fixed for
liquidation, dissolution or winding-up, in each case before any distribution is made on any Junior
Securities, including, without limitation, the Common Stock. After payment in full of the
Liquidation Preference and all other amounts to which holders of Series B Preferred Stock are
entitled pursuant to this Section 5, such holders will not be entitled to any further participation
in any distribution of assets of the Company. If, upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the amounts payable with respect to the Series B
Preferred Stock and all other Parity Securities are not paid in full, the holders of the Series B
Preferred Stock and the Parity Securities will share equally and ratably in any distribution of
assets of the Company in proportion to the full liquidation preference and accumulated and unpaid
dividends, if any, to which each is entitled (including, in the case of the Series B Preferred
Stock, all amounts payable pursuant to the first sentence of this Section 5). For the purposes of
this Section 5, the following shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding-up of the Company:

     (i) the voluntary sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or consolidated assets of the Company and its subsidiaries in a single
transaction or series of related transactions;

     (ii) the merger or consolidation of one or more other entities into or with the
Company, the merger or consolidation of the Company into or with one or more other
entities, other business combination involving the Company (including transactions
involving subsidiaries of the Company), a sale of stock of the Company, or series or
combination of such transactions, if the stockholders holding the outstanding shares
of voting stock of the Company immediately prior to such transaction or transactions
do not, immediately after the consummation of such transaction or transactions hold
a majority of the outstanding shares of voting stock of the surviving entity.

          The holder of any shares of Series B Preferred Stock shall not be entitled to receive any
payment owed for such shares under this Section 5 until such holder shall cause to be delivered to
the Company the certificate(s) representing such shares of Series B Preferred Stock together with
all duly executed stock powers as may be necessary to transfer such shares of Series B Preferred
Stock to the Company. No interest shall accrue on any payment upon liquidation after the date
thereof. Notwithstanding anything contained herein to the contrary, each holder shall have the
right to convert the Series B Preferred Stock held by such holder in

14

 

accordance with Section 4 hereof at any time prior to the end of the Business Day immediately
preceding the date fixed for the liquidation, dissolution or winding-up of the Company.

     6. Voting Rights.

     (A) Except as otherwise provided herein or required by law, the Series B Preferred
Stock shall be voted equally with the shares of the Common Stock and not as a separate
class, at any annual or special meeting of the shareholders of the Company, and may act by
written consent in the same manner as the Common Stock, in each case upon the following
basis: each holder of shares of Series B Preferred Stock shall be entitled to such number of
votes as may be voted on the whole number of shares of Common Stock into which such holder’s
aggregate shares of Series B Preferred Stock are convertible immediately after the close of
business on the record date fixed for such meeting or the effective date of such written
consent. The holders of the shares of Series B Preferred Stock shall be entitled to 10
days’ prior notice (and if practicable and economically feasible, 20 days prior notice) of
all stockholders’ meetings, and all proposed actions by written consent of the stockholders
of the Corporation.

     (B) In addition to any other vote or consent required herein or by law, so long as
fifty-one percent (51%) of the number of shares of Series B Preferred Stock issued pursuant
to the Purchase Agreements remain outstanding, as adjusted for splits, reverse splits, stock
dividends, share combinations and the like, the vote or written consent of the holders of at
least sixty-six and two thirds (662/3) percent of the outstanding
shares of Series B Preferred Stock, voting together as a single class, shall be necessary
for effecting any of the following actions:

     (i) authorizing, creating, or issuing (by reclassification, merger,
consolidation, reorganization or otherwise) any Parity Securities or Senior Equity
Securities;

     (ii) declaring or paying any dividend or distribution on any of the Common
Stock or any other Junior Securities;

     (iii) repurchasing, redeeming or otherwise acquiring, or authorizing,
designating or agreeing to any redemption terms relating to, any shares of capital
stock of the Company other than shares of Series B Preferred Stock;

     (iv) amending, altering, or repealing (including by merger, consolidation,
reorganization or otherwise) the Company’s Bylaws or Articles of Incorporation
(whether by merger, consolidation, recapitalization or otherwise) as to adversely
affect the preferences, rights or privileges of, or the restrictions provided for
the benefit of, the Series B Preferred Stock;

     (v) altering or changing (including by merger, consolidation, reorganization or
otherwise) the rights, preferences or privileges (whether by merger, consolidation,
recapitalization or otherwise) of, or the restrictions provided for the benefit of,
the Series B Preferred Stock;

15

 

     (vi) unless at a price greater than the Conversion Price, issuing, reserving or
authorizing shares of Common Stock or any right or option to purchase Common Stock
or other security convertible into, or exercisable or exchangeable for, Common Stock
on an aggregate basis in excess of ten percent (10%) of the Company’s outstanding shares of Common Stock on the Issue Date (other than the issuance of Excluded
Shares); or

increasing or decreasing the authorized number of shares of the Series B Preferred Stock. Each of
the foregoing covenants and approval rights is separate and independent. Notwithstanding the
forgoing provisions of this Section 6(B) or any other term or condition hereof, any action by the
Company to amend, alter, or repeal a provision of the Company’s Bylaws or Articles of Incorporation
in furtherance of effectuating an increase in the number of shares of the Company’s authorized
Common Stock, shall require only such consents or votes as determined by applicable law and shall
not necessitate the vote or written consent of the holders of the outstanding shares of Series B
Preferred Stock voting together as a class.

     7. Redemption. The holders of shares of Series B Preferred Stock shall be entitled to
receive, for each share of Series B Preferred Stock owned by them, payment upon redemption
equal to 100% of the face amount thereof plus all accrued but unpaid dividends thereon. The
holders of Series B Preferred Stock, when redeemed (whether pursuant to (A) or (B) below), shall
surrender the certificate or certificates representing such shares at any of the offices or
agencies maintained for such purpose by the Company. For each certificate representing one or more
shares of Series B Preferred Stock surrendered upon redemption, the Company shall pay, within three
(3) Business Days following the surrender of the original Series B Preferred Stock certificates, to
the same named Person as the name in which such shares are registered, the redemption price (in the
manner specified in (A) or (B) below, as the case may be) for each share of Series B Preferred
Stock so surrendered in accordance with the provisions of this Section 7.

          (A) Optional Redemption

          Beginning on the day that is the third anniversary of the date of issuance of the Series B
Preferred Stock, all shares of the Series B Preferred Stock that remain outstanding may be
redeemed, at the option of the Issuer, on 20 days prior written notice to the holder (such notice
being the “Redemption Notice”). Holders of all shares of Series B Preferred Stock which remain
outstanding after the Company shall have issued a Redemption Notice, shall be entitled to receive
payment in cash equal to 100% of the face amount thereof plus accrued and unpaid dividends through
the date that is twenty days following the date the Redemption Notice was issued, subject to the
holders’ presentation to the Company of the original Series B Preferred Stock certificate. No
dividends shall accrue or be payable on any shares of Series B Preferred Stock from and after the
twentieth day following the date of any such Redemption Notice.

          On the 20th day following the date the Company issues a Redemption Notice, no shares of Series
B Preferred Stock will remain outstanding and all shares will automatically be cancelled and
retired and will cease to exist and former holders of Series B Preferred Stock will cease to have
any rights as a stockholder resulting therefrom, except the right to receive a payment in cash
equal to 100% of the face amount of the Series B Preferred Stock on the date the Redemption Notice
was issued plus accrued but unpaid dividends calculated through the day

16

 

that is twenty days following the date of the Redemption Notice or, if sooner, the date that
the original Series B Preferred Stock certificates are delivered to the Company for redemption.
Notwithstanding anything contained herein to the contrary, each holder shall have the right to
convert the Series B Preferred Stock held by such holder in accordance with Section 4 hereof at any
time before the date which is 20 days following the date the Company issues a Redemption Notice.

          (B) Mandatory Redemption

          On the fourth anniversary of the Issue Date (the “Mandatory Redemption Date”), all shares of
the Series B Preferred Stock that remain outstanding shall automatically be cancelled and retired
and will cease to exist and former holders of Series B Preferred Stock will cease to have any
rights as a stockholder resulting therefrom, except the right, upon presentation and surrender to
the Company of the original share certificate, to receive the redemption price which equals 100% of
the face amount thereof plus accrued but unpaid dividends thereon through the Mandatory Redemption
Date. No shares of Series B Preferred Stock will remain outstanding on or after the Mandatory
Redemption Date. The Company shall have the option, in its sole discretion, to pay the redemption
price in connection with a mandatory redemption contemplated by this Section 7(B) on the Mandatory
Redemption Date in either (i) cash or (ii) shares of Company’s Common Stock valued at the lesser of
90% of the volume-weighted average price of the Company’s Common Stock for the 20 trading days
prior to the Mandatory Redemption Date or the Conversion Price then in effect. The Redemption
Notice delivered in connection with a mandatory redemption pursuant to this Section 7(B) shall
specify whether the redemption price will be paid by the Company in cash or shares as contemplated
by this Section 7(B).

     8. Headings of Subdivisions.

     The headings of the various subdivisions hereof are for convenience of reference only and
shall not affect the interpretation of any of the provisions hereof.

     9. Severability of Provisions.

     If any of the voting powers, preferences and relative, participating, optional and other
special rights of the Series B Preferred Stock and qualifications, limitations and restrictions
thereof set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule
of law or public policy, all other voting powers, preferences and relative, participating, optional
and other special rights of Series B Preferred Stock and qualifications, limitations and
restrictions thereof set forth herein which can be given effect without the invalid, unlawful or
unenforceable voting powers, preferences and relative, participating, optional and other special
rights of Series B Preferred Stock and qualifications, limitations and restrictions thereof shall,
nevertheless, remain in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series B Preferred Stock and qualifications,
limitations and restrictions thereof herein set forth shall be deemed dependent upon any other such
voting powers, preferences and relative, participating, optional or other special rights of Series
B Preferred Stock and qualifications, limitations and restrictions thereof unless so expressed
herein.

17

 

     10. Reissuance of Series B Preferred Stock.

     Shares of Series B Preferred Stock that have been issued and reacquired in any manner,
including shares purchased or exchanged or converted, shall (upon compliance with any applicable
provisions of the laws of Nevada) have the status of authorized but unissued shares of preferred
stock of the Company undesignated as to series and may be designated or redesignated and issued or
reissued, as the case may be, as part of any series of preferred stock of the Company, provided
that any issuance of such shares must be in compliance with the terms hereof and provided further
that such shares may not be reissued as Series B Preferred Stock.

     11. Mutilated or Missing Series B Preferred Stock Certificates; Office.

     If any of the Series B Preferred Stock certificates shall be mutilated, lost, stolen or
destroyed, the Company shall issue, in exchange and in substitution for and upon cancellation of
the mutilated Series B Preferred Stock certificate, or in lieu of and substitution for the Series B
Preferred Stock certificate lost, stolen or destroyed, a new Series B Preferred Stock certificate
of like tenor and representing an equivalent amount of shares of Series B Preferred Stock, but only
upon receipt of evidence of such loss, theft or destruction of such Series B Preferred Stock
certificate and indemnity, if requested, satisfactory to the Company and the Transfer Agent. The
Company will, so long as any shares of Series B Preferred Stock are outstanding, maintain an office
or agency where such shares may be presented for registration and where such shares may be
presented for conversion. Any holder of Series B Preferred Stock may inspect the register of
holders and their addresses at such office or agency.

     12. Reports.

     The Company shall mail to all holders of Series B Preferred Stock those reports, proxy
statements and other materials that it mails to all of its holders of Common Stock.

     13. No Impairment.

     The Company will not, by amendment of its Articles of Incorporation, as amended, or through
any reorganization, recapitalization, transfer of assets, consolidation, merger, 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 to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of this Certificate of
Designation and in the taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the holders of the Series B Preferred Stock against impairment.

     14. Notices of Record Date.

     In addition to the requirements of Section 4(F), if the Company shall propose at any time:

     (A) to declare any dividend or distribution upon its Common Stock or other equity
securities, whether in cash, property, stock, or other securities, whether or not a regular
cash dividend and whether or not out of earnings or earned surplus;

18

 

     (B) to offer for subscription pro rata to the holders of any class or series of its
stock any additional shares of stock of any class or series or other rights;

     (C) to effect any reclassification or recapitalization of its Common Stock or other
equity securities outstanding involving a change in the Common Stock or other equity
securities;

     (D) to merge or consolidate with or into any other Person, or sell, lease, or convey
all or substantially all its property or business, or to liquidate, dissolve, or wind up (as
defined herein),

     then, in connection with each such event, the Company shall send to the holders of the Series
B Preferred Stock in addition to any notice required by applicable law:

     (i) at least ten (10) days’ prior written notice of the date on which a record
shall be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of Common Stock shall be entitled thereto)
or for determining rights to vote in respect of the matters referred to in (A) and
(B) above; and

     (ii) in the case of the matters referred to in (C) and (D) above, at least
fifteen (15) days’ prior written notice of the date when the same shall take place
(and specifying the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon the
occurrence of such event or the record date for the determination of such holders if
such record date is earlier).

     Each such written notice shall be delivered personally or given by first class mail, postage
prepaid, addressed to the holders of the Series B Preferred Stock at the address for each such
holder as shown on the books of the Company.

     15. Certain Definitions.

     As used in this Certificate of Designation, the following terms shall have the following
meanings (with terms defined in the singular having comparable meanings when used in the plural and
vice versa), unless the context otherwise requires:

     “Business Day” means any day except a Saturday, a Sunday, or any day on which banking
institutions in New York, New York are required or authorized by law or other governmental action
to be closed.

     “Closing Price” for any day shall be the last reported sale price regular way of the Common
Stock on the New York Stock Exchange or, if the Common Stock is not listed on The New York Stock
Exchange, the average of the closing sale prices on such day of the Common Stock on all average of
the closing sale prices on such day of the Common Stock on all domestic exchanges on which the
shares of Common Stock may at the time be listed, or if there have been no sales on any such
exchange on such day, the average of the highest bid and lowest asked prices of the Common Stock on
all such exchanges or, if on such day such shares of Common

19

 

Stock shall not be so listed, 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 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.

     “Commission” means the Securities and Exchange Commission.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Excluded Shares” means any of: (i) shares of Common Stock issued or issuable pursuant to the
Company’s Series B Preferred Stock, Series B Warrants, or Series B-Agent Warrants, specifically
including all shares of Common Stock which may be issued upon conversion or exercise thereof or
which may be issued as dividends thereon, (ii) shares of Common Stock issued or issuable pursuant
to the Company’s Series A Convertible Preferred Stock, specifically including all conversion shares
and all shares that may be issued as dividends thereon, (iii) shares of Common Stock issuable upon
the exercise of any options or warrants outstanding on the Issue Date, (iv) shares of Common Stock
issuable pursuant to or upon the conversion of any note, debenture, debt instrument and all other
written agreements to which the Company is a party on the Issue Date (v) shares of Common Stock
(including grants, options and warrants) issuable pursuant to or in accordance with any plan for
which the Company has filed a registration statement that has been declared effective including,
without limitation, the 1994 Stock Plan, the 2005 Stock Plan and the Consultant Compensation Plan,
or any other stock plan, option plan or written agreements to which the Company is a party on the
Issue Date, including all modifications and replacements thereof, (vi) shares of Common Stock
issued or issuable pursuant to the Company’s Series A-1 Warrants, (vii) shares of Common Stock
issued or issuable pursuant to the Company’s Series A-2 Warrants and (viii) shares of Common Stock
issued or issuable pursuant to the Company’s Series A-Agent Warrants. Any Excluded Shares issued
and outstanding on the Series B Preferred Stock Issue Date that are thereafter amended or modified
pursuant to an agreement between the Company and the holder thereof such that the effective price
per share of the Common Stock to be issued on the exercise, conversion or exchange thereof is less
than the Conversion Price, shall as the result of such amendment or modification thereupon not
constitute Excluded Shares. The immediately preceding sentence applies only to such issued and
outstanding shares that are affected by such amendment or modification and shall be effective
concomitantly with any such amendment or modification taking effect. For the purposes of this
definition the effective price per share shall be calculated by dividing the number of shares of
Common Stock to be issued upon any such exchange or conversion by the sum of (a) the amount of all
consideration given or paid for the securities to be exchanged or converted in to Common Stock and
(b) the consideration to be paid upon such issue, exchange or conversion for Common Stock.

     “Issue Date” means the date on which shares of Series B Preferred Stock are first issued to
any Person.

20

 

     “Person” means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.

     “Purchase Agreement” means each separate Purchase Agreement, dated as of the date thereof,
entered into by the Company in separate transactions with the party or parties named therein.

     “Registration Rights Agreements” means the separate Registration Rights Agreements dated as of
the date thereof, entered into by the Company in separate transactions with the party or parties
named therein.

     “Trading Day” means a day on which the securities exchange, association, or quotation system
on which shares of Common Stock are listed for trading shall be open for business or, if the shares
of Common Stock shall not be listed on such exchange, association, or quotation system for such
day, a day with respect to which trades in the United States domestic over the counter market shall
be reported.

     “Transfer Agent” shall be Wells Fargo Share Owner Services unless and until a successor is
selected by the Company.

     IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed on its behalf
by its undersigned President and attested to by its Secretary this ___th day of August
2005.

	 	 	 	 	 
	 	 	VISEON, INC.,
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	John Harris, President

	 	 	 	 	 
	ATTEST:
	 	 	 	 
	[CORPORATE SEAL]
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

21exv4w6

 

EXHIBIT
4.6

Series B Warrant NO. B-Agent 

 

Viseon, inc.

(Formerly RSI Systems, Inc.)

 

Common Stock Purchase Warrant

Dated as of August 22, 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 SUCH SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THIS WARRANT AND IN THE REGISTRATION RIGHTS AGREEMENT, DATED THE DATE
HEREOF, BY AND BETWEEN VISEON, INC f/k/a RSI SYSTEMS, INC., AND THE HOLDERS
SPECIFIED THEREIN.

 

 

Viseon, Inc.

(Formerly RSI Systems, Inc.)

Common Stock Purchase Warrant

Void on August 21, 2010

	 	 	 
	Series B Warrant

	 	Las Vegas, Nevada
	 
	 	 
	No. B-Agent

	 	August 22, 2005

     VISEON, INC. (the “Company”), a Nevada corporation, for value received, hereby certifies that
ThinkEquity Partners, L.L.C or registered assigns (the “Holder”), is entitled to
purchase from the Company Two Hundred Eighty-Two Thousand (282,000) shares (the “Warrant
Shares”) 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 fifteen cents ($1.15) per share of Common Stock, (the “Warrant Price”), at any time
or from time to time prior to 5:00 p.m. Central Standard time, on August 21, 2010 (the “Expiration
Date”), all subject to the terms, conditions and adjustments set forth below in this Warrant.

     This Warrant is the Warrant (the term “Warrant”, shall include any such warrants issued in
substitution therefor) originally issued in connection with the Purchase Agreement, dated as of the
date hereof, by and among the Company and the Holder (as amended or otherwise modified from time to
time, the “Purchase Agreement”). The Warrant originally so issued evidences the right to purchase
a number of shares of Common Stock equal to the Warrant Shares, subject to adjustment as provided
herein. Certain capitalized terms used in this Warrant are defined in Section 10; 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 in the amount obtained by multiplying (a) the number of shares of Common Stock
(adjusted as provided in Section 2 ) designated in such Form of Subscription by
(b) the Warrant Price then in effect, and such Holder shall thereupon be entitled

	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 1

 

 

to receive
such number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities).

     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 together with all applicable payments 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
Closing 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 (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.

	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 2

 

 

     1.5 Payment by Application of Shares Otherwise Issuable. Upon the occurrence of
certain events as set forth in the Registration Rights Agreement of even date herewith, the Holder
may be entitled, from time to time and at various times to a cashless exercise of this Warrant in
the manner and on the terms and conditions as set forth in Section 2(h) the Registration Rights
Agreement.

2. Adjustment of Common Stock Issuable Upon Exercise.

     The Warrant Price and the Warrant Shares purchasable pursuant to each Warrant shall be subject
to adjustment from time to time as hereinafter set forth in this Section 2:

     2.1 Dividends and Subdivisions. In case, prior to the expiration of this Warrant by
exercise or by its terms, the Company shall issue any shares of its Common Stock as a stock
dividend or subdivide the number of outstanding shares of its Common Stock into a greater number of
shares, then in either of such cases, the then applicable Warrant Price per Warrant Share
purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately
reduced and the number of Warrant Shares at that time purchasable pursuant to this Warrant shall be
proportionately increased; and conversely, in the event the Company shall reduce the number of
outstanding shares of Common Stock by combining such shares into a smaller number of shares, then,
in such case, the then applicable Warrant Price per Warrant Share purchasable pursuant to this
Warrant in effect at the time of such action shall be proportionately increased and the number of
Warrant Shares at that time purchasable pursuant to this Warrant shall be proportionately
decreased. If the Company shall, at any time during the life of this Warrant, declare a dividend
payable in cash on its Common Stock and shall at substantially the same time offer to its
stockholders a right to purchase new Common Stock from the proceeds of such dividend or for an
amount substantially equal to the dividend, all Common Stock so issued shall, for the purpose of
this Warrant, be deemed to have been issued as a stock dividend. Any dividend paid or distributed
upon the Common Stock in stock of any other class of securities convertible into shares of Common
Stock shall be treated as a dividend paid in Common Stock to the extent that shares of Common Stock
are issuable upon conversion thereof.

     2.2 Recapitalizations, Mergers, Etc. In case, prior to the expiration of this Warrant
by exercise or by its terms, the Company shall be recapitalized by reclassifying its outstanding
Common Stock, (other than a change in par value to no par value), or the corporation or a successor
corporation shall consolidate or merge with or convey all or substantially all of its or of any
successor corporation’s property and assets to any other corporation or corporations (any such
other corporations being included within the meaning of the term “successor corporation”
hereinbefore used in the event of any consolidation or merger of any such other corporation with,
or the sale of all or substantially all of the property of any such other corporation to, another
corporation or corporations), then, as a condition of such recapitalization, consolidation, merger
or conveyance, lawful and adequate provision shall be made whereby the holder of this Warrant shall
thereafter have the right to purchase, upon the basis and on the terms and conditions specified in
this Warrant, in lieu of the Warrant Shares theretofore purchasable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable with respect to, or
in exchange for, the number of Warrant Shares theretofore purchasable upon the exercise of this
Warrant, had such recapitalization, consolidation, merger, or conveyance not taken place; and in
any such event, the rights of the Warrant Holder to any adjustment in the number of

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 3

 

 

Warrant Shares
purchasable upon the exercise of this Warrant, as herein provided, shall continue and be preserved
in respect of any stock which the Warrant Holder becomes entitled to purchase.

     2.3 Sale of Property, Liquidation, Etc. In case the Company at any time while this
Warrant shall remain unexpired and unexercised shall sell all or substantially all of its property
or dissolve, liquidate, or wind up its affairs, lawful provision shall be made as part of the terms
of any such sale, dissolution, liquidation or winding up, so that the holder of this Warrant may
thereafter receive upon exercise hereof in lieu of each Warrant Share that it would have been
entitled to receive, the same kind and amount of any securities or assets as may be issuable,
distributable or payable upon any such sale, dissolution, liquidation or winding up with respect to
each share of Common Stock of the Company, provided, however, that in any case of any such
voluntary sale or of dissolution, liquidation or winding up, the right to exercise this Warrant
shall terminate on a date fixed by the Company; such date so fixed to be not earlier than 5:00
p.m., Central Standard Time, on the forty-fifth day following the date on which a notice of such
termination of the right to exercise this Warrant has been given, by any method set forth in
Section 13, to the registered holder of this Warrant at its address as it appears on the books of
the Company.

     2.4 Issuance of Additional Shares. If the Company, at any time while this Warrant
is outstanding:

                    (i) issues or sells, or is deemed to have issued or sold, any Common Stock, other than
Excluded Shares;

                    (ii) in any manner grants, issues or sells any rights, options, warrants, options to subscribe
for or to purchase Common Stock or any stock or other securities convertible into or exchangeable
for Common Stock that, upon conversion or exchange, would not constitute Excluded Shares (such
rights, options or warrants being herein called “Options” and such convertible or exchangeable
stock or securities being herein called “Convertible Securities”); or

                    (iii) in any manner issues or sells any Convertible Securities that, upon conversion, would
not constitute Excluded Shares;

for (a) with respect to Section 2.4(i), above, a price per share, or (b) with respect to Sections
2.4(ii) or 2.4(iii), above, a price per share (including the consideration per share paid on
issuance of the Option or Convertible Securities) for which Common Stock issuable upon the exercise
of such Options or upon conversion or exchange of such Convertible Securities is less than the
Warrant Price then in effect immediately prior to such issuance, sale or grant, then, immediately
after such issuance, sale or grant, the Warrant Price then in effect shall be reduced concurrently
with such issue to the amount of the consideration per share received by the Company for such issue
or deemed issue of the additional shares of Common Stock; provided that if such issuance or
deemed issuance was without consideration, then the Corporation shall be deemed to have received an
aggregate of $.01 of consideration for all such additional shares of Common Stock issued or deemed
to be issued. No modification of the issuance terms shall be made upon the actual issuance of such
Common Stock upon exercise, conversion or exchange of such Options

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 4

 

 

or Convertible Securities. If
there is a change at any time in (i) the exercise price provided for in any Options, (ii) the
additional consideration, if any, payable upon the issuance, conversion or exchange of any
Convertible Securities or (iii) the rate at which any Convertible Securities are convertible into
or exchangeable for Common Stock, then immediately after such change the Warrant Price then in
effect shall be adjusted to the Warrant Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such changed exercise price,
additional consideration or changed conversion rate, as the case may be, at the time initially
granted, issued or sold; provided that no adjustment shall be made if such adjustment would result
in an increase of the Warrant Price then in effect..

2.5 Computation of Consideration. For the purposes of this Section 2, the consideration
for the issue or sale of any securities of the Company 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, and

     (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,

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

     2.7 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 Shares
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 Shares by reason
of the taking of such record shall be reversed, and any subsequent adjustments, based thereon,
shall be recomputed

     2.8 Number of Warrant Shares. Simultaneously with any adjustment to the Warrant Price
pursuant to this Section 2, the number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so that after such adjustment the
aggregate Warrant Price payable hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Warrant Price in effect immediately prior to such adjustment.

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 5

 

 

3. Other Dilutive Events. In case an event shall occur as to which the provisions of
Section 2 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 Section, then, in each such case, the Company shall appoint, at the Company’s
expense, 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,
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.

4. No 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 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 number of
Warrant Shares 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.

5. 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 number

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 6

 

 

of Warrant Shares in effect
under this Warrant 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 number of Warrant Shares under
this Warrant 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.

6. Financial and Business Information

     6.1 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.

     6.2 Listing of Shares. The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of this Warrant upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance upon exercise of this Warrant) and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all shares of Common Stock from time to
time issuable upon the exercise of this Warrant; and the Company shall so list on each national
securities exchange or automated quotation system, as the case may be, and shall maintain such
listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant if and so long as any shares of the same class shall be listed on
such national securities exchange or automated quotation system.

     6.3 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

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 7

 

 

     (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 45 days prior to the date therein specified.

7. Restrictions on Transfer.

     7.1 Restrictive Legends. Except as otherwise permitted by this Section 7, 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 THE REGISTRATION
RIGHTS AGREEMENT BY AND BETWEEN VISEON, INC. AND THE HOLDERS SPECIFIED THEREIN.”

Except as otherwise permitted by this Section 7, until such time as the Commission declares
effective the registration statement required by the terms of Section 2 of the Registration Rights
Agreement between the Company and the Holder, 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.”

     7.2 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.

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 8

 

 

     7.3 Termination of Restrictions. The restrictions imposed by this Section 7 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 7.1.

8. Reservation of Stock, etc. The Company shall at all times reserve and keep available,
solely for issuance and delivery upon exercise of the Warrants, one hundred and fifty percent
(150%) of 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 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.

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 9

 

 

9. Registration and Transfer of Warrants, etc.

     9.1 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 7, a Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first having been issued.

     9.2 Transfer of Warrants. Subject to compliance with Section 7, 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.

     9.3 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.

     9.4 Adjustments to Warrant Quantity. Notwithstanding any adjustment in the number or
kind of shares of Common Stock or other securities 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.

     9.5 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 Closing Price of a share of Common
Stock on the date of Warrant exercise.

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

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 10

 

 

          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 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 1.5.

          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.

          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.

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 11

 

 

          Excluded Shares: (i) shares of Common Stock issued or issuable pursuant to the
Company’s Series B Convertible Preferred Stock, Series B Warrants, or Series B-Agent Warrants,
specifically including all shares of Common Stock which may be issued upon conversion or exercise
thereof or which may be issued as dividends thereon, (ii) shares of Common Stock issued or issuable
pursuant to the Company’s Series A Convertible Preferred Stock, specifically including all
conversion shares and all shares that may be issued as dividends thereon, (iii) shares of Common
Stock issuable upon the exercise of any options or warrants outstanding on the date of this
Warrant, (iv) shares of Common Stock issuable pursuant to or upon the conversion of any note,
debenture, debt instrument and all other written agreements to which the Company is a party on the
date of this Warrant (v) shares of Common Stock (including grants, options and warrants) issuable
pursuant to or in accordance with any plan for which the Company has filed a registration statement
that has been declared effective including, without limitation, the 1994 Stock Plan, the 2005 Stock
Plan and the Consultant Compensation Plan, or any other stock plan, option plan or written
agreements to which the Company is a party on the Issue Date, including all modifications and
replacements thereof, (vi) shares of Common Stock issued or issuable pursuant to the Company’s
Series A-1 Warrants, (vii) shares of Common Stock issued or issuable pursuant to the Company’s
Series A-2 Warrants and (viii) shares of Common Stock issued or issuable pursuant to the Company’s
Series A-Agent Warrants. Any Excluded Shares issued and outstanding on the Series B Preferred
Stock Issue Date that are thereafter amended or modified pursuant to an agreement between the
Company and the holder thereof such that the effective price per share of the Common Stock to be
issued on the exercise, conversion or exchange thereof is less than the Conversion Price, shall as
the result of such amendment or modification thereupon not constitute Excluded Shares. The
immediately preceding sentence applies only to such issued and outstanding shares that are affected
by such amendment or modification and shall be effective concomitantly with any such amendment or
modification taking effect. For the purposes of this definition the effective price per share
shall be calculated by dividing the number of shares of Common Stock to be issued upon any such
exchange or conversion by the sum of (a) the amount of all consideration given or paid for the
securities to be exchanged or converted in to Common Stock and (b) the consideration to be paid
upon such issue, exchange or conversion for Common Stock

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

          Holder: As defined in the introduction to this Warrant.

          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 pursuant to
Section 2 or otherwise in accordance with the provisions of this Warrant.

          Public Company: A company required to file periodic reports under the Exchange Act.

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 12

 

 

          Purchase Agreement: The Purchase Agreement dated as of the date of this Warrant by and
between the Company and the initial holder of this Warrant.

          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: The Registration Rights Agreement dated the date
hereof, by and between the Company and initial Holder of this Warrant.

          Restricted Securities: (a) any Warrants bearing the applicable legend set forth in
Section 7.1, (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.

          Trading Day: A day on which the securities exchange, association, or quotation system
on which shares of Common Stock are listed for trading shall be open for business or, if the shares
of Common Stock shall not be listed on such exchange, association, or quotation system for such
day, a day with respect to which trades in the United States domestic over the counter market shall
be reported.

          Warrant: As defined in the introduction to this Warrant.

          Warrant Price: As defined in the first paragraph of this Warrant.

          Warrant Shares: As defined in the first paragraph of this Warrant.

11. 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

	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 13

 

 

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.

12. 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.

13. 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 the initial Holder:

at the address set forth on such

Holder’s signature page of the

Securities Purchase Agreement

If to Viseon, Inc.:

Viseon, Inc.

Attn:       President

8445 Freeport Parkway, Suite 245

Irving, TX 75063

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 13. The Company shall give notice to any subsequent
Holder at such address as it appears in the Warrant Register.

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.

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 14

 

 

14. 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.

15. 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.

16. Law Governing Agreement. THIS WARRANT SHALL BE INTERPRETED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND SUBJECT TO, THE LAWS OF THE STATE OF NEVADA, EXCEPT TO THE EXTENT
THAT FEDERAL LAW MAY APPLY AND ITS CONSTRUCTION AND PERFORMANCE SHALL BE GOVERNED SUCH LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEVADA.

17. 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.

18. Redemption. Commencing on the first Trading Day after the Commission declares the
registration statement filed by the Company pursuant to Section 2 of the Registration Rights
Agreement effective, the Company has the right to redeem this Warrant for the redemption price of
ten cents ($0.10) per Warrant Share (the “Redemption Price”); provided that the average Closing
Price of the Company’s Common Stock for any twenty consecutive Trading Days is $3.00 or more, the
Registration Statement remains in effect and the average trading volume of the shares of Common
Stock has been 100,000 shares or more during the same 20 consecutive Trading Days at any time prior
to the exercise or expiration of this Warrant and provided further that following the occurrence of
any such event, the Company gives the Holder ten (10) days prior written notice of the Company’s
intention to redeem this Warrant (the “Redemption

	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 15

 

 

Notice”), identifying a date, no earlier than ten
days thereafter, on which the Company will exercise such rights.

The $3.00 amount set forth above (the “Trigger Amount”) shall be subject to adjustment in the
event that the Company shall (i) pay a dividend or make a distribution on its Common Stock, each in
shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number
of shares, or (iii) combine its outstanding shares of Common Stock into a smaller number of shares,
in each case, by multiplying the Trigger Amount by a fraction, the numerator of which is the number
of outstanding shares of Common Stock immediately prior to giving effect to such dividend,
distribution, subdivision, or combination and the denominator of which is the number of shares of
Common Stock outstanding immediately after giving effect to such dividend, distribution,
subdivision, or combination.

The Holder may exercise this Warrant at any time before the date fixed for the redemption of this
Warrant in the Redemption Notice, however, at the final bell signifying the close of the New York
Stock Exchange on the day preceding the date specified in the Redemption Notice, any Warrant or
portion thereof that remains unexercised shall thereupon be no longer exercisable, exchangeable or
convertible in any manner for or into any Warrant Shares or other equity securities of the Company
and the only consideration payable by the Company thereon and in exchange therefore or other
obligation of the Company with respect thereto shall be the payment of the Redemption Price upon
surrender of the original Warrant at the principal place of business of the Company or at any other
address or to the attention of any agent as the Company may specify in the Redemption Notice.

19. Restriction on Exercise by the Holder. Notwithstanding anything herein to the
contrary, in no event shall the Holder have the right or be required to exercise this Warrant to
the extent, and only to the extent, that as a result of such exercise, the aggregate number of
shares of Common Stock beneficially owned by such Holder, its Affiliates and any “group” (as
defined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder)
of which the Holder may be deemed to be a party would exceed 4.99% of the outstanding shares of the
Common Stock following such exercise. For purposes of this Section 19, beneficial ownership shall
be calculated in accordance with Sections 13(d) and Section 16(a) of the Exchange Act. The
provisions of this Section 19 may be waived by a Holder as to itself (and solely as to itself) upon
not less than sixty-five (65) days, prior written notice to the Company, and the provisions of this
Section 19 shall continue to apply until such 65th day (or later, if stated in the notice of
waiver). Nothing contained in this paragraph 19 or any other provision hereof
shall restrict, affect or limit in any manner the right of the Company to redeem this Warrant in
accordance with the provisions of paragraph 18 hereinabove.

20. Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION,
SUIT OR OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY RELATING TO THIS WARRANT
(INCLUDING ANY AMENDMENTS OR SUBSTITUTIONS HEREOF), OR ANY OF THE TRANSACTIONS CONTEMPLATED BY OR
RELATED TO THIS WARRANT OR ANY CONDUCT,

	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 16

 

 

ACT OR OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR ANY
OF THEM) WITH RESPECT TO THIS WARRANT, INCLUDING ANY AMENDMENTS OR SUBSTITUTIONS, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER
PROCEEDING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION, SUIT OR OTHER
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND THAT EITHER PARTY MAY FILE A COPY
OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE STIPULATION AND CONSENT OF THE OTHER TO
THE WAIVER OF ANY RIGHT IT OR THEY MIGHT OTHERWISE HAVE TO A TRIAL BY JURY.

Viseon, Inc.

      (Formerly RSI Systems, Inc.)

	 	 	 	 	 
	 	 	 
	By:

	 	John Harris	 	 
	Its:

	 	President and Chief Executive Officer	 	 

 
	 	 	 
	Series B Warrant No.  B-Agent

	 	Page — 17

 

 

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 Series B Warrant No. B-Agent, hereby irrevocably exercises such Warrant
for, and purchases thereunder,                                                             

(                    )1shares 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 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, representing the unexercised portion of the
Warrant, will be issued and delivered 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.

	 	 	 
	Series B Warrant — Exhibit A 

	 	 

 

 

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,
Series-B-Warrant No. , 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)
	 	 

	 	 	 
	Series B Warrant — Exhibit B

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]