-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jo4sI7YmuKFdYUtLwf2aTYuhJEeAnZ0EDQM+kwrWoi1ZMC1RAZyFq8fgDLrtSHaj 2Imm83VTOlkEvVqHMYk6NA== 0001010549-03-000362.txt : 20030709 0001010549-03-000362.hdr.sgml : 20030709 20030709094731 ACCESSION NUMBER: 0001010549-03-000362 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20030627 ITEM INFORMATION: Changes in control of registrant ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030709 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RTIN HOLDINGS INC CENTRAL INDEX KEY: 0000921066 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 752337102 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13559 FILM NUMBER: 03779270 BUSINESS ADDRESS: STREET 1: 3218 PAGE ROAD CITY: LONGVIEW STATE: TX ZIP: 75605 BUSINESS PHONE: 903.758.28 MAIL ADDRESS: STREET 1: P O BOX 5310 CITY: LONGVIEW STATE: TX ZIP: 75608 FORMER COMPANY: FORMER CONFORMED NAME: RESTAURANT TEAMS INTERNATIONAL INC DATE OF NAME CHANGE: 19980911 FORMER COMPANY: FORMER CONFORMED NAME: FRESH N LITE INC DATE OF NAME CHANGE: 19971030 8-K 1 rtin8k062703.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): June 27, 2003 ------------- RTIN HOLDINGS, INC. (Exact name of registrant as specified in its charter) Texas (State of Other Jurisdiction of Incorporation) 001-13559 75-2968064 (Commission File Number) (IRS Employer Identification No.) 911 N.W. Loop 281 Suite 408 75602 Longview, Texas (Zip Code) (Address of Principal Executive Offices) (903) 295-6800 (Registrant's Telephone Number, Including Area Code) 3218 Page Rd. Longview, Texas 75605 (Former Name or Former Address, if Changed since Last Report) Item 1. Changes in Control of Registrant The transactions described in response to Item 2 may have resulted in a change in control of RTIN Holdings, Inc. (the "Company" or "RTIN"). As an aggregate result of such transactions the following persons or entities acquired (or may have the right to acquire upon the exercise of warrants) the number of shares of common stock set forth opposite their names: Laurence I. Solow 2,295,000 shares Barron Partners LP 2,590,780 shares Item 2. Acquisition or Disposition of Assets. On June 30, 2003, RTIN Holdings, Inc. (the "Company" or "RTIN") announced that it acquired all of the outstanding shares of Medex Systems, Inc. and Pegasus Pharmacy, Inc. from its sole shareholder, Laurence I. Solow for aggregate consideration of $1,256,000 in cash and 1,250,000 shares of the common stock of the Company. RTIN also issued 1,045,000 in satisfaction of $2,090,000 debt owed by Seller to various third parties. In addition, RTIN indemnified Mr. Solow from approximately $1,000,000 in additional liabilities of the seller and acknowledged approximately $3,000,000 in additional liabilities owed by MedEx Systems, Inc. and Pegasus Pharmacy, Inc. Medex Systems, Inc. is engaged in the development and licensing of software and hardware for the secure wireless transmission of prescription medication script, access to medical databases and other medical applications. Its assets include exclusive rights to the use of such software for these applications in certain major cities. Pegasus Pharmacies, Inc. is in the business of operating pharmacies to which prescription script is transmitted using the software and hardware developed by Medex and operates pharmacies in New Orleans, Baton Rouge and Covington, Louisiana. All of the assets of both Medex and Pegasus will continue to be used for the same purposes after the acquisition until conversion to the proprietary systems of the Company. The cash portion of the purchase price was provided by the private placement of 100,000 units, each consisting of 8 shares of the Company's common stock, 5 Series A Warrants to purchase shares of the Company's common stock for $1.50 per share, 5 Series B Warrants to purchase shares of the Company's common stock for $1.50 per share and 25 Series C Warrants to purchase shares of the Company's common stock for $1.50 per share. The Series A, B and C Warrants do not become exercisable unless the Company fails to meet certain performance milestones. All of the Units were purchased for $21 per unit by ten separate accredited parties. Item 5. Other Events. On June 30, 2003, RTIN settled all outstanding claims between the Company, Southridge Capital Management LLC, Sovereign Partners Limited Partnership, Dominion Capital Fund Limited, Stephen Hicks, and related parties. In addition, also on June 30, 2003, the Company approved the transfer of certain securities by Sovereign Partners Limited Partnership and Dominion Capital Fund Limited to Barron Partners LP and the conversion of such securities to shares of its common stock in a transaction exempt from registration under Section 3(a)(9) of the Securities Act. Item 7. Exhibits. Financial Statements for Medex Systems, Inc. and Pegasus Pharmacies, Inc. and pro forma financial statements, if required, will be provided by amendment to this Current Report on Form 8-K within 60 days. The following documents are filed as exhibits to this Current Report on Form 8-K: 2.1 Stock Purchase Agreement dated June 27, 2003 between RTIN Holdings, Inc., and Laurence I. Solow relating to the purchase and sale of all of the outstanding stock of Medex Systems, Inc. and Pegasus Pharmacies, Inc. 4.1 Conversion Commitment Agreement dated June 30, 2003, among RTIN Holdings, Inc., Sovereign Partners Limited Partnership, Dominion Capital Fund Limited and Barron Partners LP. 4.2 Subscription Agreement dated June 30, 2003 among RTIN Holdings, Inc. and Barron Partners LP. 4.3 Form of Series A Warrant 4.4 Form of Series B Warrant 4.5 Form of Series C Warrant 99.l Press release by RTIN Holdings, Inc. dated June 30, 2003 announcing the settlement of litigation. 99.2 Press release by RTIN Holdings, Inc. dated June 30, 2003 announcing the completion of a private placement and conversion of outstanding securities. 99.3 Press release of RTIN Holdings, Inc. dated June 30, 2003 announcing the acquisition of Medex Systems, Inc. and Pegasus Pharmacies, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. RTIN HOLDINGS, INC. Date: July 7, 2003 By: /s/ Curtis A. Swanson ---------------------------- ---------------------------- Curtis A. Swanson, President EXHIBIT INDEX 2.1 Stock Purchase Agreement dated June 27, 2003 between RTIN Holdings, Inc., and Laurence I. Solow relating to the purchase and sale of all of the outstanding stock of Medex Systems, Inc. and Pegasus Pharmacies, Inc. 4.1 Conversion Commitment Agreement dated June 30, 2003, among RTIN Holdings, Inc., Sovereign Partners Limited Partnership, Dominion Capital Fund Limited and Barron Partners LP. 4.2 Subscription Agreement dated June 30, 2003 among RTIN Holdings, Inc. and Barron Partners LP. 4.3 Form of Series A Warrant. 4.4 Form of Series B Warrant. 4.5 Form of Series C Warrant. 99.l Press release by RTIN Holdings, Inc. dated June 30, 2003 announcing the settlement of litigation. 99.2 Press release by RTIN Holdings, Inc. dated June 30, 2003 announcing the completion of a private placement and conversion of outstanding securities. 99.3 Press release of RTIN Holdings, Inc. dated June 30, 2003 announcing the acquisition of Medex Systems, Inc. and Pegasus Pharmacies, Inc. EX-2.1 3 rtin8kex21062703.txt STOCK PURCHASE AGREEMENT EXHIBIT 2.1 Stock Sale Agreement ("Agreement") CONTENTS SECTION 1. Sale of Shares, Rights, Title and Interest 2. Representations and Warranties of SELLER 3. Representations and Warranties of the Companies 4. Representations and Warranties of BUYER 5. Indemnities 6. Transactions Completed at Closing 7. Governance of BUYER 8. Remedies upon Breach 9. Governing Law 10. Amendment and Waiver 11. Assignment 12. Notices 13. Section Headings 14. Severability 15. Interpretation 16. Counterparts 17. Publicity 18. Separate Counsel 19. Attorney's Fees 20. Entire Agreement Agreement dated the 27th day of June, 2003, among Laurence I. Solow, a person of full age of majority domiciled in the Parish of Jefferson, State of Louisiana ("SELLER"), MedEx Systems, Inc. ("MedEx"), a Louisiana corporation and Pegasus Pharmacy, Inc. ("Pegasus"), a Louisiana corporation (collectively referred to herein as the "Companies"), and RTIN Holdings, Inc., a Texas corporation ("BUYER"). The transaction shall sometimes be referred to herein as "the Closing". WITNESSETH: WHEREAS, SELLER owns 100% of the outstanding shares of common stock (the "Shares") of the Companies, no par value, which SELLER wishes to sell to BUYER and BUYER wishes to purchase from SELLER, all on the terms hereinafter set forth; WHEREAS, the Companies deem that it is in the best interest of the Companies for the BUYER to purchase the Shares, and the Companies are entering into this Agreement to induce the BUYER to purchase the Shares in accordance with this Agreement; 1 WHEREAS, SELLER and/or Companies own all of the rights, title, and interest (past, present or future) and all intellectual property rights, including those listed in Schedule 2.1(f) assets, buildings and any other property used, owned or held in connection with the business and operations of the Companies; NOW, THEREFORE, the parties hereby agree as follows. 1. Sale of Shares, Rights, Title and Interest. 1.1 SELLER hereby sells, assigns, transfers, and delivers to BUYER, and BUYER hereby purchases from SELLER, the Shares and all of his rights, title, and interest (past, present or future) in and to intellectual property rights, assets, buildings and any other property used, owned or held in connection with the business and operations of the Companies for a total price of U.S. $1,256,000 ("the Cash Purchase Price") payable as follows: (a) U.S. $100,000 which was paid to SELLER on April 4, 2003, 2003; (b) U.S. $156,000 which was paid to SELLER on May 1, 2003; (c) U.S. $100,000 which was paid to SELLER on May 26, 2003; (d) U.S. $900,000 which is due at Closing. 1.2 Intentionally blank. 1.3 As additional consideration for the sale of the Shares, at the Closing, BUYER will issue to SELLER One Million, Two Hundred Fifty Thousand (1,250,000) restricted shares of RTIN Holdings, Inc. common stock ("the RTIN Shares"). The RTIN Shares shall be subject to a Shareholder's Agreement in the form set forth in Exhibit 1.3A. The term "restricted shares" when used in this Agreement shall be defined as: The restrictions imposed pursuant to Rule 144 of the Securities Act of 1933, as amended. Each certificate representing the RTIN Holdings, Inc. restricted stock will bear the following legend substantially as follows: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE MORTGAGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. 2 Any shares of stock herein referred to and designated as "restricted shares" shall mean that any transfer, sale and ownership of such shares are expressly subject to the limitations and restrictions imposed by Rule 144 of the Federal Securities Act of 1933 as the same may be amended from time to time. BUYER shall provide to SELLER a written opinion from BUYER's attorney concerning the restrictions on transferability of the RTIN Shares, a copy of which is attached as Exhibit 1.3(B). 1.4 As additional consideration for the sale of the Shares and in consideration of the release and satisfaction of the Indebtedness as defined in Section 5.5 herein, BUYER will issue to SELLER One Million Seventy Five Thousand (1,075,000) restricted shares of RTIN Holdings, Inc. common stock (the MedEx/Pegasus Creditor Shares"). The MedEx/Pegasus Creditor Shares shall be issued to SELLER in consideration of the release and satisfaction of the Indebtedness defined in Section 5.5 herein, concerning indebtedness owed by SELLER to the following parties ("the Creditors and/or Creditor Shareholder"): Name Number of Shares to be Issued Jack Stolier 206,380 Alan Katz 213,397 Jason Parker 26,425 Laurence Solow ( Whitney bank debt) 329,400 Miriam Kolman 93,965 Dorothy Solow 59,875 Paul Drake 58,000 Misc. Creditors 32,558 From and after delivery of the 1,020,000 shares to SELLER, BUYER shall have no obligation to pay any of the above named creditors or their heirs or assigns and SELLER shall indemnify and hold BUYER harmless therefrom. Seller shall provide BUYER with a written release of any further liability and obligations to the Creditors by Companies and BUYER. In the event SELLER, does not deliver or cause to be delivered the MedEx/Pegasus Creditor Shares in accordance with this Paragraph 1.4, then BUYER shall be under no obligation to indemnify SELLER for the indebtedness due and owing to the Creditor who was supposed to receive satisfaction of the Indebtedness from the MedEx/Pegasus Creditor Shares. BUYER and SELLER agree to execute any and all documents and to perform such acts as may be deemed reasonably necessary to accomplish the foregoing. BUYER agrees to provide the Creditors with an agreement that should any one or more of those Creditors, at any time, subject only to its restricted terms, choose to sell his or her MedEx/Pegasus Creditor Shares when the market price as determined by the Stock Exchange upon which RTIN Holdings, Inc. shares are publicly traded ("the Market Price") is less than $2.00 per share, RTIN Holdings, Inc. agrees and obligates itself to pay to that Creditor a sum equal to the difference between the net market price per share, after payment of standard or discounted commissions and transaction fees (not to exceed $.10 in the aggregate) and $2.00 per share for all of such shares then sold by the particular creditor. BUYER agrees to execute any and all documents deemed reasonably necessary by the Creditors and/or 3 SELLER to memorialize its obligations to the Creditors and/or SELLER with respect to this Paragraph. SELLER will provide to the Creditor Share holders a copy of the letter provided to SELLER from BUYER's attorney concerning the restrictions on transferability of the RTIN Shares in the same form as Exhibit 1.3(B). 1.5 Intentionally blank. 1.6 As additional consideration for the sale of the Shares, BUYER agrees to grant SELLER the right to open two (2) stores in Miami, Florida or one (1) store in Miami, Florida and one (1) store in Kendall, Florida pursuant to the standard market partner licensing agreements employed by BUYER, except as otherwise provided in this Section. SELLER shall pay to BUYER four (4%) of the gross sales generated for the locations as the licensing fee for the life of the stores, which right may be assigned or transferred subject to the licensing agreement then in existence as to that transferred store and subject to a right of first refusal by BUYER. SELLER shall be under no obligation to pay any other licensing fees for the two (2) stores to BUYER. SELLER and/or assigns has the sole right to choose his locations, without exclusions or conditions, providing that Solow, Buyer and/or any other licensee shall not be permitted to open any store locations within two (2) miles of any then existing location or location then having been identified in writing to all parties . 1.7 As additional consideration for the sale of Shares, SELLER shall be entitled to receive 75% of the gross proceeds of the sale of the territories listed on Exhibit 1.7(a) ("the Territories") or $20,000 per 250,000 capita population, whichever is greater until such time as SELLER has been paid $5.3 million. If, after a period of thirty-six (36) months from the date of this Agreement, BUYER has not paid to SELLER a net sum of $5.3 million pursuant to the terms of this Section 1.7, exclusive of sums received pursuant to Section 1.1 herein, then SELLER shall be entitled to receive interest on the remaining balance due to him at a rate determined by the Wall Street Journal prime interest rate, except that such rate shall not be less than 5% per annum nor greater than 7% per annum. BUYER shall be obligated to pay to SELLER the interest due to him on a quarterly basis until such time as SELLER has received the full payment of $5.3 million, exclusive of interest and sums received pursuant to Section 1.1. BUYER shall execute a Promissory Note in the form of Exhibit 1.7(B) as evidence of this Indebtedness. As security for the indebtedness reflected in the Promissory Note attached as Exhibit 1.7(B), BUYER shall execute a Security Agreement in the form of Exhibit 1.7(C) wherein BUYER grants to SELLER a security interest in the Territories, which security interest shall be partially released as to each Territory sold upon payment to SELLER of the gross proceeds due on account of the sale of that Territory. All remaining Territories shall be released from the security interest upon the receipt by SELLER of $5.3 million, exclusive of sums received pursuant to Section 1.1 herein or interest paid. 4 2. Representations and Warranties of SELLER. 2.1 SELLER represents and warrants to the BUYER as follows. (a) The Companies are both duly incorporated and validly existing under the laws of Louisiana; the SELLER and the Companies have the corporate power and authority to execute, deliver and perform this Agreement and any other agreement or document executed by either of them under or in connection with this Agreement; and each has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and any such other agreement or document. This Agreement constitutes, and any such other agreement or document when executed will constitute, the legal, valid and binding obligations of SELLER and the Companies enforceable against SELLER and the Companies in accordance with their respective terms. (b) Neither the execution nor delivery of this Agreement nor the transactions contemplated herein, nor compliance with the terms and conditions of this Agreement will: (i) contravene any provision of law or any statute, decree, rule or regulation binding upon SELLER or the Companies or contravene any judgment, decree, franchise, order or permit applicable to SELLER or the Companies; or (ii) conflict with or result in any breach of any terms, covenants, conditions or provisions of, or constitute a default (with or without the giving of notice or passage of time or both) under the Articles of Incorporation or By-Laws of the Companies or any agreement or other instrument to which SELLER or the Companies is a party or by which either is bound, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the assets, rights, contracts or other property of the Companies. (c) All authorizations, consents or approvals of, or exemptions by, any governmental, judicial or public body or authority required to authorize, or required in connection with (i) the execution, delivery and performance of this Agreement by SELLER and the Companies, or (ii) any of the transactions contemplated by this Agreement, or (iii) any of the certificates, instruments or agreements executed by SELLER or the Companies in connection with this Agreement, or (iv) the taking of any action by SELLER or the Companies, have been obtained and are in full force and effect. Applications have been made to the DEA and the Louisiana Board of Pharmacy for approval of the transfer and/or re-issuance of Pegasus' licenses. (d) True and complete copies of the Articles of Incorporation and By-Laws of the Companies are produced, and the same have not been amended and are in full force and effect. 5 (e) The audited financial statements of the Companies and the unaudited financial statements of the Companies, including profit and loss statements for the periods then ended and balance sheets as of these dates, (the "Financial Statements") present fairly, in the case of the profit and loss statements, the results of operations of the Companies for the one-year and monthly periods then ended, and in the case of the balance sheets, the financial condition of the Companies at said dates. As at said dates, the Companies did not have any liabilities (contingent or otherwise) or assets which are not disclosed in the Financial Statements or, in the case of liabilities, reserved against therein or otherwise disclosed in writing. The Financial Statements have been prepared in accordance with generally accepted accounting principles and practices in the United States consistently applied. SELLER affirms that since the dates of the Financial Statements, (i) there have been no adverse changes in the business or financial condition of the Companies, and the Companies have conducted its business in accordance with its normal and past practices, (ii) the Companies have not incurred any additional obligations or liabilities except trade debts in the ordinary course of business, (iii) the Companies have not declared or paid any dividend or made or agreed to make any other distribution or payment in respect of any of its shares or otherwise to any of its shareholders, and (iv) the Companies have not purchased or redeemed or agreed to purchase or redeem any of its shares. BUYER affirms that it has had the opportunity to review the Financial Statements and upon the assumption that such is true, accurate and reflective of the financial condition of the Companies accepts the same as being satisfactory. The Companies have filed all tax returns which they have been required to file and have paid all taxes and interest and penalties, if any, which they have been required to pay other than as disclosed in writing to BUYER in Schedule 2.1(e). (f) On Schedule 2.1 (f), the SELLER discloses all of the patent applications, patents, copyrights, trademarks, service marks and technical information disclosures of the Companies and/or SELLER; and all other assets of the Companies; collectively called the "Companies Assets". SELLER will affirm that all of the information concerning the Companies Assets is true and correct, that the Companies own all of the rights in and to the Companies Assets; the issued patents and the copyrights, trademarks and service marks are valid patents, copyrights, trademarks and service marks under the laws of the United States and, except as noted, are duly and properly registered and recorded in the name of the Companies and/or SELLER; those copyrights, trademarks and service marks which are not registered and recorded may be properly registered and recorded in the name of the Companies and/or SELLER; all technical information disclosures are the sole property of the Companies and/or SELLER and are protected as trade secrets; and, except as previously disclosed, none of the rights in or to any of the Companies Assets has been sold, leased, assigned, encumbered or transferred in any way, except as noted in Exhibit 2.1(f), and there are no rights, options or privileges outstanding with respect to any of the Companies Assets. BUYER has had an opportunity to inspect the Companies Assets to the extent the same have been made available to it and accepts the same as is without waiving any right it may have to defects known or that should have been known by SELLER and not disclosed to BUYER. Apart from the Companies Assets and other assets set forth in the Financial Statements, the Companies have no assets, rights or other property, and no other asset right or property is required or advisable for the Companies to conduct any of its business or activities. 6 (g) Neither any of the Companies Assets nor the use of any of them (i) violates or infringes any contract, copyright, trademark, service mark, right of privacy, patent or other right, or (ii) contains any material which the Companies is not duly authorized to use, or (iii) misuses or misappropriates any trade secret or confidential or proprietary information. (h) On Schedule 2.1(h), the SELLER discloses all litigation or arbitration to which the Companies are a party. There is no other litigation or arbitration or administrative proceeding or claim asserted, pending or threatened respecting or involving the Companies, the business of the Companies or any of the Companies Assets or other assets of the Companies other than as previously disclosed in writing to BUYER. (i) On Schedule 2.1(i), the SELLER shall disclose all orders, writs, injunctions or decrees of any court, government or governmental agency or any arbitration award affecting the Companies, the business of the Companies. There are no other orders, writs, injunctions or decrees of any court, government or governmental agency or any arbitration award affecting the Companies, the business of the Companies or any of the Companies Assets or other assets of the Companies other than as previously disclosed in writing to BUYER. The Companies and its assets and operations are in compliance with all applicable laws, rules, regulations and ordinances. (j) On Schedule 2.1(j), the Seller provides a list of all the banks at which the Companies have any bank accounts. (k) SELLER is the sole owner of the Shares of the Companies and of all rights in and to the Shares; the Shares are represented by share certificates, and SELLER may sell the Shares to BUYER pursuant to this Agreement without the consent or approval of any person, corporation, partnership, governmental authority or other entity; the Shares are fully paid and non-assessable and, except as provided in this Agreement, SELLER has not sold, transferred or assigned any of its rights in or to any of the Shares; the Shares are free and clear of any liens, claims, encumbrances and restrictions of any kind except for the approvals noted above and except as noted in Schedule 2.1(k). (l) There is no option, warrant, privilege, or other right outstanding with respect to any unissued shares of the Companies, whether treasury shares or otherwise, and there is no option, warrant, privilege or other right outstanding with respect to any of the Shares; the Companies has issued and outstanding 1,000 shares of MedEx Systems, Inc. common stock, and 100 shares of Pegasus Systems, Inc. common stock, no par value, of which, 100% is owned by SELLER; there are no other shares of the Companies outstanding; the Companies are not authorized to issue any additional shares of common stock nor any other class or classes of stock. 7 3. Representations and Warranties of the Companies. 3.1 The Companies represent and warrant to BUYER that the representations and warranties of SELLER under Section 2.1 insofar as they pertain to the Companies are true and correct. 4. Representations and Warranties of BUYER. 4.1 BUYER represents and warrants to SELLER and the Companies as follows. (a) BUYER is duly incorporated and validly existing under the laws of Texas; BUYER has the corporate power and authority to execute, deliver and perform this Agreement, the Note, and any other agreement or document executed by either of them under or in connection with this Agreement; and each has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and any such other agreement or document. This Agreement constitutes, and any such other agreement or document when executed will constitute, the legal, valid and binding obligations of BUYER enforceable against BUYER in accordance with their respective terms. (b) Neither the execution nor delivery of this Agreement nor the transactions contemplated herein, nor compliance with the terms and conditions of this Agreement will: (i) contravene any provision of law or any statute, decree, rule or regulation binding upon BUYER or contravene any judgment, decree, franchise, order or permit applicable to BUYER; or (ii) conflict with or result in any breach of any terms, covenants, conditions or provisions of, or constitute a default (with or without the giving of notice or passage of time or both) under the Articles of Incorporation or By-Laws of the BUYER or any agreement or other instrument to which BUYER is a party or by which either is bound, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the assets, rights, contracts or other property of the BUYER. (c) All authorizations, consents or approvals of, or exemptions by, any governmental, judicial or public body or authority required to authorize, or required in connection with (i) the execution, delivery and performance of this Agreement by BUYER, or (ii) any of the transactions contemplated by this Agreement, or (iii) any of the certificates, instruments or agreements executed by BUYER in connection with this Agreement, or (iv) the taking of any action by BUYER, have been or at the Closing will have been obtained and at the Closing will be in full force and effect. (d) True and complete copies of the Articles of Incorporation and By-Laws of the BUYER have been produced to SELLER, and the same have not been amended and are in full force and effect. 8 (e) As of the date hereof, the authorized capital stock of BUYER consists of Twenty-Five Million (25,000,000) shares of common stock, Eleven Million Eight Hundred Fourteen Thousand Three Hundred Thirty Five (11,814,335) shares of which are issued and outstanding and Ten Million (10,000,000) shares of preferred stock, One Million Nine Hundred Ninety-Nine Thousand Nine Hundred Twenty (1,999,920) shares of which Series A preferred are issued and outstanding. All outstanding shares of Series A Preferred Stock will be purchased and retired by BUYER pursuant to a "Series A Agreement", and "Conversion Commitment Agreement", copies of which are attached as Exhibit 4.1(e)(1) All of the presently outstanding shares of capital stock of BUYER (i) have been validly authorized and issued and (ii) are fully paid and non-assessable. BUYER has not issued any other shares of its capital stock, and there are no outstanding options, warrants, calls, commitments, subscriptions, agreements or other rights of any character (including conversion, redemption or preemptive rights) relating to the acquisition of any issued or unissued capital stock of BUYER that would have a material affect upon the restricted shares issued and to be issued under this Agreement except as otherwise provided in the Series A Agreement, the Conversion Commitment Agreement, Subscription Agreement, and Series A, B and C Warrant Agreements. All outstanding options, warrants, calls, commitments, subscriptions, agreements or other rights of any character (including conversion, redemption or preemptive rights) relating to the acquisition of any issued or unissued capital stock of BUYER are listed on Schedule 4.1(e)(2). No dividends are accrued but unpaid on any capital stock of BUYER. (f) Subject to the restrictions imposed upon and affecting the RTIN Shares that BUYER issues to SELLER in accordance with Section 1.3 at the Closing shall be duly and validly issued, fully paid and non-assessable, free of preemptive rights and free of other restrictions on transfer except those imposed by applicable federal and state securities laws or otherwise disclosed in writing to SELLER. BUYER shall provide to SELLER a written opinion from BUYER's attorney concerning the restrictions on transferability of the RTIN Shares in the form set forth in Exhibit 1.3(B). (g) BUYER has filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission (the "SEC") pursuant to the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and has filed all registration statements and other documents required to be filed by it with the SEC pursuant to the Securities Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, collectively, the "SEC Documents"). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Any statements made in any such SEC Documents that are or were required to be updated and amended under applicable law have been so updated or amended. As of their respective dates, the financial statements of BUYER included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC applicable with respect thereto. Such financial statements have been prepared in accordance with GAAP, consistently applied, during the period involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of BUYER as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal and recurring year-end audit adjustments that are not material). 9 (h) The Financial Statements present fairly, in the case of the profit and loss statements, the results of operations of the BUYER for the one-year and monthly periods then ended, and in the case of the balance sheets, the financial condition of the BUYER at said dates. As at said dates, the BUYER did not have any material liabilities (contingent or otherwise) or assets which are not disclosed in the Financial Statements or, in the case of liabilities, reserved against therein. The Financial Statements have been prepared in accordance with generally accepted accounting principles and practices in the United States consistently applied. BUYER affirms that since the dates of the Financial Statements, (i) there have been no adverse changes in the business or financial condition of the BUYER, and the BUYER has conducted its business in accordance with its normal and past practices, (ii) the BUYER has not incurred any additional material obligations or liabilities except trade debts in the ordinary course of business, (iii) the BUYER has not declared or paid any dividend or made or agreed to make any other distribution or payment in respect of any of its shares or otherwise to any of its shareholders, and (iv) the BUYER has not purchased or redeemed or agreed to purchase or redeem any of its shares other than the Series A Preferred Shares referenced hereinabove. The obligation of BUYER imposed by this Section shall survive the date of Closing, however, upon satisfaction of all obligations of BUYER to SELLER outlined herein, SELLER shall have no further rights, title or interest to request or receive the Financial Statements. The BUYER has filed all tax returns which it has been required to file and has paid all taxes and interest and penalties, if any, which it has been required to pay. (i) Intentionally blank. (j) On Schedule 4.1(j), the BUYER discloses all litigation or arbitration to which the BUYER is a party. There is no other litigation or arbitration or administrative proceeding or claim asserted, pending or threatened respecting or involving the BUYER, the business of the BUYER or any of the BUYER's Assets or other assets of the BUYER. (k) On Schedule 4.1(k), the BUYER discloses all orders, writs, injunctions or decrees of any court, government or governmental agency or any arbitration award affecting the BUYER, and the business of the BUYER. There are no other orders, writs, injunctions or decrees of any court, government or governmental agency or any arbitration award affecting the BUYER, the business of the BUYER or any of the BUYER's Assets. The BUYER and its assets and operations are in compliance with all applicable laws, rules, regulations and ordinances. 10 (l) BUYER is acquiring the MedEx Stock and the Pegasus Stock for its own account, for investment, and not with a view to any "distribution" within the meaning of the Securities Act. BUYER has no present intention to make any transfer of the MedEx Stock or the Pegasus Stock. (m) BUYER understands that because the MedEx Stock and the Pegasus Stock have not been registered under the Securities Act, it cannot dispose of any or all of the MedEx Stock or Pegasus Stock unless such shares are subsequently registered under the Securities Act or exemptions from registration are available. BUYER understands that no public market now exists for the MedEx Stock or Pegasus Stock and that there is no assurance that a public market will ever exist for such securities. BUYER acknowledges and understands that it has no registration rights. By reason of these restrictions, BUYER understands that it may be required to hold the MedEx Stock and the Pegasus Stock for an indefinite period of time. BUYER agrees that in no event will it make a transfer or disposition of any of the MedEx Stock or the Pegasus Stock unless and until, if requested by the applicable Company, at the expense of BUYER or transferee, it shall have furnished to the applicable Company an opinion of counsel or other evidence, reasonably satisfactory to such Company, to the effect that such transfer may be made without registration under the Securities Act. BUYER understands that each certificate representing the MedEx Stock and the Pegasus Stock will bear the following legend substantially as follows: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE MORTGAGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT. (n) BUYER is knowledgeable and experienced in making investment decisions and is able to bear the economic risk of loss of its investment in the Companies, except to the extent that such loss is the result of a material misrepresentation or breach by SELLER and/or the Companies. (o) BUYER is acting on its own behalf in connection with the investigation and examination of the Companies and its decision to execute these documents. (p) BUYER'S common stock is traded on the OTC BB. No circumstances exist that could reasonably be expected to result in Buyer's being ineligible for trading on the OTC BB as of the Closing. 11 (q) Within twelve months of the date of this Agreement, BUYER shall use commercially reasonable efforts to cause it to be substituted for SELLER as a guarantor of the Companies and attempt to obtain full releases of SELLER'S personal guarantees of Companies indebtedness to the extent that the guarantees of SELLER are listed with specificity upon Schedule 4.1(q) hereof and provided further, however, that the existence of the obligation that is guaranteed by SELLER does not result in a default under this Agreement. 5. Indemnities. 5.1 The representations and warranties of the Companies, SELLER and BUYER will be deemed made on execution of this Agreement and at the Closing, and all of those representations and warranties and all of the covenants and obligations of the parties under this Agreement will survive the Closing. 5.2 BUYER will hold SELLER and the Companies harmless from and pay any loss, damage, cost or expense (including, without limitation, legal fees and court costs) which either SELLER or the Companies incurs by reason of any representation or warranty of BUYER being incorrect or by reason of any breach by BUYER of any of its covenants or obligations under this Agreement. 5.3 The Companies will hold BUYER harmless from and pay any loss, damage, cost or expense (including, without limitation, legal fees and court costs) which BUYER incurs by reason of any representation or warranty of the Companies being incorrect or by reason of any breach by the Companies of any of its covenants or obligations under this Agreement. 5.4 SELLER will hold BUYER harmless from and pay any loss, damage, cost or expense (including, without limitation, legal fees and court costs) which BUYER incurs by reason of any representation or warranty of SELLER being incorrect or by reason of any breach by SELLER of any of its covenants or obligations under this Agreement. 5.5 BUYER acknowledges that SELLER has represented to it that there is approximately $6 million owed by SELLER and the Companies in the aggregate to third party creditors ("the Indebtedness") including monies borrowed by SELLER personally for the use and benefit and on behalf of the Companies for business purposes. For each creditor holding a portion of the Indebtedness there is shown on Exhibit 5.5A hereof the name and address of such creditor with the current balance, evidence and terms of the Indebtedness due and owing that creditor. BUYER shall have no obligation to assume and pay any indebtedness of SELLER unless such indebtedness is itemized and listed upon Exhibit 5.5A or elsewhere specifically identified by creditor and the amount of the indebtedness. BUYER shall have no obligation to indemnify SELLER for those debts listed in Section 1.4 herein for whom MedEx/Pegasus Creditor Shares are issued to SELLER. SELLER shall personally negotiate the payment of the indebtedness owed to the third party creditors listed on Exhibit 5.5B, and BUYER agrees not to contact those third party creditors listed on Exhibit 5.5B. BUYER will make monthly payments of $20,500.00 to SELLER for payment of the MedEx/Pegasus Creditors listed on Exhibit 5.5C, and after 24 months, BUYER shall pay SELLER the sum of $1,040,000 for payment by SELLER of the remaining indebtedness owed to the Creditors listed on Exhibit 5.5C. 12 5.6 The parties will hold each other harmless, defend and indemnify each other from any loss, damage, cost or expense (including, without limitation, legal fees and court costs) from any claim for commissions, transaction fees and brokerage fees arising, directly or indirectly, to the transaction made the subject of this Agreement and SELLER and Companies expressly warrant and represent that there are no commissions, transaction fees, brokerage fees or other fees due and owing or which may become due and owing as the result of any relationship, agreement or understanding between SELLER, Companies and a third party. SELLER for valuable consideration paid agrees to hold BUYER harmless for claims for commissions, transaction fees and brokerage fees arising, directly or indirectly, from the transaction made the subject of this Agreement brought by Craig Longhurst and/or Threnody, L.L.C. 5.7 The rights and remedies of the parties under this Section 5 are in addition to and not by the way of limitation upon any other rights and remedies. The rights and remedies of the parties are cumulative, but a party will not be entitled to incidential or consequential damages or loss of profits. 6. Transactions Completed at Closing. 6.1 The following requirements will be completed or satisfied, as the case may be, at the Closing. (a) SELLER delivers to BUYER share certificates representing the Shares, which certificates will be duly endorsed by SELLER to BUYER. (b) To effect transfer, BUYER delivers said share certificates to the Companies and the Companies will deliver to BUYER a certificate, duly executed and issued in the name of BUYER, representing 100% of the issued and outstanding shares of the Companies, no par value, registered in the name of BUYER. (c) BUYER delivers to SELLER the sum of $900,000. (d) Intentionally blank. (e) SELLER and BUYER will deliver a Shareholder's Agreement in the form of Exhibit 1.3(a) hereto, and the Shareholder's Agreement is in full force and effect. (f) Intentionally blank. (g) Buyer acknowledges and agrees to honor the employment contracts between the Companies and the following: (1) Trina Skoller (2) Louis Rosen (3) Elizabeth Prechter (4) Paul Drake provided that a Contract has not been breached by the respective employee. 13 (h) Within four business days of the Closing, BUYER, or its transfer agent, delivers to SELLER the certificates for restricted shares representing the RTIN Shares, registered in the name of SELLER. (i) Within four business days of the Closing, BUYER, or its transfer agent, delivers to SELLER the certificates for restricted shares representing the MedEx/Pegasus Creditor Shares, registered in the name of SELLER. (j) Intentionally blank. (k) Intentionally blank. (l) BUYER is furnished with copies of all approvals and consents required in connection with this Agreement and a certificate by an officer or director of the Companies and an officer or director of SELLER certifying that the same are in full force and effect. (m) Intentionally blank. . (n) BUYER executes a Security Agreement in which BUYER's and MedEx's interest in the Territories are pledged as security for BUYER's and MedEx's obligations pursuant to this Agreement. (o) SELLER and the Companies certify that the officers and directors of the Companies are as follows: (i) Officers of MedEx Systems, Inc.: President: Laurence I. Solow Secretary: Laurence I. Solow Treasurer: Laurence I. Solow (ii) Directors of MedEx Systems, Inc. and Pegasus Pharmacy, Inc.: Laurence I. Solow Louis Rosen Trina Skoler (iii) Officers of Pegasus Pharmacy, Inc.: President: Paul Drake Secretary: Laurence I. Solow Treasurer: Laurence I. Solow 14 (p) The Companies will be furnished with resignations by all current officers and directors of the Companies and the BUYER will be furnished with copies of these. (q) The parties furnish each other with certificates by one of their officers or directors (i) certifying the adoption by their directors and, if necessary, by their shareholders, of resolutions authorizing the execution, delivery and performance of this Agreement and any other agreements and documents in connection herewith, and (ii) also certifying the names, positions and signatures of the persons authorized to sign on their behalf. (r) The parties will furnish each other with certificates of the appropriate governmental authority in Louisiana or Texas, as the case may be, dated within five (5) days of the Closing confirming that the parties are in existence and good standing in their respective jurisdictions ("Certificates of Good Standing"). 6.2 Except for the Certificates of Good Standing, the agreements, certificates, consents and other documents to be executed and delivered at the Closing shall be dated the date of the Closing. 6.3 BUYER shall notify the applicable governing authorities concerning this transaction within the applicable periods provided by law. SELLER shall comply with all reasonable requests by BUYER to assist in the notification of the governing authorities and transfer of licenses, if applicable. 6.4 Completion or satisfaction, as the case may be, of all of the requirements under Section 6 (including the correctness of the statements in the certificates and other documents delivered) are conditions precedent to completing the Closing under this Agreement. No part of the Closing under this Agreement will be deemed completed unless all requirements under this Agreement shall have been completed or satisfied. 7. Governance of BUYER. (a) SELLER shall be entitled to notice and an opportunity to attend and be heard at all meetings of BUYER's Board of Directors or other matters involving BUYER's Board action. (b) Intentionally omitted. (c) So long as SELLER owns 5% or greater of the outstanding stock of BUYER or 5 years, whichever occurs last, the Board of Directors of BUYER shall be prohibited from taking any action, either prior to or after Closing, that would be inconsistent with any term or condition set forth in this Agreement without prior written consent of SELLER. 8. Remedies upon Breach. In the event that any party, without good cause, fails to fulfill any material obligations outlined in this Agreement ("the Breaching Party"), then the other party ("the Non-Breaching Party") may demand the immediate payment, as liquidated damages of $250,000 cash ("Liquidated Damages") and, in the case of SELLER, he may retain the funds paid to him and/or MedEx and/or Pegasus by RTIN in addition to the Liquidated Damages. 15 9. Governing Law. This Agreement will be governed by and construed in accordance with the law of Louisiana. Venue shall lie solely in the United States District Court, Eastern District of Louisiana. 10. Amendment and Waiver. 10.1 This Agreement may not be amended or terminated except by an instrument in writing signed by all of the parties hereto or upon material breach with remedies stated therefor. 10.2 No provision of this Agreement and no right or obligation under this Agreement may be waived except by an instrument in writing signed by the party waiving the provision, right or obligation in question. 11. Assignment. No party may transfer or assign any of its rights or obligations under this Agreement and any attempt thereat shall be null and void. 12. Notices. 12.1 Any notice, request, demand, waiver, consent, approval, or other communication which is required or permitted to be given to any party under this Agreement shall be in writing and shall be given to that party with copy at the addresses or fax numbers set forth below or, in the event of a change in any address or fax number, then to such other address or fax number as to which notice of the change is given: (a) If to SELLER: Laurence I. Solow 801 Rue Burgundy #213 Metairie, Louisiana 70005 Fax No.: (504) 831-9924 With a copy to (which shall not constitute notice): David J. Halpern One Lakeway Center, Suite 605 3900 N. Causeway Boulevard Metairie, Louisiana 70002 Fax No.: (504) 831-2609 16 (b) If to the Companies: MedEx Systems, Inc. Pegasus Pharmacy, Inc. 540 Elmwood Park Boulevard Jefferson, Louisiana 70123 Fax No.: (504) 733-8789 (c) If to BUYER: RTIN Holdings, Inc. 3218 Page Road Longview, Texas 75605 Attention: Curtis A. Swanson Fax No.: (903) 234-9777 with a copy to (which shall not constitute notice): Bruce A. Smith P. O. Drawer 2072 Longview, Texas 75606 Fax No. (903) 753 5123 12.2 Notice shall be deemed given on receipt. 13. Section Headings. Section headings are for convenient reference only and shall not affect the meaning or have any bearing on the interpretation of any provision of this Agreement. 14. Severability. If any provision of this Agreement is held invalid under applicable law, such provision will be deemed ineffective to the extent of such invalidity, and such invalid provision will be modified to the extent necessary to make it valid and enforceable. Any such invalidity will not invalidate the remainder of this Agreement to the extent that such remainder does not result in an unjust hardship or an inequitable hardship on one or both of the parties. 17 15. Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against BUYER and SELLER, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto. 16. Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. 17. Publicity. No party shall make any publicity release or announcement concerning this Agreement or the transactions contemplated hereby without the prior written approval thereof by the other parties, as the case may be, except as required by applicable law and regulations, in which case the party issuing the release will so advise the other parties in writing and submit a copy of such release in advance of such issuance. 18. Separate Counsel. The Parties acknowledge and agree that with respect to the agreements contained in this Agreement, each such party is relying solely on its own legal counsel and not on any advice, statements or representations of the other party's counsel. 19. Attorney's Fees. In the event either party retains an attorney to enforce any of the provisions of this Agreement, the prevailing party shall be entitled to the award of its attorney's fees incurred in connection therewith. 20. Entire Agreement. SELLER, the Companies, BUYER and others entered into a document as the result of the settlement (cumulatively "the settlement documents") of a legal proceeding in Civil Action Docket No. 2-02CV-159, United States District Court for the Eastern District of Texas, Marshall Division on or about the 4th day of April, 2003, (which is incorporated herein by reference) such settlement documents and the terms thereof and by the execution of this Agreement are ratified, confirmed and acknowledged as being in full force and effect. The settlement documents are a separate and independent agreement which does not merge into nor become a part of this Agreement and exists outside this Agreement and survive the terms, provisions and conditions of this Agreement. 18 21. Execution by Facsimile. Delivery of an executed counterpart of a signature page to this Agreement by telecopier or facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. This Agreement constitutes the entire agreement among the parties with respect to the other matters described herein. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. RTIN Holdings, Inc. By: -------------------------------- Curtis Swanson, President Laurence I. Solow, Individually MedEx Systems, Inc. By: -------------------------------- Laurence I. Solow, President Pegasus Pharmacy, Inc. By: -------------------------------- Laurence I. Solow, Secretary EX-4.1 4 rtin8kex41062703.txt CONVERSION COMMITMENT AGREEMENT EXHIBIT 4.1 CONVERSION COMMITMENT AGREEMENT This Conversion Commitment Agreement (the "Conversion Commitment Agreement") dated and effective as of June 23, 2003, is by and between RTIN Holdings, Inc., a Texas corporation (the "Company"), the holders of the Debentures (defined herein below), each of whom has executed a Holder's Signature page attached hereto pursuant to which the holder agrees to be a party to this Conversion Commitment Agreement (the "Holders"), and the investors, each of whom has executed an Investor's Signature page attached hereto pursuant to which such investor agrees to be a party to this Conversion Commitment Agreement (the "Investors"). W I T N E S S E T H : WHEREAS, on May 29, 2002 (the "Issue Date"), the Company filed a Certificate of Designation to issue the Company's Series A 10% Convertible Preferred Stock, Par Value $.10 (the "Preferred Shares"); WHEREAS, pursuant to that certain Series A Preferred Agreement, dated June 24, 2003 (the "Series A Agreement"), the Company agreed to issue, effective May 29, 2002, 1,999,920 shares of its Series A Preferred Stock (the " Preferred Stock") to the Holders in exchange for that certain Convertible Debenture dated June 28, 1998, in the original principal amount of $1,500,000 and that certain Convertible Debenture dated February 29, 2000 in the original principal amount of $690,000 (the "Debentures"); and WHEREAS, as a condition to this Agreement the Company, the Holders and the Investors have entered into a Series A Stock Agreement of even date hereof pursuant to which the Investors acquired some of the Preferred Stock (the "Series A Agreement"); and WHEREAS, the Company, the Holders and the Investors have determined that it would be each in their best interests to convert the Preferred Stock to Common Stock, $.01 par value per share (the "Common Stock"), of the Company; and WHEREAS, it is a condition to the obligations of the parties to the Series A Agreement that they sign and deliver this Conversion Commitment Agreement; NOW, THEREFORE, the parties agree as follows: Article I Exchange Section 1.1 Exchange. Conditioned upon the concurrent closing of the transactions contemplated by the Series A Agreement, each of the Holders and the Investors agree to transfer and deliver to the Company for exchange all shares of Preferred Stock now owned or hereafter acquired by them, and the Company hereby agrees to receive, cancel and exchange shares of Preferred Stock from the Holders and the Investors for shares of Common Stock on the effective date hereof, at the rate of two and three quarters (2.75) share (the "Shares") of Common Stock for each share of Preferred Stock. 1 Section 1.2 Manner of Delivery. Simultaneously with the execution of this Conversion Commitment Agreement, the parties shall execute an escrow agreement (the "Conversion Escrow Agreement") and a copy of the Conversion Escrow Agreement and this Conversion Commitment Agreement shall be delivered to Harbour, Smith, Harris & Merritt, P.C. (the "Escrow Agent"). On or before the Closing under the Series A Agreement (a) the Holders shall deliver to the Escrow Agent or its designated depository one or more certificates evidencing 1,999,920 Preferred Shares, duly endorsed in blank (which endorsement may be evidenced by one or more duly executed stock powers in blank); and (b) the Company shall deliver to the Escrow Agent one or more duly authorized, issued and executed certificates representing Shares in the exchange ratio set forth above in the name of the Holders (which shall result in the delivery of 1,625,000 free trading shares to Holders) and Investors (which shall result in the Delivery of 3,882,133 free trading shares to the Investors) or, if the Company otherwise has been notified, in the name of the Holders' or Investors' nominees. By executing and delivering this Conversion Commitment Agreement, the Holders, the Company and the Investors each hereby agree to observe the terms and conditions of the Conversion Escrow Agreement, all of which are incorporated herein by reference as if fully set forth herein. Article II Representations and Warranties of Investors Section 2.1 Representations of Investors. Each of the Investors, as to themselves individually and not as to any other Investor, makes the following representations, warranties and covenants. A. Organization, Existence and Power. Each Investor is a corporation, limited liability company, limited partnership or other organization duly organized, validly existing and in good standing, and has full corporate or partnership power and authority to enter into this Conversion Commitment Agreement and to consummate the transactions contemplated hereunder. Neither the execution and delivery of this Conversion Commitment Agreement, nor the consummation of the transactions contemplated hereunder conflicts with, or will result in any violation of (a) the charter, by-laws, partnership agreement or other organizational documents of such Investor, each as currently in effect, or (b) any material loan or credit agreement, note, bond, mortgage, indenture, lease, contract or other agreement to which such Investor is a party or by which any of its assets are bound. B. Authorization and Execution. This Conversion Commitment Agreement has been duly and validly authorized, executed and delivered by the Investors and is a valid and binding agreement of each of the Investors enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally. 2 C. Approvals. No authorization, approval or consent of any court or public or governmental authority is required to be obtained by the Investors for the execution of this Conversion Commitment Agreement or the consummation of the transactions contemplated hereby, except such authorizations, approvals and consents as have been obtained by the Investors prior to the date hereof. D. Investment Intent. Each Investor purchased or acquired the shares of Preferred Stock for its own account, for investment purposes only and not with a view towards or in connection with the public sale or distribution thereof in violation of the Securities Act. Each Investor is acquiring the Shares for its own account, for investment purposes only and not with a view towards or in connection with the public sale or distribution thereof in violation of the Securities Act. E. Accredited Investor. Each Investor is (i) an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act, (ii) experienced in making investments in securities with similar risks as the Shares, (iii) capable, by reason of their business and financial experience, of evaluating the relative merits and risks of an investment in the Shares, and (iv) able to afford the loss of its investment in the Shares. F. Unregistered Securities. Each Investor understands that the Shares have not been approved or disapproved by the Securities and Exchange Commission (the "Commission") or any state securities commission and that the Shares are being offered and sold by the Company in reliance on an exemption from the registration requirements of the Securities Act and any relevant state securities and "blue sky" laws. The Company is relying upon the accuracy of, Investors' compliance with, Investors' representations, warranties and covenants set forth in this Conversion Commitment Agreement to determine the availability of such exemption and the eligibility of the Investors to acquire the Shares. G. Access to Information. Each Investor has received and has carefully reviewed a copy of the documents and reports (and exhibits thereto) filed by the Company with the Commission and available on the Commission's EDGAR system, including, but not necessarily limited to, the Company's Annual Report or Form 10-KSB for the year ended December 31, 2002, the Quarterly Report on Form 10-QSB for the fiscal quarter ended since then, the Proxy Statement for the stockholder meeting held in April 2003 (collectively, the "Documents"). Each Investor has also received any additional information that the Investor has requested and has had the opportunity to communicate with representatives of the Company, to each Investor's satisfaction and understands the material contained in the Documents. Each Investor realizes that the purchase of the Shares is a speculative investment, and that the tax and other economic benefits that may be derived therefrom are uncertain. In determining whether or not to proceed with the transaction described herein, each Investor has relied solely upon information set forth in the Documents and upon independent investigations made by such Investor. None of the Investors have been furnished with any other offering literature or prospectus, or received or been furnished with any information, statement or representation, oral or written, that varies in any material way from the information presented and statements made in the Documents. 3 Section 2.2 Representations and Warranties of the Company. The Company hereby represents and warrants to the Holders and the Investors as follows. A. Organization, Existence and Power. The Company is a corporation duly organized, validly existing and in good standing, and has full corporate or partnership power and authority to enter into this Conversion Commitment Agreement and to consummate the transactions contemplated hereunder. Neither the execution and delivery of this Conversion Commitment Agreement, nor the consummation of the transactions contemplated hereunder conflicts with, or will result in any violation of (a) the charter or by-laws of the Company, each as currently in effect, or (b) any material loan or credit agreement, note, bond, mortgage, indenture, lease, contract or other agreement to which such the Company is a party or by which any of its assets are bound. B. Authorization and Execution. This Conversion Commitment Agreement has been duly and validly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally. C. Approvals. No authorization, approval or consent of any court or public or governmental authority is required to be obtained by the Company for its execution of this Conversion Commitment Agreement or the consummation of the transactions contemplated hereby, except such authorizations, approvals and consents as have been obtained by the Company prior to the date hereof. D. Issuance of Shares. When issued pursuant to this Conversion Commitment Agreement, the Shares will be duly authorized, validly issued, fully paid and non-assessable. There are no outstanding agreements or preemptive or similar rights affecting the Shares. E. No Misrepresentation. No representation or warranty of the Company contained in this Conversion Commitment Agreement or any of the other Documents, any schedule, annex or exhibit hereto or thereto or any agreement, instrument or certificate furnished by the Company to the Holders or the Investors pursuant to this Conversion Commitment Agreement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading. F. No Integrated Offering. Neither the Company nor any of its affiliates nor any person acting on its or their behalf has, directly or indirectly, made any offer or sales of any security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption from registration under Regulation D and/or Rule 144 in connection with the offer and sale of the Common Shares as contemplated hereby. 4 G. Prior Issues. During the twelve (12) months preceding the date hereof, the Company has not issued any common stock or convertible securities in capital transactions which have not been fully disclosed in the Company's filings with the SEC. All such issuances have been fully converted into shares of common stock and there is no outstanding unconverted debt or convertible securities from those transactions. Representations and Warranties of Holders Section 2.3 Representations of Holders. Each of the Holders, as to themselves individually and not as to any other Investor, makes the following representations, warranties and covenants. A. Organization, Existence and Power. Each of the Holders is a corporation, limited liability company, limited partnership or other organization duly organized, validly existing and in good standing, and has full corporate or partnership power and authority to enter into this Conversion Commitment Agreement and to consummate the transactions contemplated hereunder. Neither the execution and delivery of this Conversion Commitment Agreement, nor the consummation of the transactions contemplated hereunder conflicts with, or will result in any violation of (a) the charter, by-laws, partnership agreement or other organizational documents of such Holder, each as currently in effect, or (b) any material loan or credit agreement, note, bond, mortgage, indenture, lease, contract or other agreement to which such Investor is a party or by which any of its assets are bound. B. Authorization and Execution. This Conversion Commitment Agreement has been duly and validly authorized, executed and delivered by the Investors and is a valid and binding agreement of each of the Holders enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally. C. Approvals. No authorization, approval or consent of any court or public or governmental authority is required to be obtained by the Holders for the execution of this Conversion Commitment Agreement or the consummation of the transactions contemplated hereby, except such authorizations, approvals and consents as have been obtained by the Holders prior to the date hereof. Article III Covenants Section 3.01. Exempt Offering. This exchange is being made pursuant to the exemption from the registration contained in Section 3(a)(9) of the Securities Act and afforded by Rule 149 thereunder. The Company is relying in part on the Holders' and Investors' representations as set forth herein for purposes of claiming such exemptions. 5 Section 3.02 Tacking. The common shares which will be issued pursuant to this transaction will carry tacking privileges whereby the holding period for the shares began at the time of investment by the Holders and is therefore immediately subject to resale without volume limitations pursuant to Rule 144 of the Securities Act. Section 3.04. Indemnification. A. The Company agrees to indemnify, hold harmless, reimburse and defend the Holders and the Investors against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Holders and the Investors which results, arises out of or is based upon (a) any misrepresentation by Company or breach of any warranty by Company in this Agreement or in any Exhibits or Schedules attached hereto, or Reports or other Written Information; or (b) any breach or default in performance by Company of any covenant or undertaking to be performed by Company hereunder, or any other agreement entered into by the Company and the Holders or the Investors relating hereto. B. the Investors agree to indemnify, hold harmless, reimburse and defend the Company at all times against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company which results, arises out of or is based upon (a) any misrepresentation by the Investors in this Agreement or in any Exhibits or Schedules attached hereto; or (b) any breach or default in performance by the Investors of any covenant or undertaking to be performed by the Investors hereunder, or any other agreement entered into by the Company and the Holders or the Investors relating hereto. C. the Holders agree to indemnify, hold harmless, reimburse and defend the Company at all times against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company which results, arises out of or is based upon (a) any misrepresentation by the Holders in this Agreement or in any Exhibits or Schedules attached hereto; or (b) any breach or default in performance by the Holders of any covenant or undertaking to be performed by the Holders hereunder, or any other agreement entered into by the Company and the Holders or the Investors relating hereto. Article IV Miscellaneous. Section 4.01. Notices. All notices or other communications given or made hereunder shall be in writing and shall be personally delivered or deemed delivered the first business day after being telecopied (provided that a copy is delivered by first class mail) to the party to receive the same at its address set forth below or to such other address as either party shall hereafter give to the other by notice duly made under this Section; 6 if to the Company, to: RTIN Holdings, Inc. Attn: Curtis Swanson 3218 Page Road Longview, Texas 75605 Fax: 903.234.9777 With a copy to: Franklin, Cardwell & Jones Attn: Larry Wilson 1001 McKinney 18th Floor Houston, TX 77002 Fax: 713.222.0938 if to the Holders, to such Stockholder at the address on the books and records of the Company with a copy to: Law Offices of Michael S. Rosenblum Attn: Michael S. Rosenblum, Esq. 1875 Century Park East, Suite, 700 Los Angeles, California 90067 (310) 286-3010 (fax) if to the Investors, to such Investor at the address on the Investor's Signature Page: if to the Escrow Agent, to: Harbour, Smith, Harris & Merritt, PC Attn: Bruce Smith P.O. Box 2072 Longview, Texas 75606 (903) 753-5123 (fax) Section 4.02. Closing. The consummation of the transactions contemplated herein shall take place at the offices of the Escrow Agent, as soon as practical after Closing of the Series A Agreement. Section 4.03. Entire Agreement; Assignment. This Agreement, The Series A Agreement and all agreements expressly referred to herein or therein represent the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties. No right or obligation of any party shall be assigned by that party without prior notice to and the written consent of the other parties. 7 Section 4.04. Execution. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. A facsimile signature by any party on a counterpart of this Agreement shall be binding and effective for all purposes. Such party shall, however, subsequently deliver to the other party an original executed copy of this Agreement. Section 4.05. Law Governing this Agreement. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the federal courts sitting in the district of which New York, New York is a part if it can acquire jurisdiction or in the state courts of the State of New York located in the city of New York, New York. Both parties and the individuals executing this Agreement and other agreements on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Section 4.06. Consent to Jurisdiction. Subject to Section 4.05 hereof, each of the Company, the Holders and the Investors hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law. Section 4.07. Execution by Facsimile. Delivery of an executed counterpart of a signature page to this Agreement by telecopier or facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. 8 IN WITNESS WHEREOF, the / parties have signed and delivered this Conversion Commitment Agreement as of the date first above written. RTIN HOLDINGS, INC. By: ---------------------------------- Name: Title: THE HOLDERS DOMINION CAPITAL FUND LIMITED BY: ---------------------------------- Name: Title: SOVEREIGN PARTNERS LIMITED PARTNERSHIP BY: ---------------------------------- Name: Title: 9 INVESTOR'S SIGNATURE PAGE The undersigned Investor hereby subscribes to the foregoing Conversion Commitment Agreement. If the Investor is an entity, this Conversion Commitment Agreement has been executed by its duly authorized officer or signatory. The undersigned Investor specifically represents and acknowledges that it (a) is a sophisticated investor who, by expertise and experience, is familiar with the risks of speculative investments, (b) has had the opportunity to pose questions to and receive answers from the management of RTIN Holdings, Inc. regarding the investment, (c) is financially able invest in speculative investments and afford the potential loss of its entire investment, and (d) has not received any information about RTIN Holdings, Inc. and has not relied upon any representations of any person except as set forth in the Conversion Commitment Agreement. Investor Name: -------------------------------------------- By: -------------------------------------------- Name: Title: ADDRESS OF INVESTOR: - -------------------------------------------------------------- - -------------------------------------------------------------- Phone: -------------------------------------------------------- Fax: ---------------------------------------------------------- EX-4.2 5 rtin8kex42062703.txt SUBSCRIPTION AGREEMENT EXHIBIT 4.2 RTIN HOLDINGS, INC. (a Texas corporation) SUBSCRIPTION AND INVESTMENT REPRESENTATION AGREEMENT RTIN Holdings, Inc. 3218 Page Rd. Longview, TX 76506 Gentlemen: SECTION 1 1.1 Subscription. The undersigned hereby subscribes for and agrees to purchase the number of units set forth on the signature page, each unit to consist of eight (8) shares of the Common Stock, $.01 par value per share (the "Common Stock"), of the Company; five (5) Series A 2003 Warrants (the "Series A Warrants"); five (5) Series B 2003 Warrants (the "Series B Warrants"), and twenty-five (25) Series C 2003 Warrants (the "Series C Warrants" and together with the Series A Warrants and the Series B Warrants, the "Warrants" and together with the Common Stock, the "Securities") of RTIN Holdings, Inc., a Texas corporation (the "Company"), for the amount indicated on the signature page hereof ("Purchase Payment"), on the terms and conditions described herein in connection with the offering (the "Offering") of the Securities. This letter agreement shall be referred to herein as the "Subscription Agreement". In connection with this subscription and intending that the Company rely thereon, the undersigned also tenders herewith a completed and executed Investor Suitability Questionnaire in the form attached hereto as Exhibit A. 1.2 Acceptance or Rejection of Subscription. The undersigned understands and agrees that the Company reserves the right to reject his subscription for the Securities, in whole or in part, if in its judgment, the Company deems such action is in the best interests of the Company. The undersigned understands and agrees that the Purchase Payment will be will be paid to the Company simultaneously with the delivery of this subscription in exchange for the issuance of Securities. The undersigned will not be entitled to the return of any part of the Purchase Payment after the issuance of the Securities. 1.3 Escrow Agreement. Simultaneously with the execution of this Subscription Agreement, the parties shall enter an escrow agreement in the form attached as Exhibit B hereto (the "Subscription Escrow Agreement") and shall (a) deliver a copy of this Subscription Agreement and the Subscription Agreement to Harbour, Smith, Harris & Merritt, PC (the "Escrow Agent"), (b) the undersigned shall deliver to the Escrow Agent the Purchase Amount in immediately available funds, and (c) the Company shall deliver to the Escrow Agent one or more duly authorized, issued and executed certificates in the name of the undersigned, or if the Company otherwise has been notified, in the name of the undersigned's nominees, representing the Shares and one or more duly authorized, issued and executed certificates in the name of the undersigned, or if the Company otherwise has been notified, in the name of the undersigned's nominees, representing the Warrants. SECTION 2 2.1 Investor Representations and Warranties. The undersigned hereby acknowledges, represents and warrants to, and agrees with, the Company as follows: (a) The undersigned is acquiring the Securities for this own account, for investment purposes only, and not with a view to the resale, distribution or fractionalization thereof, in whole or in part, and no other person has or is intended to have a direct or indirect beneficial interest in the Securities. (b) The undersigned acknowledges his understanding that the offering and sale of the Securities is intended to be exempt from registration under the Securities Act of 1933, as amended (the "Act"), by virtue of Section 4(2) of the Act. In furtherance thereof, the undersigned represents and warrants to and agrees with the Company and the Company as follows: (i) The undersigned has the financial ability to bear the economic risk of his investment in the Company (including its possible total loss of the Purchase Amount), has adequate means of providing for his current needs and personal contingencies and has no need for liquidity with respect to the investment in the Company. (ii) No one has acted as his purchaser representative in connection with evaluating the merits and risks of an investment in the Company in general and the suitability of the investment for the undersigned in particular. (iii) The undersigned has such knowledge and experience in business and financial matters as to be capable of evaluating the risks of an investment in the Securities and has obtained, in his judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Securities. (iv) The undersigned hereby reconfirms as representations and warranties, as though fully set forth herein, each of the statements and answers of the undersigned set forth in his Investor Suitability Questionnaire (Exhibit "A"). (v) The undersigned is not subscribing for Securities as a result of or subsequent to any advertisement, article, notice or other communication published in a newspaper, magazine or similar media, or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a purchase by a person not previously known to the 2 undersigned in connection with investments in securities generally. No person will be paid any compensation by the undersigned (whether as a broker, salesperson, Purchaser Representative, or in any other capacity) in connection with the undersigned's purchase of Securities. (c) The undersigned: (i) has been furnished a copy of or been given an opportunity to review the following documents (the "Company Documents"): (a) Articles of Organization; (b) Bylaw; (c) Annual Report on Form 10-KSB for the year ended December 31, 2001; (d) Quarterly Reports on Form 10-QSB for the periods ended March 31, 2002, June 30, 2002, and September 30, 2002; (e) Current Reports on Form 8-K filed since December 31, 2001 (f) Annual Report on Form 10-KSB for the year ended December 31, 2002. (ii) has had the opportunity to obtain any additional information relating to the Offering and the Company Documents, and such other documentation or information regarding the company that he has requested, and is satisfied with such review. The undersigned agrees to hold such information in strict confidence and indemnify the Company for any loss, cost or damage incurred by the Company as a result of the breach of such agreement. (iii) has been given the opportunity to ask questions of and receive answers from, the Company and the officers of the Company concerning the terms and conditions of the Offering and other matters pertaining to an investment in the Securities, and has been given the opportunity to obtain such additional information necessary to verify the information contained in the Offering Memorandum or that which was otherwise provided in order for it to evaluate the merits and risks of an investment in the Company to the extent the Company and the officers of the Company possess such information or can acquire it without unreasonable effort or expense, and has not been furnished any other Offering literature or prospectus, except as mentioned herein. (iv) has determined that the Securities are suitable for him and that he understands and can bear the risks of loss associated with the Company's intended business policies and the implementation thereof. (d) In making his decision to purchase the Securities herein subscribed for, the undersigned has relied solely upon independent investigations made by him. The undersigned is not relying on the Company with respect to the tax and other economic considerations involved in this investment. 3 (e) The undersigned represents, warrants and agrees that he will not sell or otherwise transfer the Securities without registration under the Act or an exemption therefrom, and fully understands that he must bear the economic risks of his investment for an indefinite period of time because, among other reasons, the Securities have not been registered under the Act or under securities laws of any states and therefore cannot be resold, pledged, assigned or otherwise disposed of until subsequently registered under the Act and under the applicable securities laws of such states or an exemption from registration is available. Except as set forth herein, the undersigned understands that the Company is under no obligation to register the Securities on his behalf or to assist him in complying with any exemption from such registration under the Act. (f) If the undersigned is a company, partnership, trust, joint venture, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to make an investment in the Company, and the person signing this Agreement on behalf of such entity has been duly authorized by such entity to do so. (g) No representation of warranties have been made to the undersigned by the Company, an officer of the Company, or any other persons on behalf of such persons, other than as stated in this Agreement, and no oral or written information furnished to the undersigned or his advisor(s) in connection with the Offering was in any way inconsistent with the information stated in this Agreement or the Company Documents. (h) Any information which the undersigned has heretofore furnished the Company with respect to its financial position and business experience, including, without limitation, responses to the Investor Suitability Questionnaire, is correct and complete as of the date of this Agreement and if there should be any material change in such information prior to the acceptance of this Agreement by the Company it will immediately furnish such revised or corrected information to the Company. 2.2. Investor Awareness: Risk Factors. The undersigned acknowledges and fully understands the risks and uncertainties of an investment in the Securities. An investment in the Securities is subject to all the risks inherent in business in general and companies in businesses the same or similar to the business of the Company and the additional, unique risks listed below: (a) No federal or state agency has passed upon the Securities or made any findings or determination as to the fairness of an investment in the Securities. 4 (b) The undersigned should be fully aware of the long-term nature of his investment in the Company. The Securities are not readily transferable because the Securities have not been registered with the Securities and Exchange Commissions or the agencies of any state. Subscribers may not be able to liquidate their investment quickly and may be unable to find a buyer for the Securities on any reasonable terms. Each subscriber must purchase the Securities for his own account, for investment purposes only and not with a view toward resale or redistribution. Investors who need liquidity in their investment should not invest in the Securities. (c) The Articles of Incorporation and bylaws of the Company provide that the Company must indemnify the directors and officers of the Company against liabilities sustained by them by reason of their serving as directors or officers of the Company or its affiliates. (d) The success of the Company will be particularly dependent on the efforts of Curtis A. Swanson. (e) The Securities offered hereby have not been registered under the Act or any applicable state securities laws, and are being offered and sold in reliance of the exemptions from the registration of the Act (and any applicable state securities laws). The Securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Act and such laws pursuant to registration or exemption therefrom. The Company does not intend to register any of the Securities for resale under the Act (or any applicable state securities laws). Accordingly, no investor should purchase the Securities with funds which he may need to convert to cash in the foreseeable future. SECTION 3 3.1 Corporate Governance. The Company agrees that (a) upon ten (10) days notice from Investor subsequent to the closing of this Agreement; the Company will cause a single board seat to be made available to a nominee of Investor. The nominee of the majority of the Investor(s) to the board will be added to the vacant board seat within 10 days after nomination by investor and acceptance of nomination by nominee. The investor's nominee will then serve until the next annual meeting of the shareholders at which time Rule 14-A Proxy will be distributed to the shareholders of record of the Company for the election of the board of directors for the following year. At the option of the majority of the Investor(s) and acceptance by nominee this board member would serve as Chairman of the Board during the service period. In addition, the Company warrants and agrees that simultaneously with the closing of the transaction represented hereby that (b) the Board of Directors of the Company will take such action as is necessary to cause Larry Wilson, esq. to replace Carole A. Swanson as Secretary of the Corporation and (c) Stanley L. Swanson will resign as Chief Executive Officer of the Company and Curtis A. Swanson will assume dual roles as President / Chief Operating Officer and acting Chief Executive Officer. 5 3.2 No Convertibles. The Company represents to DCSP and Investors that upon closing of this transaction there will be no Preferred stock or Convertible Equity securities outstanding of any kind other than typical options and Warrants already disclosed to Investor(s), nor will the Company issue any such instruments in the future without the written consent of the majority of the Investor(s). 3.3 Representation of Stanley L. Swanson Conversion of Rights to Acquire Shares. Stanley L. Swanson agrees that upon the closing of this Agreement he will convert his existing rights granted May 6, 2002 as referenced in the Company's SEC filings under "Related Party Transactions" and through the date of this Agreement for accrued payroll / compensation into the 1,107,356 shares of Common Stock granted there under. 3.4 Representation of Curtis a. Swanson Conversion of Rights to Acquire Shares. Curtis A. Swanson agrees that upon the closing of this Agreement he will convert his existing rights granted May 6, 2002 as referenced in the Company's SEC filings under "Related Party Transactions" and through the date of this Agreement for accrued payroll / compensation into the 1,092,644 shares of Common Stock granted there under. SECTION 4 4.1. Indemnity: The undersigned hereby agrees to indemnify and hold harmless the Company, and each person, if any, who controls or is controlled by the Company, within the meaning of Section 15 of the Act, against all loss, liability, claim, damage, and expense whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any false representation or warranty or breach or failure by the undersigned to any of the foregoing in connection with this transaction. 4.2. Further Agreements: The undersigned agrees to execute and deliver such other documents and instruments as the Company shall reasonably request. 4.3 Modification: Neither this Agreement nor any provision hereof may be modified, discharged, or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. 4.4 Notices: Any notice, demand or other communication which any party hereto may be required, or may elect, to give to anyone interested hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United States mail letter box, registered or certified mail, return receipt requested, addressed to such address as may be given herein, or (b) delivered personally at such address. 4.5 Binding Effect: Except as otherwise provided herein, this Agreement shall be binding upon and inure to the parties and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the undersigned shall be joint and several, this Agreement and the representations, warranties and acknowledgements herein shall be deemed to be made by and be binding upon each such person and his heirs, executors, administrators and successors. 6 4.6 Entire Agreement: This Agreement contains the entire understanding of the parties with regard to the subject matter hereof and there are no representations, covenants or other agreements except as stated or referred herein. 4.7 Prohibitions on Cancellation: Assignability: The undersigned hereby acknowledges and agrees that, except as may be specifically provided herein, or by applicable law, the undersigned is not entitled to cancel, terminate or revoke this Agreement, and this Agreement shall survive his death or disability or any permitted assignment of his Securities. This Agreement is not transferable or assignable by the undersigned. 4.8 Applicable Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Texas applicable to contracts made and to be performed entirely within such state. 4.9 Gender: All pronouns contained herein and any variations thereof shall be deemed to refer to masculine, feminine, or neuter, singular or plural, as the identity of the parties hereto may require. 4.10 Counterparts: This Agreement may be executed through the use of separate signature pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one Agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart. 4.11 Reliance: The representations, warranties, agreements, undertakings and acknowledgements made by the undersigned in this Agreement are made with the intent that they be relied upon by the Company and the officers of the Company in determining the undersigned's suitability as a purchaser of the Securities, and shall survive the acceptance of this subscription by the company. [signatures on following page] 7 IN WITNESS WHEREOF, the undersigned has (have) executed this Subscription and Investment Representation Agreement on +30. $ --------------------------- --------------------------- (Purchase Payment) (No. of Units) If Subscriber is an Individual: ------------------------------- Signature If there is a Joint Subscriber (Each Joint Subscriber must complete an Investor Suitability Questionnaire) ------------------------------- Signature of Joint Subscriber If Subscriber is an Entity Name: ------------------------------- By: ------------------------------- Name: Title: Subscription accepted as of . ------------------------- RTIN HOLDINGS, INC. By: ------------------------------- Name: Title: 8 Exhibit A RTIN HOLDINGS, INC. (a Texas corporation) INVESTOR SUITABILITY QUESTIONNAIRE This questionnaire is required to ensure that the Offering of the Company's Securities complies with the rules and regulations of the Securities and Exchange Commission ("SEC") and applicable state securities commissions governing non-public offerings. Each investor or joint subscriber must complete an Investor Suitability Questionnaire. All information will be kept confidential. Part I 1. Name: ----------------------------------------------------------------------- (full legal name of individual, Company, trust, partnership or other entity) 2. Residence Address or Principal Business Address: --------------------------- (street and number) - -------------------------------------------------------------------------------- (city, state and zip code) (area code) (telephone number) 3. Type of Entity: ___ Individual ___ Partnership ___ Trust ___ Corporation ___ Estate ___ Limited Liability Company ___ Limited Partnership ___ Other Group 5. Other states where residence or business address is maintained: 6. Social Security Number or Employer EIN: ------------------------------------- 7. If subscriber is a company, partnership, trust or other entity, please attach a copy of the Articles of Incorporation, Bylaws, Partnership Agreement, Trust Instrument, or other documents showing: a. that the entity is authorized to make this investment, and b. that the individual(s) signing the Subscription and the Investment Representation Agreement are authorized to take such action on behalf of the entity. 9 Part II Please acknowledge that you are an accredited investor by placing your initials on the line(s) next to the descriptions that describe you ____ An individual whose net worth together with that of his spouse exceeds $1,000,000. ____ An individual who had individual income in excess of $200,000 in each of the two most recent years or joint income with that individual's spouse in excess of $300,000 in each of those years who reasonably expects to reach the same income level this year. ____ A bank as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual capacity or fiduciary capacity. ____ A broker or dealer registered pursuant to Section 15 of the Securities Act of 1934. ____ An insurance company as defined in Section 2(13) of the Securities Act. ____ An investment company registered under the Investment Company Act of 1940 or a business development company as defined under Section 2(a)(48) of that Act. ____ A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Act of 1958. ____ An employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974; if: a. The decision to invest in the Company is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor; or b. The plan has total assets in excess of $5,000,000; or c. The plan is a self-directed plan with investment decisions made solely by persons who are accredited investors. ____ A private business development company as defined as Section 202(a)(22) of the Investment Advisors Act of 1940. ____ A charitable organization described in Section 501(c)(3) of the Internal Revenue Code, Company, or similar business trust or partnership, not formed with the specific purpose of acquiring the securities, with total assets in excess of $5,000,000. 10 ____ A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act. ____ An entity in which all of the equity owners are accredited investors. PART III INVESTOR SOPHISTICATION Are you are a "sophisticated investor"? ___ YES ___ NO A subscriber may qualify as a sophisticated investor if he is a person who has such knowledge of finance, securities and investments generally, and such experience and skill in investments based on actual participation, as to be aware of and appreciate the risks of investing in the Company and the financial capacity such that an investment in the Company is not material when compared to his total financial capacity. Even though a person lacks the requisite knowledge or experience, he may be eligible to invest in the Company if he is represented by a representative with such knowledge and experience who has not business relationship with the Company and is compensated only by such investor. If you answered "yes", please provide a personal balance sheet and a description of your personal investments. If you are represented by a representative on whom you are relying to provide substantial knowledge and experience in connection with this purchase or investment please provide the following information: Name: Company Name: Address: Telephone: Qualifications: 11 PART IV SIGNATURE - -------------------------------------------------------------------------------- If Subscriber is an Individual or Joint Subscriber: - --------------------------- --------------------------------- Print Name Signature - -------------------------------------------------------------------------------- If Subscriber is an Entity By: - --------------------------- --------------------------------- Print Name of Entity Authorized Signatory - --------------------------- --------------------------------- Print Name of Title Authorized Signatory - -------------------------------------------------------------------------------- If Subscriber is Represented by an Investment Advisor: By: - --------------------------- --------------------------------- Print Name of Entity Authorized Signatory - --------------------------- --------------------------------- Print Name of Title Authorized Signatory - -------------------------------------------------------------------------------- 12 EX-4.3 6 rtin8kex43062703.txt FORM OF SERIES A WARRANT EXHIBIT 4.3 THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH OFFER, SALE, ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH THE APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT. RTIN HOLDINGS, INC. SERIES A 2003 WARRANT TO PURCHASE COMMON STOCK Warrant No.: SAW______________ Number of Shares: ______________ Date of Original Issuance: ______________, 2003 RTIN Holdings, Inc., a Texas corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, _________________________________, the registered holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after the Vesting Date (as defined below), but not after 11:59 P.M. Central Time on the Expiration Date (as defined herein) ________________________ (___________________) fully paid non-assessable shares of Common Stock (as defined herein) of the Company (the "Warrant Shares") at the purchase price as defined in Section 1(b)(xi)). Section 1. (a) Definitions. The following words and terms as used in this Warrant shall have the following meanings: (i) "Common Stock" means (i) the Company's common stock, par value $.01 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. (ii) "Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exchangeable for Common Stock. (iii) "Expiration Date" means the date three (3) years from the Vesting Date or, if such date falls on a Saturday, Sunday or other day on which banks are required or authorized to be closed in the State of Texas or on which trading does not take place on the principal exchange or automated quotation system on which the Common Stock is traded (a "Holiday"), the next date that is not a Holiday. (iv) "Options" means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. (v) "Other Securities" means those warrants of the Company issued prior to, and outstanding on, the date of issuance of this Warrant. (vi) "Person" means a natural person, a partnership, a corporation, a limited liability company, an association or a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental agency or any department, or agency or political subdivision thereof. (vii) "Securities Act" means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. (viii) "Vesting Date" means the date on which this Warrant becomes exercisable, if at all, as set forth in Section 9. (x) "Warrant" means this Warrant and all Warrants issued in exchange, transfer or replacement of any thereof. (ixi) "Warrant Exercise Price" means $1.50 per share, subject to adjustment as provided in Section 8. Section 2. Exercise of Warrant. (a) Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company, in whole or in part, at any time on any business day on or after the close of business on the Vesting Date and prior to 11:59 P.M. Central Time on the Expiration Date by (i) delivery of a written notice, in the form of the subscription notice attached as Exhibit A hereto (the "Exercise Notice"), of such holder's election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, (ii) (A) payment to the Company of an amount equal to the Warrant Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (plus any applicable issue or transfer taxes) (the "Aggregate Exercise Price") in cash or by check or wire transfer or (B) by notifying the Company that this Warrant is being exercised 2 pursuant to a Cashless Exercise (as defined in Section 2(e)), and (iii) the surrender to a common carrier for delivery to the Company as soon as practicable following such date, this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction); provided, that if such Warrant Shares are to be issued in any name other than that of the registered holder of this Warrant, such issuance shall be deemed a transfer and the provisions of Section 7 shall be applicable. In the event of any exercise of the rights represented by this Warrant in compliance with this Section 2(a), a certificate or certificates for the Warrant Shares so purchased, in such denominations as may be requested by the holder hereof and registered in the name of, or as directed by, the holder, shall be delivered at the Company's expense to, or as directed by, such holder as soon as practicable, and in no event later than two business days, after the Company's receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction). Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in Section 2(d), the holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of this Warrant as required by clause (iii) above or the certificates evidencing such Warrant Shares. (b) Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in no event later than five business days after any exercise and at its own expense, issue a new Warrant identical in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised. (c) No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock issued upon exercise of this Warrant shall be rounded up or down to the nearest whole number. (d) Notwithstanding anything contained herein to the contrary, the holder of this Warrant may, at its election exercised in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a "Cashless Exercise"): Net Number = (A x B) - (A x C) ----------------- B For purposes of the foregoing formula: 3 A= the total number shares with respect to which this Warrant is then being exercised. B= the last reported sale price (as reported by Bloomberg) of the Common Stock on the date immediately preceding the date of the Exercise Notice. C= the Warrant Exercise Price then in effect at the time of such exercise. Section 3. Covenants as to Common Stock. The Company hereby covenants and agrees as follows: (a) This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued. (b) All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. (c) During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price. (d) 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. (e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, 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 by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this 4 Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. The Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant. (f) This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. Section 4. Taxes. The Company shall pay any and all taxes which may be payable with respect to ----- the issuance and delivery of Warrant Shares upon exercise of this Warrant. Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. Section 6. Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further represents, by acceptance hereof, that, as of this date, such holder is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an "Accredited Investor"). Upon exercise of 5 this Warrant, the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder cannot make such representations because they would be factually incorrect, it shall be a condition to such holder's exercise of this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities laws. Section 7. Ownership and Transfer. (a) The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant. (b) This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed warrant power in the form of Exhibit B attached hereto; provided, however, that any transfer or assignment shall be subject to the conditions set forth in Section 7(c) below. (c) The holder of this Warrant understands that this Warrant has not been and is not expected to be, registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (a) subsequently registered thereunder, or (b) such holder shall have delivered to the Company an opinion of counsel, in generally acceptable form, to the effect that the securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration; provided that (i) any sale of such securities made in reliance on Rule 144 promulgated under the Securities Act may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder; and (ii) neither the Company nor any other person is under any obligation to register the Warrants under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Section 8. Adjustment of Warrant Exercise Price and Number of Shares. ---------------------------------------------------------- (a) The Warrant Exercise Price and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time as follows: 6 (i) Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Warrant Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Warrant Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately decreased. (ii) Adjustment for Common Stock Dividends and Distributions. If the Company at any time or from time to time after the date of issuance of this Warrant makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, in each such event the Warrant Exercise Price in effect immediately prior to such issuance or, in the event such record date is fixed as of the close of business on such record date will be proportionately decreased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date. (iii) Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the date of issuance of this Warrant, the Common Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than an acquisition, asset transfer, subdivision or combination of shares, stock dividend, reorganization, merger, consolidation, or sale of assets provided for elsewhere in this Section 8(a)), in any such event the holder hereof shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Common Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. (iv) Reorganizations, Mergers, Consolidations or Sales of Assets. If at any time or from time to time after the date of issuance of this Warrant, there is a capital reorganization of the Common Stock (other than an acquisition, asset transfer, recapitalization, or subdivision, combination, reclassification, exchange, or substitution of shares provided for elsewhere in this Section 8(a)), as a part of such capital reorganization, provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise hereof the number of shares of stock or other securities or property of the Company to which a holder of the number of shares of Common 7 Stock deliverable upon exercise immediately prior to such event would have been entitled as a result of such capital reorganization, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 8(a) with respect to the rights of the holder hereof after the capital reorganization to the end that the provisions of this Section 8 shall be applicable after that event and be as nearly equivalent as practical. (v) Sale of Common Stock Below Current Market Value. If at any time or from time to time on or after the date of issuance of this Warrant, the Company shall sell, issue or dispose of any shares of Common Stock at a price per share that is less than 95% of the Current Market Value thereof or shall issue or distribute any options, warrants, or other Convertible Securities providing for the issuance of Common Stock at a price per share less than 95% of the Current Market Value, the Warrant Exercise Price shall be proportionately decreased and the number of shares of Common Stock issuable upon exercise of this Warrant shall be proportionately increased as of the date of such offering. (vi) Rounding of Calculations; Minimum Adjustment. All calculations under this Section 8(a) shall be made to the nearest cent. Any provision of this Section 8 to the contrary notwithstanding, no adjustment in the Warrant Exercise Price shall be made if the amount of such adjustment would be less than one percent, but any such amount shall be carried forward and an 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 one percent or more. (vii) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 8(a) shall require that an adjustment shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event issuing to the holder of this Warrant after such record date and before the occurrence of such event the additional shares of Common Stock or other property issuable or deliverable upon exercise by reason of the adjustment required by such event over and above the shares of Common Stock or other property issuable or deliverable upon such exercise before giving effect to such adjustment; provided, however, that the Company upon request shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares or other property, and such cash, upon the occurrence of the event requiring such adjustment. (b) Statement Regarding Adjustments. Whenever the Warrant Exercise Price shall be adjusted as provided in Section 8(a), and upon each change in the number of shares of the Common Stock issuable upon exercise of this Warrant, the Company shall forthwith file, at the office of any transfer agent for this Warrant and at the principal office of the Company, a statement showing in detail the facts requiring such adjustment and the Warrant Exercise Price and new number of shares issuable that shall be in effect after such adjustment, and the Company shall also cause a copy of such statement to be given to the holder of this Warrant. Each such statement shall be signed by the Company's chief financial or accounting officer. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section 8(c). 8 (c) Notice to Holders. In the event the Company shall propose to take any action of the type described in clause (iii) or (iv) of Section 8(a), the Company shall give notice to the holder of this Warrant, in the manner set forth in Section 11, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Warrant Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action. (d) Current Market Price. The "Current Market Price" shall mean, as of any date, the average, for each of the 20 consecutive Trading Days immediately prior to such date, of either: (i) the high and low sales prices of the Common Stock on such Trading Day as reported on the composite tape for the principal national securities exchange on which the Common Stock may then be listed, or (ii) if the Common Stock shall not be so listed on any such Trading Day, the high and low sales prices of Common Stock in the over-the-counter market as reported by the Nasdaq Stock Market for National Market Securities, or (iii) if the Common Shares shall not be included in the Nasdaq Stock Market as a National Market Security on any such Trading Day, the representative bid and asked prices at the end of such Trading Day in such market as reported by the Nasdaq Stock Market or (iv) if there be no such representative prices reported by the Nasdaq Stock Market, the lowest bid and highest asked prices at the end of such Trading Day in the over-the-counter market as reported by the OTC Electronic Bulletin Board or National Quotation Bureau, Inc., or any successor organization. For purposes of determining Current Market Price, the term "Trading Day" shall mean a day on which an amount greater than zero can be calculated with respect to the Common Stock under any one or more of the foregoing categories (i), (ii), (iii) and (iv), and the "end" thereof, for the purposes of categories (iii) and (iv), shall mean the exact time at which trading shall end on the New York Stock Exchange. If the Current Market Price cannot be determined under any of the foregoing methods, Current Market Price shall mean the fair value per share of Common Stock on such date as determined by the Board of Directors in good faith, irrespective of any accounting treatment. (e) Treasury Stock. For the purposes of this Section 3.1, the sale or other disposition of any Common Stock of the Company theretofore held in its treasury shall be deemed to be an issuance thereof. Section 9. Vesting, Termination Without Vesting. This Warrant shall not be exercisable until the date (the "Vesting Date") on which the Company has completed an audit of the books and records as of December 31, 2002 and for the 9 twelve months then ended and received an opinion of Heard, McElroy & Vestal, LLP regarding the preparation of such financial statements, and shall be exercisable from and after the Vesting Date only with respect to the following percentage of the total Warrants represented hereby: Percentage of Total = ($4,497,058- A) - $400,000 x 100 -------------------------------- $500,000 Where:A = the consolidated net pre-tax earning of the Company for the 12 months ended December 31, 2002, as reported on the date hereof pursuant to the audit performed by Heard, McElroy & Vestal LLP In Example: If the audited consolidated net pre-tax earnings of the Company for the 12 months ended December 31, 2002, were adjusted to $3,997,059 the warrants shall be exercisable as follows: Percentage of Total = ($4,497,058-$3,997,059)-400,000 x 100 = 19.99% of the Warrants issued hereunder $500,000 Provided, however, that in no event shall the percentage of the total pursuant to the forgoing formula exceed 100%. Any Warrants that do not vest as set forth in this Section on the Vesting Date shall be deemed to be void and of no further force or effect. Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt of an indemnification undertaking, issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Section 11. Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 10 If to the Company: RTIN Holdings, Inc. 3218 Page Rd. Longview, Texas 75605 Telephone: 903-295-6800 Facsimile: 903-234-9777 Attention: Curtis A. Swanson If to the holder of this Warrant: at the address on the books and records of the Company. or to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by prior written notice given to each other party five days prior to the effective date of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively. Section 12. Amendments. This Warrant and any term hereof may be changed, waived, discharged, or terminated only by an instrument in writing signed by the party or holder hereof against which enforcement of such change, waiver, discharge or termination is sought. Section 13. Limitation on Number of Warrant Shares. The Company shall not be obligated to issue any Warrant Shares upon exercise of this Warrant if the issuance of such shares of Common Stock would cause the Company to exceed that number of shares of Common Stock which the Company may issue upon exercise of this Warrant (the "Exchange Cap") without breaching the Company's obligations under the rules or regulations of Principal Market, except that such limitation shall not apply in the event that the Company obtains the approval of its stockholders as required by the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount. In the event the Company is prohibited from issuing Warrant Shares as a result of the operation of this Section 13, the Company shall redeem for cash those Warrant Shares which can not be issued, at a price equal to the difference between the Market Price and the Exercise Price of such Warrant Shares as of the date of the attempted exercise. Section 14. Date. This Warrant, in all events, shall be wholly void and of no effect after 11:59 PM Central Time on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of Section 7 shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise of this Warrant. 11 Section 15. Amendment and Waiver. The provisions of this Warrant may only be amended upon a written instrument executed by the Company and the holders hereof. Section 16. Descriptive Headings; Governing Law. The descriptive headings of the several Sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of Texas shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal laws of the State of Texas, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Texas or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Texas. Section 17. Successors and Assigns. This Warrant shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of this Warrant. The Company shall not assign this Warrant or any rights or obligations hereunder without the prior written consent of the holder of this Warrant, including by merger, consolidation or reorganization. The holder of this Warrant may assign some or all of its rights hereunder to (i) without the consent of the Company, any person or entity who, immediately prior to such assignment, is an affiliate of such holder (a "Permitted Assignee") and (ii) with the prior written consent of the Company, which consent shall not be unreasonably withheld, to any person or entity which is not a Permitted Assignee; provided, however, that any such assignment shall not release the holder of this Warrant from its obligations hereunder unless such obligations are assumed by such assignee and the Company has consented to such assignment and assumption, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, the holder of this Warrant shall be entitled to pledge the this Warrant and the shares of Common Stock issuable upon exercise of this Warrant in connection with a bona fide margin account. RTIN HOLDINGS, INC. By: ---------------------------------------------- Name: Curtis A. Swanson Title: President 12 EXHIBIT A TO WARRANT -------------------- SUBSCRIPTION FORM TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT RTIN HOLDINGS, INC. The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of RTIN Holdings, Inc., a Texas corporation (the "Company"), evidenced by the attached Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 1. Form of Warrant Exercise Price. The Holder intends that payment of the Warrant Exercise Price shall be made as: ____________ a CASH EXERCISE with respect to _______________________ Warrant Shares; and/or ____________ a CASH EXERCISE with respect to _______________________ Warrant Shares (to the extent permitted by the terms of the Warrant). 2. Payment of Warrant Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the sum of $___________________ to the Company in accordance with the terms of the Warrant. 3. Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. Dated: _________, ____ Printed Name: ___________________________________ By: ___________________________________ Name: Title: 13 EXHIBIT B TO WARRANT FORM OF WARRANT POWER FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant to purchase ____________ shares of the capital stock of RTIN Holdings, Inc., a Texas corporation, represented by warrant certificate no. _____, standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint ______________, attorney to transfer the warrants of said corporation, with full power of substitution in the premises. Dated: _________, ____ Name: ____________________________________ By: ________________________________ 14 EX-4.4 7 rtin8kex440622703.txt FORM OF SERIES B WARRANT THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH OFFER, SALE, ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH THE APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT. RTIN HOLDINGS, INC. SERIES B 2003 WARRANT TO PURCHASE COMMON STOCK Warrant No.: SAW______________ Number of Shares: ______________ Date of Original Issuance: ______________, 2003 RTIN Holdings, Inc., a Texas corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, _________________________________, the registered holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after the Vesting Date (as defined below), but not after 11:59 P.M. Central Time on the Expiration Date (as defined herein) ________________________ (___________________) fully paid non-assessable shares of Common Stock (as defined herein) of the Company (the "Warrant Shares") at the purchase price as defined in Section 1(b)(xi)). Section 1. (a) Definitions. The following words and terms as used in this Warrant shall have the following meanings: (i) "Common Stock" means (i) the Company's common stock, par value $.01 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. (ii) "Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exchangeable for Common Stock. (iii) "Expiration Date" means the date three (3) years from the Vesting Date or, if such date falls on a Saturday, Sunday or other day on which banks are required or authorized to be closed in the State of Texas or on which trading does not take place on the principal exchange or automated quotation system on which the Common Stock is traded (a "Holiday"), the next date that is not a Holiday. (iv) "Options" means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. (v) "Other Securities" means those warrants of the Company issued prior to, and outstanding on, the date of issuance of this Warrant. (vi) "Person" means a natural person, a partnership, a corporation, a limited liability company, an association or a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental agency or any department, or agency or political subdivision thereof. (vii) "Securities Act" means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. (viii) "Vesting Date" means the date on which this Warrant becomes exercisable, if at all, as set forth in Section 9. (x) "Warrant" means this Warrant and all Warrants issued in exchange, transfer or replacement of any thereof. (ixi) "Warrant Exercise Price" means $1.50 per share, subject to adjustment as provided in Section 8. Section 2. Exercise of Warrant. (a) Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company, in whole or in part, at any time on any business day on or after the close of business on the Vesting Date and prior to 11:59 P.M. Central Time on the Expiration Date by (i) delivery of a written notice, in the form of the subscription notice attached as Exhibit A hereto (the "Exercise Notice"), of such holder's election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, (ii) (A) payment to the Company of an amount equal to the Warrant Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (plus any applicable issue or transfer taxes) (the "Aggregate Exercise Price") in cash or by check or wire 2 transfer or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 2(e)), and (iii) the surrender to a common carrier for delivery to the Company as soon as practicable following such date, this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction); provided, that if such Warrant Shares are to be issued in any name other than that of the registered holder of this Warrant, such issuance shall be deemed a transfer and the provisions of Section 7 shall be applicable. In the event of any exercise of the rights represented by this Warrant in compliance with this Section 2(a), a certificate or certificates for the Warrant Shares so purchased, in such denominations as may be requested by the holder hereof and registered in the name of, or as directed by, the holder, shall be delivered at the Company's expense to, or as directed by, such holder as soon as practicable, and in no event later than two business days, after the Company's receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction). Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in Section 2(d), the holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of this Warrant as required by clause (iii) above or the certificates evidencing such Warrant Shares. (b) Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in no event later than five business days after any exercise and at its own expense, issue a new Warrant identical in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised. (c) No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock issued upon exercise of this Warrant shall be rounded up or down to the nearest whole number. (d) Notwithstanding anything contained herein to the contrary, the holder of this Warrant may, at its election exercised in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a "Cashless Exercise"): Net Number = (A x B) - (A x C) ----------------- B For purposes of the foregoing formula: 3 A= the total number shares with respect to which this Warrant is then being exercised. B= the last reported sale price (as reported by Bloomberg) of the Common Stock on the date immediately preceding the date of the Exercise Notice. C= the Warrant Exercise Price then in effect at the time of such exercise. Section 3. Covenants as to Common Stock. The Company hereby covenants and agrees as follows: (a) This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued. (b) All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. (c) During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price. (d) 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. (e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, 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 by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this 4 Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of this Warrant. The Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant. (f) This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. Section 4. Taxes. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. Section 6. Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further represents, by acceptance hereof, that, as of this date, such holder is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an "Accredited Investor"). Upon exercise of 5 this Warrant, the holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder cannot make such representations because they would be factually incorrect, it shall be a condition to such holder's exercise of this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities laws. Section 7. Ownership and Transfer. (a) The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant. (b) This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed warrant power in the form of Exhibit B attached hereto; provided, however, that any transfer or assignment shall be subject to the conditions set forth in Section 7(c) below. (c) The holder of this Warrant understands that this Warrant has not been and is not expected to be, registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (a) subsequently registered thereunder, or (b) such holder shall have delivered to the Company an opinion of counsel, in generally acceptable form, to the effect that the securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration; provided that (i) any sale of such securities made in reliance on Rule 144 promulgated under the Securities Act may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder; and (ii) neither the Company nor any other person is under any obligation to register the Warrants under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Section 8. Adjustment of Warrant Exercise Price and Number of Shares. (a) The Warrant Exercise Price and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time as follows: 6 (i) Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Warrant Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Warrant Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately decreased. (ii) Adjustment for Common Stock Dividends and Distributions. If the Company at any time or from time to time after the date of issuance of this Warrant makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, in each such event the Warrant Exercise Price in effect immediately prior to such issuance or, in the event such record date is fixed as of the close of business on such record date will be proportionately decreased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date. (iii) Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the date of issuance of this Warrant, the Common Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than an acquisition, asset transfer, subdivision or combination of shares, stock dividend, reorganization, merger, consolidation, or sale of assets provided for elsewhere in this Section 8(a)), in any such event the holder hereof shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Common Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. (iv) Reorganizations, Mergers, Consolidations or Sales of Assets. If at any time or from time to time after the date of issuance of this Warrant, there is a capital reorganization of the Common Stock (other than an acquisition, asset transfer, recapitalization, or subdivision, combination, reclassification, exchange, or substitution of shares provided for elsewhere in this Section 8(a)), as a part of such capital reorganization, provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise hereof the number of shares of stock or other securities or property of the Company to which a holder of the number of shares of Common Stock deliverable upon exercise immediately prior to such event would 7 have been entitled as a result of such capital reorganization, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 8(a) with respect to the rights of the holder hereof after the capital reorganization to the end that the provisions of this Section 8 shall be applicable after that event and be as nearly equivalent as practical. (v) Sale of Common Stock Below Current Market Value. If at any time or from time to time on or after the date of issuance of this Warrant, the Company shall sell, issue or dispose of any shares of Common Stock at a price per share that is less than 95% of the Current Market Value thereof or shall issue or distribute any options, warrants, or other Convertible Securities providing for the issuance of Common Stock at a price per share less than 95% of the Current Market Value, the Warrant Exercise Price shall be proportionately decreased and the number of shares of Common Stock issuable upon exercise of this Warrant shall be proportionately increased as of the date of such offering. (vi) Rounding of Calculations; Minimum Adjustment. All calculations under this Section 8(a) shall be made to the nearest cent. Any provision of this Section 8 to the contrary notwithstanding, no adjustment in the Warrant Exercise Price shall be made if the amount of such adjustment would be less than one percent, but any such amount shall be carried forward and an 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 one percent or more. (vii) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 8(a) shall require that an adjustment shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event issuing to the holder of this Warrant after such record date and before the occurrence of such event the additional shares of Common Stock or other property issuable or deliverable upon exercise by reason of the adjustment required by such event over and above the shares of Common Stock or other property issuable or deliverable upon such exercise before giving effect to such adjustment; provided, however, that the Company upon request shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares or other property, and such cash, upon the occurrence of the event requiring such adjustment. (b) Statement Regarding Adjustments. Whenever the Warrant Exercise Price shall be adjusted as provided in Section 8(a), and upon each change in the number of shares of the Common Stock issuable upon exercise of this Warrant, the Company shall forthwith file, at the office of any transfer agent for this Warrant and at the principal office of the Company, a statement showing in detail the facts requiring such adjustment and the Warrant Exercise Price and new number of shares issuable that shall be in effect after such 8 adjustment, and the Company shall also cause a copy of such statement to be given to the holder of this Warrant. Each such statement shall be signed by the Company's chief financial or accounting officer. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section 8(c). (c) Notice to Holders. In the event the Company shall propose to take any action of the type described in clause (iii) or (iv) of Section 8(a), the Company shall give notice to the holder of this Warrant, in the manner set forth in Section 11, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Warrant Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action. (d) Current Market Price. The "Current Market Price" shall mean, as of any date, the average, for each of the 20 consecutive Trading Days immediately prior to such date, of either: (i) the high and low sales prices of the Common Stock on such Trading Day as reported on the composite tape for the principal national securities exchange on which the Common Stock may then be listed, or (ii) if the Common Stock shall not be so listed on any such Trading Day, the high and low sales prices of Common Stock in the over-the-counter market as reported by the Nasdaq Stock Market for National Market Securities, or (iii) if the Common Shares shall not be included in the Nasdaq Stock Market as a National Market Security on any such Trading Day, the representative bid and asked prices at the end of such Trading Day in such market as reported by the Nasdaq Stock Market or (iv) if there be no such representative prices reported by the Nasdaq Stock Market, the lowest bid and highest asked prices at the end of such Trading Day in the over-the-counter market as reported by the OTC Electronic Bulletin Board or National Quotation Bureau, Inc., or any successor organization. For purposes of determining Current Market Price, the term "Trading Day" shall mean a day on which an amount greater than zero can be calculated with respect to the Common Stock under any one or more of the foregoing categories (i), (ii), (iii) and (iv), and the "end" thereof, for the purposes of categories (iii) and (iv), shall mean the exact time at which trading shall end on the New York Stock Exchange. If the Current Market Price cannot be determined under any of the foregoing methods, Current Market Price shall mean the fair value per share of Common Stock on such date as determined by the Board of Directors in good faith, irrespective of any accounting treatment. (e) Treasury Stock. For the purposes of this Section 3.1, the sale or other disposition of any Common Stock of the Company theretofore held in its treasury shall be deemed to be an issuance thereof. Section 9. Vesting, Termination Without Vesting. This Warrant shall not be exercisable until the day (the "Vesting Date") following the date on which the Company files with the Securities and Exchange Commission an amended annual report on Form 10-KSB for the year ended December 31, 2002 with an audit report by Heard, McElroy & Vestal, LLP for the for the year ended December 31, 2001 and the period then ended, and shall be exercisable from and after the Vesting Date only with respect to the following percentage of the total Warrants represented hereby: 9 Percentage of Total = Number of complete weeks after June 30, 2003 Vesting Date occurs x 100 - ---------------------------------------------------------------- 5 In Example: If the Company files with the Securities and Exchange Commission an amended annual report on Form 10-KSB for the year ended December 31, 2002 with an audit report by Heard, McElroy & Vestal, LLP for the year ended December 31, 2001 on July 14, 2003, the warrants exercisable shall be computed as follows: Percentage of Total = 2 x 100 = 40.00% of the Warrants issued hereunder. --------- 5 Provided, however, that in no event shall the percentage of the total pursuant to the forgoing formula exceed 100%. Any Warrants that do not vest as set forth in this Section on the Vesting Date shall be deemed to be void and of no further force or effect. Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt of an indemnification undertaking, issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Section 11. Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 10 If to the Company: RTIN Holdings, Inc. 3218 Page Rd. Longview, Texas 75605 Telephone: 903-295-6800 Facsimile: 903-234-9777 Attention: Curtis A. Swanson If to the holder of this Warrant: at the address on the books and records of the Company. or to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by prior written notice given to each other party five days prior to the effective date of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively. Section 12. Amendments. This Warrant and any term hereof may be changed, waived, discharged, or terminated only by an instrument in writing signed by the party or holder hereof against which enforcement of such change, waiver, discharge or termination is sought. Section 13. Limitation on Number of Warrant Shares. The Company shall not be obligated to issue any Warrant Shares upon exercise of this Warrant if the issuance of such shares of Common Stock would cause the Company to exceed that number of shares of Common Stock which the Company may issue upon exercise of this Warrant (the "Exchange Cap") without breaching the Company's obligations under the rules or regulations of Principal Market, except that such limitation shall not apply in the event that the Company obtains the approval of its stockholders as required by the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount. In the event the Company is prohibited from issuing Warrant Shares as a result of the operation of this Section 13, the Company shall redeem for cash those Warrant Shares which can not be issued, at a price equal to the difference between the Market Price and the Exercise Price of such Warrant Shares as of the date of the attempted exercise. Section 14. Date. This Warrant, in all events, shall be wholly void and of no effect after 11:59 PM Central Time on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of Section 7 shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise of this Warrant. 11 Section 15. Amendment and Waiver. The provisions of this Warrant may only be amended upon a written instrument executed by the Company and the holders hereof. Section 16. Descriptive Headings; Governing Law. The descriptive headings of the several Sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of Texas shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal laws of the State of Texas, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Texas or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Texas. Section 17. Successors and Assigns. This Warrant shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of this Warrant. The Company shall not assign this Warrant or any rights or obligations hereunder without the prior written consent of the holder of this Warrant, including by merger, consolidation or reorganization. The holder of this Warrant may assign some or all of its rights hereunder to (i) without the consent of the Company, any person or entity who, immediately prior to such assignment, is an affiliate of such holder (a "Permitted Assignee") and (ii) with the prior written consent of the Company, which consent shall not be unreasonably withheld, to any person or entity which is not a Permitted Assignee; provided, however, that any such assignment shall not release the holder of this Warrant from its obligations hereunder unless such obligations are assumed by such assignee and the Company has consented to such assignment and assumption, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, the holder of this Warrant shall be entitled to pledge the this Warrant and the shares of Common Stock issuable upon exercise of this Warrant in connection with a bona fide margin account. RTIN HOLDINGS, INC. By: ---------------------------------------------- Name: Curtis A. Swanson Title: President 12 EXHIBIT A TO WARRANT -------------------- SUBSCRIPTION FORM TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT RTIN HOLDINGS, INC. The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of RTIN Holdings, Inc., a Texas corporation (the "Company"), evidenced by the attached Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 1. Form of Warrant Exercise Price. The Holder intends that payment of the Warrant Exercise Price shall be made as: __________ a CASH EXERCISE with respect to _______________________ Warrant Shares; and/or __________ a CASHLESS EXERCISE with respect to ___________________ Warrant Shares (to the extent permitted by the terms of the Warrant). 2. Payment of Warrant Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the sum of $___________________ to the Company in accordance with the terms of the Warrant. 3. Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. Date: _______________ __, ______ Printed Name: ___________________________________ By: ___________________________________ Name: Title: 13 EXHIBIT B TO WARRANT FORM OF WARRANT POWER FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant to purchase ____________ shares of the capital stock of RTIN Holdings, Inc., a Texas corporation, represented by warrant certificate no. _____, standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint ______________, attorney to transfer the warrants of said corporation, with full power of substitution in the premises. Dated: _________, ____ Name: ____________________________________ By: ________________________________ 14 EX-4.5 8 rtin8kex45062703.txt FORM OF SERIES C. WARRANT EXHIBIT 4.5 THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH OFFER, SALE, ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH THE APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT. RTIN HOLDINGS, INC. SERIES C 2003 WARRANT TO PURCHASE COMMON STOCK Warrant No.: SAW______________ Number of Shares: ______________ Date of Original Issuance: ______________, 2003 RTIN Holdings, Inc., a Texas corporation (the "Company"), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, _________________________________, the registered holder hereof or its permitted assigns, is entitled, subject to the terms set forth below, to purchase from the Company upon surrender of this Warrant, at any time or times on or after the Vesting Date (as defined below), but not after 11:59 P.M. Central Time on the Expiration Date (as defined herein) ________________________ (___________________) fully paid non-assessable shares of Common Stock (as defined herein) of the Company (the "Warrant Shares") at the purchase price as defined in Section 1(b)(xi)). Section 1. (a) Definitions. The following words and terms as used in this Warrant shall have the following meanings: (i) "Common Stock" means (i) the Company's common stock, par value $.01 per share, and (ii) any capital stock into which such Common Stock shall have been changed or any capital stock resulting from a reclassification of such Common Stock. (ii) "Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exchangeable for Common Stock. (iii) "Expiration Date" means the date three (3) years from the Vesting Date or, if such date falls on a Saturday, Sunday or other day on which banks are required or authorized to be closed in the State of Texas or on which trading does not take place on the principal exchange or automated quotation system on which the Common Stock is traded (a "Holiday"), the next date that is not a Holiday. (iv) "Options" means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities. (v) "Other Securities" means those warrants of the Company issued prior to, and outstanding on, the date of issuance of this Warrant. (vi) "Person" means a natural person, a partnership, a corporation, a limited liability company, an association or a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental agency or any department, or agency or political subdivision thereof. (vii) "Securities Act" means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. (viii) "Vesting Date" means the date on which this Warrant becomes exercisable, if at all, as set forth in Section 9. (x) "Warrant" means this Warrant and all Warrants issued in exchange, transfer or replacement of any thereof. (ixi) "Warrant Exercise Price" means $1.50 per share, subject to adjustment as provided in Section 8. Section 2. Exercise of Warrant. (a) Subject to the terms and conditions hereof, this Warrant may be exercised by the holder hereof then registered on the books of the Company, in whole or in part, at any time on any business day on or after the close of business on the Vesting Date and prior to 11:59 P.M. Central Time on the Expiration Date by (i) delivery of a written notice, in the form of the subscription notice attached as Exhibit A hereto (the "Exercise Notice"), of such holder's election to exercise this Warrant, which notice shall specify the number of Warrant Shares to be purchased, (ii) (A) payment to the Company of an amount equal to the Warrant Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (plus any applicable issue or transfer taxes) (the "Aggregate Exercise Price") in cash or by check or wire 2 transfer or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 2(e)), and (iii) the surrender to a common carrier for delivery to the Company as soon as practicable following such date, this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction); provided, that if such Warrant Shares are to be issued in any name other than that of the registered holder of this Warrant, such issuance shall be deemed a transfer and the provisions of Section 7 shall be applicable. In the event of any exercise of the rights represented by this Warrant in compliance with this Section 2(a), a certificate or certificates for the Warrant Shares so purchased, in such denominations as may be requested by the holder hereof and registered in the name of, or as directed by, the holder, shall be delivered at the Company's expense to, or as directed by, such holder as soon as practicable, and in no event later than two business days, after the Company's receipt of the Exercise Notice, the Aggregate Exercise Price and this Warrant (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction). Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in Section 2(d), the holder of this Warrant shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of this Warrant as required by clause (iii) above or the certificates evidencing such Warrant Shares. (b) Unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in no event later than five business days after any exercise and at its own expense, issue a new Warrant identical in all respects to this Warrant exercised except it shall represent rights to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant exercised, less the number of Warrant Shares with respect to which such Warrant is exercised. (c) No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock issued upon exercise of this Warrant shall be rounded up or down to the nearest whole number. (d) Notwithstanding anything contained herein to the contrary, the holder of this Warrant may, at its election exercised in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a "Cashless Exercise"): Net Number = (A x B) - (A x C) ----------------- B For purposes of the foregoing formula: 3 A= the total number shares with respect to which this Warrant is then being exercised. B= the last reported sale price (as reported by Bloomberg) of the Common Stock on the date immediately preceding the date of the Exercise Notice. C= the Warrant Exercise Price then in effect at the time of such exercise. Section 3. Covenants as to Common Stock. The Company hereby covenants and agrees as follows: (a) This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued. (b) All Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof. (c) During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved at least 100% of the number of shares of Common Stock needed to provide for the exercise of the rights then represented by this Warrant and the par value of said shares will at all times be less than or equal to the applicable Warrant Exercise Price. (d) 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. (e) The Company will not, by amendment of its Articles of Incorporation or through any reorganization, 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 by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the holder of this Warrant in order to protect the exercise privilege of the holder of this Warrant against dilution or other impairment, consistent with the tenor and purpose of 4 this Warrant. The Company (i) will not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Warrant Exercise Price then in effect, and (ii) will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant. (f) This Warrant will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. Section 4. Taxes. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise specifically provided herein, no holder, as such, of this Warrant shall be entitled to vote or receive dividends or be deemed the holder of shares of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the holder of this Warrant of the Warrant Shares which he or she is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on such holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 5, the Company will provide the holder of this Warrant with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders. Section 6. Representations of Holder. The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant and the Warrant Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations herein, the holder does not agree to hold this Warrant or any of the Warrant Shares for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The holder of this Warrant further represents, by acceptance hereof, that, as of this date, such holder is an "accredited investor" as such term is defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an "Accredited Investor"). Upon exercise of this Warrant, the holder shall, if requested by the Company, confirm in writing, 5 in a form satisfactory to the Company, that the Warrant Shares so purchased are being acquired solely for the holder's own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale and that such holder is an Accredited Investor. If such holder cannot make such representations because they would be factually incorrect, it shall be a condition to such holder's exercise of this Warrant that the Company receive such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities laws. Section 7. Ownership and Transfer. (a) The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant. (b) This Warrant and the rights granted to the holder hereof are transferable, in whole or in part, upon surrender of this Warrant, together with a properly executed warrant power in the form of Exhibit B attached hereto; provided, however, that any transfer or assignment shall be subject to the conditions set forth in Section 7(c) below. (c) The holder of this Warrant understands that this Warrant has not been and is not expected to be, registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (a) subsequently registered thereunder, or (b) such holder shall have delivered to the Company an opinion of counsel, in generally acceptable form, to the effect that the securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration; provided that (i) any sale of such securities made in reliance on Rule 144 promulgated under the Securities Act may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder; and (ii) neither the Company nor any other person is under any obligation to register the Warrants under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. Section 8. Adjustment of Warrant Exercise Price and Number of Shares. (a) The Warrant Exercise Price and the number of shares of Common Stock issuable upon exercise of this Warrant shall be adjusted from time to time as follows: 6 (i) Adjustment of Warrant Exercise Price upon Subdivision or Combination of Common Stock. If the Company at any time after the date of issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Warrant Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased. If the Company at any time after the date of issuance of this Warrant combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Warrant Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately decreased. (ii) Adjustment for Common Stock Dividends and Distributions. If the Company at any time or from time to time after the date of issuance of this Warrant makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, in each such event the Warrant Exercise Price in effect immediately prior to such issuance or, in the event such record date is fixed as of the close of business on such record date will be proportionately decreased and the number of shares of Common Stock obtainable upon exercise of this Warrant will be proportionately increased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date. (iii) Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the date of issuance of this Warrant, the Common Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than an acquisition, asset transfer, subdivision or combination of shares, stock dividend, reorganization, merger, consolidation, or sale of assets provided for elsewhere in this Section 8(a)), in any such event the holder hereof shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Common Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. (iv) Reorganizations, Mergers, Consolidations or Sales of Assets. If at any time or from time to time after the date of issuance of this Warrant, there is a capital reorganization of the Common Stock (other than an acquisition, asset transfer, recapitalization, or subdivision, combination, reclassification, exchange, or substitution of shares provided for elsewhere in this Section 8(a)), as a part of such capital reorganization, provision shall be made so that the holder of this Warrant shall thereafter be entitled to receive upon exercise hereof the number of shares of stock or other 7 securities or property of the Company to which a holder of the number of shares of Common Stock deliverable upon exercise immediately prior to such event would have been entitled as a result of such capital reorganization, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 8(a) with respect to the rights of the holder hereof after the capital reorganization to the end that the provisions of this Section 8 shall be applicable after that event and be as nearly equivalent as practical. (v) Sale of Common Stock Below Current Market Value. If at any time or from time to time on or after the date of issuance of this Warrant, the Company shall sell, issue or dispose of any shares of Common Stock at a price per share that is less than 95% of the Current Market Value thereof or shall issue or distribute any options, warrants, or other Convertible Securities providing for the issuance of Common Stock at a price per share less than 95% of the Current Market Value, the Warrant Exercise Price shall be proportionately decreased and the number of shares of Common Stock issuable upon exercise of this Warrant shall be proportionately increased as of the date of such offering. (vi) Special Adjustment for 2003 Pre-tax Earnings. The Warrant Exercise Price shall be decreased by $.05 per share for each $100,000 that the consolidated net pre-tax earnings of the Company for the 12 months ending December 31, 2003, after elimination of all revenue from the sale of market territories and all nonrecurring income, is less than $4,800,000; provided, however, that in no event shall the Warrant Exercise Price be reduced below $.50 per share (as adjusted pursuant to the other subparagraphs of this Section 8) as a result of this subparagraph. (vii) Rounding of Calculations; Minimum Adjustment. All calculations under this Section 8(a) shall be made to the nearest cent. Any provision of this Section 8 to the contrary notwithstanding, no adjustment in the Warrant Exercise Price shall be made if the amount of such adjustment would be less than one percent, but any such amount shall be carried forward and an 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 one percent or more. (viii) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 8(a) shall require that an adjustment shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event issuing to the holder of this Warrant after such record date and before the occurrence of such event the additional shares of Common Stock or other property issuable or deliverable upon exercise by reason of the adjustment required by such event over and above the shares of Common Stock or other property issuable or deliverable upon such exercise before giving effect to such adjustment; provided, however, that the Company upon request shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares or other property, and such cash, upon the occurrence of the event requiring such adjustment. 8 (b) Statement Regarding Adjustments. Whenever the Warrant Exercise Price shall be adjusted as provided in Section 8(a), and upon each change in the number of shares of the Common Stock issuable upon exercise of this Warrant, the Company shall forthwith file, at the office of any transfer agent for this Warrant and at the principal office of the Company, a statement showing in detail the facts requiring such adjustment and the Warrant Exercise Price and new number of shares issuable that shall be in effect after such adjustment, and the Company shall also cause a copy of such statement to be given to the holder of this Warrant. Each such statement shall be signed by the Company's chief financial or accounting officer. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section 8(c). (c) Notice to Holders. In the event the Company shall propose to take any action of the type described in clause (iii) or (iv) of Section 8(a), the Company shall give notice to the holder of this Warrant, in the manner set forth in Section 11, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Warrant Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action. (d) Current Market Price. The "Current Market Price" shall mean, as of any date, the average, for each of the 20 consecutive Trading Days immediately prior to such date, of either: (i) the high and low sales prices of the Common Stock on such Trading Day as reported on the composite tape for the principal national securities exchange on which the Common Stock may then be listed, or (ii) if the Common Stock shall not be so listed on any such Trading Day, the high and low sales prices of Common Stock in the over-the-counter market as reported by the Nasdaq Stock Market for National Market Securities, or (iii) if the Common Shares shall not be included in the Nasdaq Stock Market as a National Market Security on any such Trading Day, the representative bid and asked prices at the end of such Trading Day in such market as reported by the Nasdaq Stock Market or (iv) if there be no such representative prices reported by the Nasdaq Stock Market, the lowest bid and highest asked prices at the end of such Trading Day in the over-the-counter market as reported by the OTC Electronic Bulletin Board or National Quotation Bureau, Inc., or any successor organization. For purposes of determining Current Market Price, the term "Trading Day" shall mean a day on which an amount greater than zero can be calculated with respect to the Common Stock under any one or more of the foregoing categories (i), (ii), (iii) and (iv), and the "end" thereof, for the purposes of categories (iii) and (iv), shall mean the exact time at which trading shall end on the New York Stock Exchange. If the Current Market Price 9 cannot be determined under any of the foregoing methods, Current Market Price shall mean the fair value per share of Common Stock on such date as determined by the Board of Directors in good faith, irrespective of any accounting treatment. (e) Treasury Stock. For the purposes of this Section 3.1, the sale or other disposition of any Common Stock of the Company theretofore held in its treasury shall be deemed to be an issuance thereof. Section 9. Vesting, Termination Without Vesting. This Warrant shall not be exercisable until the date (the "Vesting Date") on which the Company files its annual report on Form 10-KSB for the fiscal year ending December 31, 2003, and shall be exercisable from and after the Vesting Date only with respect to the following percentage of the total Warrants represented hereby: Percentage of Total = $4,800,000 - A x 100 -------------- $2,500,000 Where A = consolidated net pre-tax earnings of the Company for the 12 months ending December 31, 2003 after elimination of all revenue from the sale of market territories and all nonrecurring income. In Example: Should the consolidated net pre-tax earnings of the Company for the 12 months ended December 31, 2003, be reported as $4,000,000 the exercisable warrants shall be computed as follows: Percentage of Total = $4,800,000-$4,000,000 x 100 = 32.00% of the Warrants issued hereunder ----------------------------- $2,500,000 Provided, however, that in no event shall the percentage of the total pursuant to the forgoing formula exceed 100%. Any Warrants that do not vest as set forth in this Section on the Vesting Date shall be deemed to be void and of no further force or effect. Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company shall, on receipt of an indemnification undertaking, issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed. Section 11. Notice. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 10 If to the Company: RTIN Holdings, Inc. 3218 Page Rd. Longview, Texas 75605 Telephone: 903-295-6800 Facsimile: 903-234-9777 Attention: Curtis A. Swanson If to the holder of this Warrant: at the address on the books and records of the Company. or to such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by prior written notice given to each other party five days prior to the effective date of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively. Section 12. Amendments. This Warrant and any term hereof may be changed, waived, discharged, or terminated only by an instrument in writing signed by the party or holder hereof against which enforcement of such change, waiver, discharge or termination is sought. Section 13. Limitation on Number of Warrant Shares. The Company shall not be obligated to issue any Warrant Shares upon exercise of this Warrant if the issuance of such shares of Common Stock would cause the Company to exceed that number of shares of Common Stock which the Company may issue upon exercise of this Warrant (the "Exchange Cap") without breaching the Company's obligations under the rules or regulations of Principal Market, except that such limitation shall not apply in the event that the Company obtains the approval of its stockholders as required by the Principal Market (or any successor rule or regulation) for issuances of Common Stock in excess of such amount. In the event the Company is prohibited from issuing Warrant Shares as a result of the operation of this Section 13, the Company shall redeem for cash those Warrant Shares which can not be issued, at a price equal to the difference between the Market Price and the Exercise Price of such Warrant Shares as of the date of the attempted exercise. 11 Section 14. Date. This Warrant, in all events, shall be wholly void and of no effect after 11:59 PM Central Time on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of Section 7 shall continue in full force and effect after such date as to any Warrant Shares or other securities issued upon the exercise of this Warrant. Section 15. Amendment and Waiver. The provisions of this Warrant may only be amended upon a written instrument executed by the Company and the holders hereof. Section 16. Descriptive Headings; Governing Law. The descriptive headings of the several Sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The corporate laws of the State of Texas shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal laws of the State of Texas, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Texas or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Texas. Section 17. Successors and Assigns. This Warrant shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of this Warrant. The Company shall not assign this Warrant or any rights or obligations hereunder without the prior written consent of the holder of this Warrant, including by merger, consolidation or reorganization. The holder of this Warrant may assign some or all of its rights hereunder to (i) without the consent of the Company, any person or entity who, immediately prior to such assignment, is an affiliate of such holder (a "Permitted Assignee") and (ii) with the prior written consent of the Company, which consent shall not be unreasonably withheld, to any person or entity which is not a Permitted Assignee; provided, however, that any such assignment shall not release the holder of this Warrant from its obligations hereunder unless such obligations are assumed by such assignee and the Company has consented to such assignment and assumption, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, the holder of this Warrant shall be entitled to pledge the this Warrant and the shares of Common Stock issuable upon exercise of this Warrant in connection with a bona fide margin account. RTIN HOLDINGS, INC. By: ---------------------------------------------- Name: Curtis A. Swanson Title: President 12 EXHIBIT A TO WARRANT SUBSCRIPTION FORM TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT RTIN HOLDINGS, INC. The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of RTIN Holdings, Inc., a Texas corporation (the "Company"), evidenced by the attached Warrant (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant. 1. Form of Warrant Exercise Price. The Holder intends that payment of the Warrant Exercise Price shall be made as: ____________ a CASH EXERCISE with respect to _______________________ Warrant Shares; and/or ____________ a CASHLESS EXERCISE with respect to ___________________ Warrant Shares (to the extent permitted by the terms of the Warrant). 2. Payment of Warrant Exercise Price. In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the sum of $___________________ to the Company in accordance with the terms of the Warrant. 3. Delivery of Warrant Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance with the terms of the Warrant. Date: _______________ __, ______ Printed Name: ___________________________________ By: ___________________________________ Name: Title: 13 EXHIBIT B TO WARRANT FORM OF WARRANT POWER FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to ________________, Federal Identification No. __________, a warrant to purchase ____________ shares of the capital stock of RTIN Holdings, Inc., a Texas corporation, represented by warrant certificate no. _____, standing in the name of the undersigned on the books of said corporation. The undersigned does hereby irrevocably constitute and appoint ______________, attorney to transfer the warrants of said corporation, with full power of substitution in the premises. Dated: _________, ____ Name: ____________________________________ By: _______________________________ 14 EX-99.1 9 rtin8kex991062703.txt PRESS RELEASE DATED JUNE 30,2003 EXHIBIT 99.1 RTIN Holdings, Inc. Announces Completion of Private Placement Offering Longview, TX - June 30, 2003 RTIN Holdings (NASD OTC BB: RTNH), the Company is pleased to announce today that it has completed a private placement with various accredited investors (the "Investors") for Two Million One Hundred Thousand Dollars ($2,100,000) of the company's restricted common stock and warrants, without any registration rights. The offering consisted of 100,000 units at Twenty One Dollars ($21) per unit with each unit consisting of 8 restricted common shares, 5 Series A Warrants, 5 Series B Warrants, and 25 Series C Warrants, all Warrants with a strike price of $1.50 per share. As part of the offering the Warrants have been issued to the Investors but are held by the Company's attorneys in escrow and will be returned back to the Company and cancelled upon the meeting of certain benchmarks established in the offering. If the benchmarks are not met then the Warrants are then exercisable by the Investors on a pro-rata basis based on predetermined benchmarks. Although there can be no guarantees, the Company's managements is confident that a majority, if not all, of the A, B and C Warrants will ultimately be returned to the Company and cancelled over the course of the next twelve months. At the same time that this transaction was completed, these same Investors purchased a significant portion of the Series A Preferred stock from the Companies prior convertible holders and simultaneously therewith converted the newly acquired Series A Preferred to common stock. The Companies prior convertible holders also converted their remaining balance of Series A Preferred to common stock thus eliminating all convertible instruments as of the close of this transaction on June 27, 2003. In addition, the Company has settled the long-running litigation between it and it's prior convertible holders as announced in a press release earlier today. Curtis A. Swanson, President of RTIN Holdings, Inc. stated, "This is a major step forward for this Company and our shareholders. This transaction provides the Company with the capital required to move forward with our expansion plans for the Safe Med Systems and Safescript Pharmacies divisions and to close on the MedEx Systems and Pegasus Pharmacy acquisitions while at the same time eliminating all convertible instruments from our capital structure." Mr. Swanson went on to say, "We are very pleased with these developments and are excited to be working with our new Investors to position the Company for national growth and exposure." RTIN Holdings, Inc. is a public holding company with two operating subsidiaries, Safe Med Systems, Inc. and Safescript Pharmacies, Inc. Safe Med Systems, Inc. (TM) is a medical communications/technology company that provides state-of-the-art, hand-held prescription units loaded with patent-pending software and secure, broadband wireless technology. Safescript Pharmacies, Inc. (TM) is the preferred retail pharmacy provider that specializes in filling prescriptions generated by the Safe Med Systems technology. For additional information please visit our websites at www.rtinholdings.com and www.safemedinc.com Contact: Curtis Swanson, President at cswanson@rtinholdings.com or 903-295-6800. Certain statements in this news release may constitute "forward-looking" statements within the meaning of section 21E of the securities and Exchange Act of 1934. The Company believes that its expectations, as expressed in these statements are based on reasonable assumptions regarding the risks and uncertainties inherent in achieving those expectations. These statements are not, however, guarantees of future performance and actual results may differ materially. Other risk factors are listed in the most recent Annual Report on Form 10-KSB and Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission. Such forward-looking statements involve risks, EX-99.2 10 rtin8kex992062703.txt PRESS RELEASE DATED JUNE 30, 2003 EXHIBIT 99.2 RTIN Holdings, Inc. Finalizes Acquisition MedEx Systems, Inc. & Pegasus Pharmacy, Inc. Longview, TX - June 30, 2003 RTIN Holdings (NASD OTC BB: RTNH), announced, that it has acquired 100% of the stock of MedEx Systems Inc. ("MedEx") & Pegasus Pharmacy Inc. ("Pegasus") two privately held corporations. RTIN Holdings paid cash in the amount of $1,256,000 and 1,250,000 shares of RTNH restricted common stock, without any registration rights, for its 100% ownership of MedEx & Pegasus. The Company also assumed certain liabilities of the seller in connection with the completed acquisition. The cash payments and stock which have already been released to seller from escrow along with the debt assumption, fully and completely, pay for the transaction. The Company believes that this strategic acquisition, which aligns the companies previously separated in March of 2002, is a major step forward in securing the objective of national expansion of their wireless prescribing system coupled with the preferred pharmacy fulfillment centers. The success of the roll out of the MedEx wireless electronic medical prescription writing devices in concert with the automatic fulfillment of prescription drugs at the Pegasus Pharmacy in the New Orleans market has positioned the new combined organizations as a market leader in the pain management niche of the burgeoning and underserved $100 billion pharmacy industry. Subsequent to proving the remarkable effectiveness of this new system at Louisiana State University (through the Pain Mastery Center of Louisiana) as well as in the Company's current Safescript markets, the Company is fast tracking expansion throughout the remaining major US markets. Pegasus currently has pharmacies open in New Orleans, Baton Rouge, and Covington, Louisiana with a fourth unit preparing to open at Northshore in New Orleans. The current revenue for the existing Pegasus pharmacy operations is exceeding $10,000,000 annually and growing month over month in existing units. These sales, coupled with the sales being generated from the Company's Safescript Pharmacy division create the springboard for the Company's national expansion plans. Mr. Laurence Solow, the founder of MedEx Systems, Inc. and Pegasus Pharmacy, Inc. has now left the companies. RTIN Holdings, Inc. has assumed complete management control of both subsidiaries and has notified the Louisiana Board of Pharmacy and Drug Enforcement Agency of the change of control. The Company has retained Edward Dmytryk, a turnaround specialist who's most recent accomplishment was the successful revitalization of Park City Group, a former part of the nationally branded Ms. Field's Cookies Company, to assume oversight control of MedEx and Pegasus during the transition period. Mr. Dmytryk has been retained by the board of RTNH to restructure operations of all subsidiaries to obtain the maximum efficiencies of the combined companies. Mr. Dmytryk will begin his work in New Orleans beginning July 7, 2003 and will report directly to the board of directors of the Company. Curtis Swanson, President of RTIN Holdings, Inc. stated, "The synergies afforded by this completed acquisition are incredible. In addition to adding a mature pharmacy unit to our model which is already achieving unit numbers consistent with the overall business plan, the Company is acquiring 30 more major metropolitan CMSA's in which it can now exclusively develop the Safe Med Systems and Safescript Pharmacies models. The total population of the CMSA's being acquired is in excess of 100,000,000 which provides the opportunity for tremendous market partner activity in the future as well as accelerated Company owned development." RTIN Holdings, Inc. is a public holding company with two operating subsidiaries, Safe Med Systems, Inc. and Safescript Pharmacies, Inc. Safe Med Systems, Inc. (TM) is a medical communications/technology company that provides state-of-the-art, hand-held prescription units loaded with patent-pending software and secure, broadband wireless technology. Safescript Pharmacies, Inc. (TM) is the preferred retail pharmacy provider that specializes in filling prescriptions generated by the Safe Med Systems technology. For additional information please visit our websites at www.rtinholdings.com and www.safemedinc.com Contact: Curtis Swanson, President at cswanson@rtinholdings.com or 903-295-6800. Certain statements in this news release may constitute "forward-looking" statements within the meaning of section 21E of the securities and Exchange Act of 1934. The Company believes that its expectations, as expressed in these statements are based on reasonable assumptions regarding the risks and uncertainties inherent in achieving those expectations. These statements are not, however, guarantees of future performance and actual results may differ materially. Other risk factors are listed in the most recent Annual Report on Form 10-KSB and Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission. Such forward-looking statements involve risks, EX-99.3 11 rtin8kex993062703.txt PRESS RELEASE DATED JUNE 30, 2003 EXHIBIT 99.3 RTIN Holdings, Inc. Settles Lawsuits with Southridge Capital Management LLC and Related Parties Longview, Texas, June 30, 2003 - RTIN Holdings, Inc. ("RTIN") announced today that it has reached a final agreement with Southridge Capital Management LLC, Sovereign Partners Limited Partnership, Dominion Capital Fund Limited, Stephen Hicks and related parties (the "Investors") to settle the long-running litigation between RTIN and the Investors. In November 1998, RTIN alleged the Investors were manipulating the market for RTIN securities through short-selling of its stock, RTIN brought suit against Investors for securities fraud and refused to honor the Debentures it had issued to the Investors earlier that year. The Investors counterclaimed for, among other things, enforcement of the Debentures. In late 1999 RTIN reached a settlement agreement in principle with the Investors, retracted its allegations of wrongdoing, and re-commenced honoring the Debentures. In 2001, however, a number of RTIN's officers and shareholders filed a new suit against the Investors, once again making allegations of short selling and market manipulation, and in 2002 RTIN attempted to reinstate its owns claims against the Investors. RTIN has now determined, based in part upon information provided by the Investors during the litigation, that there was and is no basis in fact for any of RTIN's allegations of wrongdoing on the part of the Investors. The Investors did not engage in any unlawful or wrongful conduct with respect to RTIN, its stock, its officers, or its shareholders. In recognition and acknowledgement of this fact and of RTIN's continuing financial obligation to the holders of RTIN Debentures, RTIN has reached a final settlement with the Investors. This settlement, which has been executed by all necessary parties, fully and finally resolves RTIN's claims of wrongdoing by the Investors and the Investors' counterclaims. As a result of the settlement, all litigation between the parties has been or will be dismissed. Curtis A. Swanson, President and Chief Operating Officer of RTIN, commented, "We at RTIN deeply regret any harm caused to the Investors as a result of our allegations of wrongdoing." Mr. Swanson added, "It is time for us to move forward with this business model which is proving to have so much promise. We are now able to put the litigation behind us and focus on the future successes of RTIN and our shareholders." Mr. Swanson went on to say, "We are very excited about our future for all our operating subsidiaries and look forward to implementing this system through our national expansion program." RTIN acknowledges that one of the purposes of this press release is to undo, to the extent possible, the harm that has been caused to the Investors by the allegations made against them by RTIN, its officers, and its shareholders. A spokesman for the Investors stated, "We are pleased to put this matter behind us and wish RTIN every success in the future as it moves forward with its business plan." Contact: Curtis A. Swanson, President and Chief Operating Officer cswanson@rtinholdings.com or by telephone at 903-295-6800 Certain statements in this news release may constitute "forward-looking" statements within the meaning of section 21E of the securities and Exchange Act of 1934. The Company believes that its expectations, as expressed in these statements are based on reasonable assumptions regarding the risks and uncertainties inherent in achieving those expectations. These statements are not, however, guarantees of future performance and actual results may differ materially. Other risk factors are listed in the most recent Annual Report on Form 10-KSB and Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission. Such forward-looking statements involve risks, uncertainties, which may cause the actual results, performance, or achievement expressed or implied to differ. -----END PRIVACY-ENHANCED MESSAGE-----