Exhibit 10.8
Stock Purchase Agreement and Warrant Agreement (form)
for pending private placement
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement"), dated as of ________________,
1999, is by and between _____________________, an individual ("PURCHASER"),
and XXXXXXXXXXXXXXXX.XXX, INC., a Delaware corporation ("SELLER")
(collectively, the "PARTIES").
W I T N E S S E T H
WHEREAS, SELLER is offering for sale a maximum of 5,000,000 units (the
"Units"), each unit consisting of one share of SELLER'S common stock (the
"Shares") and one warrant, exercisable at $0.75 and expiring two years after
the date of issuance (the "Warrants"), at $0.75 per Unit, minimum investment
$25,000 (33,333 Units).
WHEREAS, SELLER desires to sell to PURCHASER and PURCHASER desires to
purchase from SELLER, __________ Units of SELLER (the "Units") upon the terms
and conditions set forth herein.
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the PARTIES hereto
as follows:
ARTICLE 1
SALE AND PURCHASE OF THE UNITS
1.1 Sale of the Units. Upon execution of this Agreement (the "Closing"),
subject to the terms and conditions herein set forth, and on the basis of the
representations, warranties and agreements herein contained, SELLER shall
sell to PURCHASER, and PURCHASER shall purchase from SELLER, the Units.
1.2 Instruments of Conveyance and Transfer. As soon as practicable after the
Closing, SELLER shall deliver a certificate or certificates representing the
Units of SELLER to PURCHASER sufficient to transfer all right, title and
interest in the Units to PURCHASER.
1.3 Consideration and Payment for the Units. In consideration for the
Units, PURCHASER shall pay a purchase price of a total of
________________________________dollars ($_______) ($0.75 per Unit)
("Purchase Price").
ARTICLE 2
REPRESENTATIONS AND COVENANTS OF SELLER AND PURCHASER
2.1 SELLER hereby represents and warrants that:
(a) The Units issued hereunder (the "Units") have been duly authorized by the
appropriate corporate action of SELLER.
(b) SELLER shall transfer title, in and to the Units to PURCHASER free and
clear of all liens, security interests, pledges, encumbrances, charges,
restrictions, demands and claims, of any kind and nature whatsoever, whether
direct or indirect or contingent.
2.2 As soon as practicable after the Closing Date, SELLER shall deliver to
PURCHASER a certificate or certificates representing the Units subject to no
liens, security interests, pledges, encumbrances, charges, restrictions,
demands or claims in any other party whatsoever, except as set forth in the
legend on the certificate, which legend shall provide as follows:
THE SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
2.3. PURCHASER acknowledges that the Units will initially be "restricted
securities" (as such term is defined in Rule 144 promulgated under the
Securities Act of 1933, as amended ("Rule 144"), that the Units will include
the foregoing restrictive legend, and, except as otherwise set forth in this
Agreement, that the Units cannot be sold for a period of at least one year
from the date of issuance unless registered with the United States Securities
and Exchange Commission ("SEC") and qualified by appropriate state securities
regulators, or unless PURCHASER obtains written consent from SELLER and
otherwise complies with an exemption from such registration and qualification
(including, without limitation, compliance with Rule 144).
2.4 SELLER certifies that attached hereto as Exhibit A is the Warrant
Agreement and form of Warrant Certificate setting forth the terms of the
Warrants. Exhibit A is incorporated herein by reference as though fully set
forth herein.
2.5 PURCHASER acknowledges and agrees that SELLER makes no other
representations or warranties with respect to the Units or the SELLER.
2.6 PURCHASER represents and warrants to SELLER as follows:
(a) PURCHASER has adequate means of providing for current needs and
contingencies, has no need for liquidity in the investment, and is able to
bear the economic risk of an investment in the Units offered by SELLER of the
size contemplated. PURCHASER represents that PURCHASER is able to bear the
economic risk of the investment and at the present time could afford a
complete loss of
such investment. PURCHASER has had a full opportunity to inspect the books
and records of the SELLER and to make any and all inquiries of SELLER
officers and directors regarding the SELLER and its business as PURCHASER has
deemed appropriate.
(b) PURCHASER is an "Accredited Investor" as defined in Regulation D of the
Securities Act of 1933 (the "Act") and PURCHASER, either alone or with
PURCHASER's professional advisers who are unaffiliated with, have no equity
interest in and are not compensated by SELLER or any affiliate or selling
agent of SELLER, directly or indirectly, has sufficient knowledge and
experience in financial and business matters that PURCHASER is capable of
evaluating the merits and risks of an investment in the Units offered by
SELLER and of making an informed investment decision with respect thereto and
has the capacity to protect PURCHASER's own interests in connection with
PURCHASER's proposed investment in the Units.
(c) PURCHASER is acquiring the Units solely for PURCHASER'S own account as
principal, for investment purposes only and not with a view to the resale or
distribution thereof, in whole or in part, and no other person or entity has
a direct or indirect beneficial interest in such Units.
(d) PURCHASER will not sell or otherwise transfer the Units without
registration under the Act or an exemption therefrom and fully understands
and agrees that PURCHASER must bear the economic risk of PURCHASER'S purchase
for an indefinite period of time because, among other reasons, the Units have
not been registered under the Act or under the securities laws of any state
and, therefore, cannot be resold, pledged, assigned or otherwise disposed of
unless they are subsequently registered under the Act and under the
applicable securities laws of such states or unless an exemption from such
registration is available.
ARTICLE 3
REGISTRATION RIGHTS
3.1 Piggyback Registration Rights. If the COMPANY at any time proposes to
register any of its securities under the Act, including under an SB-2
Registration Statement or otherwise, the COMPANY will use its best efforts to
cause all of the Shares and all of the shares of common stock underlying the
Warrants owned by PURCHASER to be registered under the Act (with the
securities which the COMPANY at the time propose to register), all to the
extent requisite to permit the sale or other disposition by the PURCHASER;
provided, however, that the COMPANY may, as a condition precedent to its
effecting such registration, require the PURCHASER to agree with the COMPANY
and the managing underwriter or underwriters of the offering to be made by
the COMPANY in connection with such registration that the PURCHASER will not
sell any securities of the same class or convertible into the same class as
those registered by the COMPANY (including any class into which the
securities registered by the COMPANY are convertible) for such reasonable
period after such registration becomes effective as shall then be specified
in writing by such underwriter or underwriters if in the opinion of such
underwriter or underwriters the COMPANY's offering would be materially
adversely affected in the absence of such an agreement. All expenses incurred
by the COMPANY in complying with this Section, including without limitation
all registration and filing fees, listing fees, printing expenses, fees and
disbursements of all independent accounts, or counsel for the COMPANY and or
counsel for the PURCHASER and the expense of any special audits incident to
or required by any
such registration and the expenses of complying with the securities or blue
sky laws of any jurisdiction shall be paid by the COMPANY. Notwithstanding
the foregoing, PURCHASER shall pay all underwriting discounts or commissions
with respect to any securities sold by the PURCHASER.
3.2 Indemnification.
(a) In the event of any registration of any of its securities under the Act
pursuant to this Section, the COMPANY hereby indemnifies and holds harmless
the PURCHASER (which phrase shall include any underwriters of such
securities), their respective directors and officers, and each other person
who participates, in the offering of such securities and each other person,
if any, who controls the PURCHASER, or such participating persons within the
meaning of the Act, against any losses, claims, damages or liabilities, joint
or several, to which each the PURCHASER or any such director or officer or
participating person or controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon any omission or alleged omission to state
therein an material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each the PURCHASER
and each director, officer or participating or controlling person for any
legal or any other expenses reasonably incurred by the PURCHASER or such
director, officer or participating or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the COMPANY shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary prospectus
or prospectus or amendment or supplement in reliance upon and in conformity
with written information furnished to the COMPANY through an instrument duly
executed by the PURCHASER specifically stating that it is for use therein.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the PURCHASER or such directors,
officer or participating or controlling person, and shall survive the
transfer of such securities by the PURCHASER.
(b) The PURCHASER shall by acceptance thereof, indemnify and hold harmless
the COMPANY and its directors and officers, and each person, if any who
controls the COMPANY, against any losses, claims, damages or liabilities,
joint or several, to which the COMPANY or any director or officer or any such
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which securities were registered under the Act at the request
of such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in such registration statement, preliminary prospectus, prospectus,
amendment or supplement in reliance upon and in
conformity with written information furnished to the COMPANY through an
instrument duly executed by or on behalf of such holder specifically stating
that it is for use therein; and will reimburse the COMPANY or such director,
officer or person for any legal or any other expense reasonably incurred in
connection with investigation or defending any such loss, claim, damage,
liability or action.
3.3 Rule 144. If the COMPANY shall be subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
COMPANY will use its best efforts timely to file all reports required to be
filed from time to time with the SEC (including but not limited to the
reports under Section 13 and 15(d) of the 1934 Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the SEC under the Act). If there
is a public market for any securities of the COMPANY at any time that the
COMPANY is not subject to the reporting requirements of either of said
Section 13 or 15(d), the COMPANY will, upon the request of PURCHASER, use its
best efforts to make publicly available the information concerning the
COMPANY referred to in subparagraph (c)(2) of said Rule 144. The COMPANY will
furnish to PURCHASER, promptly upon request, (i) a written statement of the
COMPANY's compliance with the requirements of subparagraphs (c)(1) or (c)(2),
as the case may be, of said Rule 144, and (ii) written information concerning
the COMPANY sufficient to enable PURCHASER to complete any Form 144 required
to be filed with the SEC pursuant to said Rule 144.
ARTICLE 4
MISCELLANEOUS
4.1 Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding,
promise, inducement, statement of intention, representation, warranty,
covenant or condition, written or oral, express or implied, whether by
statute or otherwise, has been made by any party hereto which is not embodied
in this Agreement or the written statements, certificates, or other documents
delivered pursuant hereto or in connection with the transactions contemplated
hereby, and no party hereto shall be bound by or liable for any alleged
understanding, promise, inducement, statement, representation, warranty,
covenant or condition not so set forth.
4.2 Notices. Any notice, request, instruction, or other document required by
the terms of this Agreement, or deemed by any of the parties hereto to be
desirable, to be given to any other party hereto shall be in writing and
shall be given by facsimile, personal delivery, overnight delivery, or mailed
by registered or certified mail, postage prepaid, with return receipt
requested, to the following addresses:
TO SELLER: xxxxxxxxxxxxxxxx.xxx, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xx. Xxxxxx X. Xxxxxxxx, Secretary/Treasurer
TO PURCHASER: ___________________________
_____________________________
_____________________________
Fax: (___) __________________
Attn:__________________________
WITH COPY TO: XXXXXXX & BEAM
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx, Esq.
The persons and addresses set forth above may be changed from time to time by
a notice sent as aforesaid. If notice is given by facsimile, personal
delivery, or overnight delivery in accordance with the provisions of this
Section, said notice shall be conclusively deemed given at the time of such
delivery. If notice is given by mail in accordance with the provisions of
this Section, such notice shall be conclusively deemed given seven days after
deposit thereof in the United States mail.
4.3 Waiver and Amendment. Any term, provision, covenant, representation,
warranty or condition of this Agreement may be waived, but only by a written
instrument signed by the party entitled to the benefits thereof. The failure
or delay of any party at any time or times to require performance of any
provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right
at a later time to enforce the same. No waiver by any party of any condition,
or of the breach of any term, provision, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall be deemed to
be or construed as a further or continuing waiver of any such condition or
breach or waiver of any other condition or of the breach of any other term,
provision, covenant, representation or warranty. No modification or amendment
of this Agreement shall be valid and binding unless it be in writing and
signed by all parties hereto.
4.4 Choice of Law. This Agreement and the rights of the parties
hereunder shall be governed by and construed in accordance with the laws of
the State of California including all matters of construction, validity,
performance, and enforcement and without giving effect to the principles of
conflict of laws.
4.5 Jurisdiction. The parties submit to the jurisdiction of the Courts of the
County of Orange, State of California or a Federal Court empaneled in the
State of California for the resolution of all legal disputes arising under
the terms of this Agreement, including, but not limited to, enforcement of
any arbitration award.
4.6 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.
4.7 Attorneys' Fees. Except as otherwise provided herein, if a dispute should
arise between the parties including, but not limited to arbitration, the
prevailing party shall be reimbursed by the non-prevailing party for all
reasonable expenses incurred in resolving such dispute, including reasonable
attorneys' fees exclusive of such amount of attorneys' fees as shall be a
premium for result or for risk of loss under a contingency fee arrangement.
4.8 Taxes. Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the party required to make such
payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the party required to withhold such tax shall
furnish to the party receiving such payment all documentation necessary to
prove the proper amount to withhold of such taxes and to prove payment to the
tax authority of such required withholding.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written hereinabove.
PURCHASER
-----------------------------------
By: _________________________________
Its:__________________________________
SELLER
THEHEALTHCHANNEL, INC.
a Delaware corporation
By: Xxxxxx X. Xxxxxxxx
Its: Secretary and Treasurer
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is made and entered into as of
_______________, 1999, between XXXXXXXXXXXXXXXX.XXX, INC., a Delaware
corporation (the "Company") and ____________________
______________________________ ("Holder").
R E C I T A L S
WHEREAS, the Company proposes to issue to Holder ______ warrants (the
"Warrants"), each such Warrant entitling the holder thereof to purchase one
share of Common Stock of the Company (the "Exercise Shares," "Shares," or the
"Common Stock"); and
WHEREAS, the Warrants which are the subject of this Agreement will be issued
by the Company to Holder as part of consideration payable to Holder in
connection with an investment by the Holder pursuant to the concurrent
private offering of the Company (the "Offering").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
A G R E E M E N T
1. Warrant Certificates. The warrant certificates to be delivered pursuant to
this Agreement (the "Warrant Certificates") shall be in the form set forth in
Exhibit A, attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Warrant Agreement.
2. Right to Exercise Warrants. Each Warrant may be exercised from the date of
this Agreement until 11:59 P.M. (Pacific time) on the date that is two years
after the date of this Agreement (the "Expiration Date"). Each Warrant not
exercised on or before the Expiration Date shall expire.
Each Warrant shall entitle its holder to purchase from the Company one share
of Common Stock at an exercise price of $0.75 per share, subject to
adjustment as set forth below ("Exercise Price").
The Company shall not be required to issue fractional shares of capital stock
upon the exercise of this Warrant or to deliver Warrant Certificates which
evidence fractional shares of capital stock. In the event that a fraction of
an Exercise Share would, except for the provisions of this paragraph 2, be
issuable upon the exercise of this Warrant, the Company shall pay to the
Holder exercising the Warrant an amount in cash equal to such fraction
multiplied by the current market value of the Exercise Share. For purposes of
this Agreement, the current market value shall be determined as follows:
(a) if the Exercise Shares are traded in the over-the-counter market and not
on any national securities exchange and not in the NASDAQ Reporting System,
the average of the mean between the last bid and asked prices per share, as
reported by the National Quotation Bureau, Inc., or an equivalent generally
accepted reporting service, for the last business day prior to the date on
which this Warrant is exercised, or, if not so reported, the average of the
closing bid and asked prices for an Exercise Share as furnished to the
Company by any member of the National Association of Securities Dealers,
Inc., selected by the Company for that purpose.
(b) if the Exercise Shares are listed or traded on a national securities
exchange or in the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded
or in the NASDAQ Reporting System, as the case may be, on the last business
day prior to the date of the exercise of this Warrant. The closing price
referred to in this Clause (b) shall be the last reported sales price or, in
case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices, in either case on the national
securities exchange on which the Exercise Shares are then listed or in the
NASDAQ Reporting System; or
(c) if no such closing price or closing bid and asked prices are available,
as determined in any reasonable manner as may be prescribed by the Board of
Directors of the Company.
3. Mutilated or Missing Warrant Certificates. In case any of the Warrant
Certificates shall be mutilated, lost, stolen or destroyed prior to its
expiration date, the Company shall issue and deliver, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate,
or in lieu of and in substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent right or interest.
4. Reservation of Shares. The Company will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its
authorized but unissued Shares or its authorized and issued Shares held in
its treasury for the purpose of enabling it to satisfy its obligation to
issue Shares upon exercise of Warrants, the full number of Shares deliverable
upon the exercise of all outstanding Warrants.
The Company covenants that all Shares which may be issued upon exercise of
Warrants will be validly issued, fully paid and nonassessable outstanding
Shares of the Company.
5. Rights of Holder. The Holder shall not, by virtue of anything contained in
this Warrant Agreement or otherwise, prior to exercise of this Warrant, be
entitled to any right whatsoever, either in law or equity, of a stockholder
of the Company, including without limitation, the right to receive dividends
or to vote or to consent or to receive notice as a shareholder in respect of
the meetings of shareholders or the election of directors of the Company of
any other matter.
6. Investment Intent. Holder represents and warrants to the Company that
Holder is acquiring the Warrants for investment and with no present intention
of distributing or reselling any of the Warrants.
7. Certificates to Bear Language. The Warrants and the certificate or
certificates therefor shall bear the following legend by which each holder
shall be bound:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
(OR OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL THAT AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT IS AVAILABLE."
The Shares and the certificate or certificates evidencing any such Shares
shall bear the following legend:
"THE SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE."
Certificates for Warrants without such legend shall be issued if such
warrants or shares are sold pursuant to an effective registration statement
under the Securities Act of 1933 (the "Act") or if the Company has received
an opinion from counsel reasonably satisfactory to counsel for the Company,
that such legend is no longer required under the Act.
8. Piggyback Registration Rights. If the Company at any time proposes to
register any of its securities under the Act, including under an SB-2
Registration Statement or otherwise, the Company will use its best efforts to
cause all of the shares of common stock underlying the Warrants owned by
Holder to be registered under the Act (with the securities which the Company
at the time propose to register), all to the extent requisite to permit the
sale or other disposition by the Holder; provided, however, that the Company
may, as a condition precedent to its effecting such registration, require the
Holder to
agree with the Company and the managing underwriter or underwriters of the
offering to be made by the Company in connection with such registration that
the Holder will not sell any securities of the same class or convertible into
the same class as those registered by the Company (including any class into
which the securities registered by the Company are convertible) for such
reasonable period after such registration becomes effective as shall then be
specified in writing by such underwriter or underwriters if in the opinion of
such underwriter or underwriters the Company's offering would be materially
adversely affected in the absence of such an agreement. All expenses incurred
by the Company in complying with this Section, including without limitation
all registration and filing fees, listing fees, printing expenses, fees and
disbursements of all independent accounts, or counsel for the Company and or
counsel for the Holder and the expense of any special audits incident to or
required by any such registration and the expenses of complying with the
securities or blue sky laws of any jurisdiction shall be paid by the Company.
Notwithstanding the foregoing, Holder shall pay all underwriting discounts or
commissions with respect to any securities sold by the Holder.
(a) Indemnification.
(i) In the event of any registration of any of its securities under the Act
pursuant to this Section, the Company hereby indemnifies and holds harmless
the Holder (which phrase shall include any underwriters of such securities),
their respective directors and officers, and each other person who
participates, in the offering of such securities and each other person, if
any, who controls the Holder, or such participating persons within the
meaning of the Act, against any losses, claims, damages or liabilities, joint
or several, to which each the Holder or any such director or officer or
participating person or controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
securities were registered under the Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or
arise out of or are based upon any omission or alleged omission to state
therein an material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each the Holder and
each director, officer or participating or controlling person for any legal
or any other expenses reasonably incurred by the Holder or such director,
officer or participating or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement, preliminary prospectus
or prospectus or amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by the Holder specifically stating that it is for use therein. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Holder or such directors, officer
or participating or controlling person, and shall survive the transfer of
such securities by the Holder.
(ii) The Holder shall by acceptance thereof, indemnify and hold harmless the
Company and its directors and officers, and each person, if any who controls
the Company, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any director or officer or any such person
may become
subject under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which securities were registered under the Act at the request of such holder,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus, prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by or on behalf
of such holder specifically stating that it is for use therein; and will
reimburse the Company or such director, officer or person for any legal or
any other expense reasonably incurred in connection with investigation or
defending any such loss, claim, damage, liability or action.
(b) Rule 144. If the Company shall be subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
Company will use its best efforts timely to file all reports required to be
filed from time to time with the SEC (including but not limited to the
reports under Section 13 and 15(d) of the 1934 Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the SEC under the Act). If there
is a public market for any securities of the Company at any time that the
Company is not subject to the reporting requirements of either of said
Section 13 or 15(d), the Company will, upon the request of Holder, use its
best efforts to make publicly available the information concerning the
Company referred to in subparagraph (c)(2) of said Rule 144. The Company will
furnish to Holder, promptly upon request, (i) a written statement of the
Company's compliance with the requirements of subparagraphs (c)(1) or (c)(2),
as the case may be, of said Rule 144, and (ii) written information concerning
the Company sufficient to enable Holder to complete any Form 144 required to
be filed with the SEC pursuant to said Rule 144.
9. Adjustment of Number of Shares and Class of Capital Stock Purchasable. The
Number of Shares and Class of Capital Stock purchasable under this Warrant
Agreement are subject to adjustment from time to time as set forth in this
Section.
(a) Adjustment for Change in Capital Stock. If the Company:
(i) pays a dividend or makes a distribution on its Common Stock, in each
case, in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(iii) combines its outstanding shares of Common Stock into a smaller
number of shares;
(iv) makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock; or
(v) issues by reclassification of its shares of Common Stock any shares of
its capital stock;
then the number and classes of shares purchasable upon exercise of each
Warrant in effect immediately prior to such action shall be adjusted so that
the holder of any Warrant thereafter exercised may receive the number and
classes of shares of capital stock of the Company which such holder would
have owned immediately following such action if such holder had exercised the
Warrant immediately prior to such action.
For a dividend or distribution the adjustment shall become effective
immediately after the record date for the dividend or distribution. For a
subdivision, combination or reclassification, the adjustment shall become
effective immediately after the effective date of the subdivision,
combination or reclassification.
If after an adjustment the holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the
Board of Directors of the Company shall in good faith determine the
allocation of the adjusted Exercise Price between or among the classes of
capital stock. After such allocation, that portion of the Exercise Price
applicable to each share of each such class of capital stock shall thereafter
be subject to adjustment on terms comparable to those applicable to Common
Stock in this Agreement. Notwithstanding the allocation of the Exercise Price
between or among shares of capital stock as provided by this Section 9(a), a
Warrant may only be exercised in full by payment of the entire Exercise Price
currently in effect.
(b) Consolidation, Merger or Sale of the Company. If the Company is a party
to a consolidation, merger or transfer of assets which reclassifies or
changes its outstanding Common Stock, the successor corporation (or
corporation controlling the successor corporation or the Company, as the case
may be) shall by operation of law assume the Company's obligations under this
Warrant Agreement. Upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash
or other assets which the holder of a Warrant would have owned immediately
after the consolidation, merger or transfer if the holder had exercised the
Warrant immediately before the effective date of such transaction. As a
condition to the consummation of such transaction, the Company shall arrange
for the person or entity obligated to issue securities or deliver cash or
other assets upon exercise of the Warrant to, concurrently with the
consummation of such transaction, assume the Company's obligations hereunder
by executing an instrument so providing and further providing for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Section 9.
10. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or Holder shall bind and inure to the benefit of
their respective successor and assigns hereunder.
11. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all proposes be deemed
to be an original, and such counterparts shall together constitute by one and
the same instrument.
12. Notices. Any notice, request, instruction, or other document required by
the terms of this Agreement, or deemed by any of the parties hereto to be
desirable, to be given to any other party hereto shall be in writing and
shall be given by facsimile, personal delivery, overnight delivery, or mailed
by registered or certified mail, postage prepaid, with return receipt
requested, to the following addresses:
TO SELLER: xxxxxxxxxxxxxxxx.xxx, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xx. Xxxxxx X. Xxxxxxxx, Secretary/Treasurer
TO HOLDER: ___________________________
---------------------------
---------------------------
Fax: (___) __________________
Attn:_______________________
WITH COPY TO: XXXXXXX & BEAM
Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxx Xxxxxx, Esq.
The persons and addresses set forth above may be changed from time to time by
a notice sent as aforesaid. If notice is given by facsimile, personal
delivery, or overnight delivery in accordance with the provisions of this
Section, said notice shall be conclusively deemed given at the time of such
delivery. If notice is given by mail in accordance with the provisions of
this Section, such notice shall be conclusively deemed given seven days after
deposit thereof in the United States mail.
13. Supplements and Amendments. The Company may from time to time supplement
or amend this Warrant Agreement without the approval of any Holders of
Warrants in order to cure any ambiguity or to be correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provision, or to make any other provisions in regard to matters or
questions herein arising hereunder which the Company may deem necessary or
desirable and which shall not materially adversely affect the interest of the
Holder.
14. Severability. If for any reason any provision, paragraph or term of this
Warrant Agreement is held to be invalid or unenforceable, all other valid
provisions herein shall remain in full force and effect and all terms,
provisions and paragraphs of this Warrant shall be deemed to be severable.
15. Governing Law and Venue. This Warrant shall be deemed to be a contract
made under the laws of the State of California and for all purposes shall be
governed and construed in accordance with the laws of said State. Any
proceeding arising under this Warrant Agreement shall be instituted in the
County of Orange, State of California.
16. Headings. Paragraphs and subparagraph headings, used herein are included
herein for convenience of reference only and shall not affect the
construction of this Warrant Agreement nor constitute a part of this Warrant
Agreement for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the date and year first above written.
"COMPANY"
XXXXXXXXXXXXXXXX.XXX, INC.
-----------------------------
-----------------------------
BY: Xxxxxx X. Xxxxxxxx
ITS: Secretary/Treasurer
"HOLDER"
_____________________________
_____________________________
By:__________________________
Its:_______________________________
EXHIBIT A
NUMBER __ WARRANT
Warrant to Purchase
Shares
XXXXXXXXXXXXXXXX.XXX, INC. see reverse for
COMMON STOCK PURCHASE WARRANT certain
definitions
will be void if not exercised prior to 11:59 P.M. Pacific Time on
__________, ____
This Certifies that for value received,
the registered holder or assigns ("Holder"),
is entitled to purchase from xxxxxxxxxxxxxxxx.xxx, Inc., a Delaware
corporation (the "Company") at any time after 9:00 A.M. Pacific Time on
__________, ____ at the purchase price per share of $0.75 (the "Warrant
Price"), the number of shares of Common Stock of the Company set forth above
(the "Shares"). The number of shares purchasable upon exercise of each
warrant evidenced hereby and the Warrant Price per Share shall be subject to
adjustment from time to time as set forth in the Warrant Agreement referred
to below. The Warrants expire on __________, ____. Holders will not have any
rights or privileges of shareholders of the Company prior to exercise of the
Warrants. Holders of the Warrants evidenced hereby and the shares of Common
Stock issuable upon exercise hereof have certain rights with respect to
registration with the Securities and Exchange Commission of the Warrants and
Common Stock issuable upon exercise hereof. These registration rights are set
forth in that certain Warrant Agreement of even date herewith pursuant to
which this Warrant Certificate has been issued. The Warrant evidenced hereby
may be exercised in whole or in part by presentation of this Warrant
certificate with the Purchase Form on the reverse side hereof fully executed
(with a signature guarantee as provided on the reverse side hereof) and
simultaneous payment of the Warrant Price (subject to adjustment) at the
principal office of the Company. Payment of such price shall be made at the
option of the Holder in cash or by certified check or bank draft. The
Warrants evidenced hereby are part of a duly authorized issue of Common Stock
Purchase Warrants with rights to purchase an aggregate of up to 5,000,000
shares of Common Stock of the Company. Upon any partial exercise of the
Warrant evidenced hereby, there shall be countersigned and issued to the
Holder a new Warrant Certificate in respect of the Shares as to which the
Warrants evidenced hereby shall not have been exercised. This Warrant
Certificate may be exchanged at the office of the Company by surrender of
this Warrant Certificate properly endorsed with a signature guarantee either
separately or in combination with one or more other Warrants for one or more
new Warrants to purchase the same aggregate number of Shares as evidenced by
the Warrant or Warrants exchanged. No fractional Shares will be issued upon
the exercise of rights to purchase hereunder, but the Company shall pay the
cash value of any fraction upon the exercise of one or more Warrants. The
Holder hereof may be treated by the Company and all other persons dealing
with this Warrant Certificate as the absolute owner hereof for all purposes
and as the person entitled to exercise the rights represented hereby, any
notice to the contrary notwithstanding, and until such transfer is on such
books, the Company may treat the Holder as the owner for all purposes.
Dated: __________, ____
XXXXXXXXXXXXXXXX.XXX, INC.
Secretary Chief Executive
Officer
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
CERTAIN STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT
APPLICABLE, RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS AVAILABLE.
ELECTION TO PURCHASE
The undersigned hereby elects irrevocably to exercise the within Warrant and to
purchase _______________________ shares of Common Stock of xxxxxxxxxxxxxxxx.xxx,
Inc. and hereby makes payment of $_________ (at the rate of $________ per share)
in payment of the Exercise Price pursuant hereto. Please issue the shares as to
which this Warrant is exercised in accordance with the instructions given below.
The undersigned represents and warrants that the exercise of the within Warrant
was solicited by the member firm of the National Association of Securities
Dealers, Inc. ("NASD") listed below. If not solicited by an NASD member,
please write "unsolicited" in the space below.
------------------------------------------------------
(Insert Name of NASD Member or "Unsolicited")
Dated: ________________________ Signature: ________________________________
INSTRUCTIONS FOR REGISTRATION OF SHARES
Name (print) __________________________________________________________________
Address (print) _______________________________________________________________
ASSIGNMENT
FOR VALUE RECEIVED, ________________________________________________________
does hereby sell, assign and transfer unto
___________________________________________________, the right to purchase
________________shares of Common Stock of xxxxxxxxxxxxxxxx.xxx, Inc. ,
evidenced by the within Warrant, and does hereby irrevocably constitute and
appoint __________________________________________ attorney to transfer such
right on the books of xxxxxxxxxxxxxxxx.xxx, Inc., with full power of
substitution on the premises.
Dated: ________________, 19______
Signature: _____________________________________________
Notice: The signature of Election to Purchase or Assignment must correspond
with the name as written upon the face of the within Warrant in every
particular without alteration or enlargement or any change whatsoever. The
signature(s) must by guaranteed by an eligible guarantor institution (Banks,
Stockbrokers, Savings and Loan Associations and Credit Unions with membership
in an approved signature guarantee Medallion Program), pursuant to S.E.C.
Rule 17Ad-15.
-----------------------------------------
Signature Guarantee
