STOCK AND WARRANT PURCHASE AGREEMENT
This Stock and Warrant Purchase Agreement, dated as of September
15, 1997, is by and between Berkeley Investment Group, Ltd.
("PURCHASER") and GolfGear International, Inc., a Nevada
corporation ("SELLER").
WITNESSETH
WHEREAS, SELLER desires to sell 250,000 shares (the "Shares") of
the "restricted" common stock of SELLER to PURCHASER on the terms
and conditions set forth in this Stock and Warrant Purchase
Agreement (hereinafter called "Agreement");
WHEREAS, SELLER desires to sell 300,000 warrants to acquire
common stock of SELLER to PURCHASER on the terms and conditions
set forth in this Agreement (the "Warrants"); and
WHEREAS, PURCHASER desires to buy the Shares and the Warrants on
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 SHARES AND WARRANTS
1.1 Sale of the Shares. Upon the execution of this Agreement as
provided in Section 3.1 hereto (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 Shares.
1.2 Issuance of the Warrants, In. addition, at 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 PURCI-IASER, and PURCHASER shall
purchase from SELLER, the Warrants, each entitling its holder to
acquire one (1) share of common stock of SELLER at a price of
$1.00 per share, expiring three years from the date of this
Agreement. The Warrants shall be issued pursuant to the terms of
that certain Warrant Agreement between SELLER and PURCHASER of
even date herewith, a copy of which is attached as Exhibit A
hereto. The terms and conditions of the Warrant Agreement are
incorporated herein by reference.
1.3 Instruments of Conveyance and Transfer. Within 30 days from
the Closing, SELLER shall deliver or cause to be delivered a
certificate or certificates representing 250,000 Shares to
PURCHASER, in form and substance satisfactory to PURCHASER, as
shall be effective to vest in PURCHASER all right, title and
interest in and to all, of the Shares, as set forth in Section 3
herein. In addition, SELLER shall deliver 300,000 warrants as
described herein.
1.4 Consideration and Payment for the Shares and Warrants. In
consideration for the Shares and the Warrants, PURCHASER shall
pay the purchase price equal to $2.00 per share (including said
Warrants), for the total purchase price of $500,000 ("Purchase
Price"). The Purchase Price shall be forwarded by PUCHASER in
immediately available funds to the client trust account of
counsel for SELLER as escrow agent on the Closing Date.
1.5 Additional Terms and Conditions. SELLER and PURCHASER
hereby agree to the following additional terms and conditions:
(a) The SELLER shall, within 90 days of the date the common
stock of SELLER commences trading on the Nasdaq over-the-counter
market, the Nasdaq "pink sheets", the. Nasdaq Small Cap market
or any other nationally recognized market for the trading of the
common stock of Seller (collectively, a "Trading Market"), file a
registration statement with the United States Securities and
Exchange Commission (the "SEC") to cause the Shares, as well as
the shares of common stock issuable upon exercise of the Warrants
(the "Warrants Shares"), to be registered under the Securities
Act of 1933, as amended (the "Act"), all to the extent requisite
to permit the sale or other disposition by the PURCHASER of the
Shares and/or the Warrant Shares so registered; provided,
however, that the SELLER may, as a condition precedent to such
registration, require PURCHASER to agree with the SELLER and the
managing underwriter or underwriters of the offering to be made
by the SELLER in connection with such registration that such
PURCHASER will not sell any securities of the same class or
convertible Into the same class as those registered by the SELLER
(including any class into which the securities registered by the
SELLER are convertible) for such reasonable period after such
registration becomes effective (not exceeding 90 days) as shall
then be specified in writing by such underwriter or underwriters
if in the opinion of such underwriter or underwriters the
SELLER's offering would be Materially adversely affected in the
absence of such an agreement. All expenses incurred by SELLER
in complying with this Section, including without limitation all
registration and filing fees, listing fees, printing expenses,
fees and disbursements of all independent accountants, or counsel
for the SELLER 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 SELLER. Notwithstanding the
foregoing, PURCHASER shall pay all underwriting discounts or
commissions with respect to shares sold by the PURCHASER. In the
event that SELLER does not file the Registration Statement within
90 days of the common stock commencing trading on a Trading
Market, SELLER shall pay to PURCHASER a penalty in the amount of
five percent (5%) of the Purchase Price, payable either in cash
or in corrunon stock (at $2.00 per share) of the SELLER, at the
SELLER's discretion, for each 30 days that SELLER fails to comply
herewith, said penalty to be due and payable at the end of each
30 days in which SELLER has not complied. The parties hereto
shall have the right to agree to extend the 90 day period without
the payment of the foregoing penalty for 30 days upon mutual
written consent.
(b) In connection with any registration of securities pursuant
to this Section, SELLER and PURCHASER covenant and agree as
follows:
(i) SELLER shall use its best efforts to cause the Registration
Statement to be declared effective at the earliest possible time,
and shall furnish PURCHASER such number of prospectuses as
PURCHASER shall reasonably request. SELLER shall cause the
Registration Statement to remain effective, and shall file all
post-effective amendments necessary, to cause the Registration
Statement to remain effective for a period of nine months
following the effective date of such registration.
(ii) SELLER shall pay all costs, fees and expenses incurred by
SELLER in connection with the Registration Statement and the
offering thereunder including, without limitation, SELLER's legal
and accounting fees, printing expenses and blue sky fees and
expenses (but excluding discounts or selling commissions of any
underwriter or broker-dealer acting on behalf of PURCHASER).
(iii) SELLER shall use its best efforts to take all necessary
action which may be reasonably required in qualifying or
registering the securities included in the Registration Statement
for offering and sale under the securities or blue sky laws of
states reasonably requested by PURCHASER, provided that SELLER
shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(iv) SELLER shall indemnify PURCHASER and each person, if any,
who controls PURCHASER within the meaning of Section 15 of the
Act or Section 20(a) of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), against all loss, claims,
damage, expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any
claim whatsoever) to which any of them may become subject under
the Act, the Exchange Act or otherwise, arising from the
Registration Statement, in accordance with the terms and
conditions set forth herein.
(v) PURCHASER shall indemnify SELLER, its officers and directors
and each person, if any, who controls SELLER within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act,
against all loss, claim, damage, expense or liability (including
all expenses reasonably incurred in investigation, preparing or
defending against a claim) to which they may become subject under
the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of PURCHASER for specific inclusion in
the Registration Statement, in accordance with the terms and
conditions set forth herein,
(vi) SELLER shall, as soon as practicable after the effective
date of the Registration Statement, and in any event within
fifteen (15) months thereafter, make "generally available to its
security holders" (within the meaning of Rule 158 under the Act)
an earnings statement (which need not be audited) complying with
Section 11(a) of the Act and covering a period of at least twelve
(12) consecutive months beginning after the effective date of the
Registration Statement.
(vii) SELLER shall cause all securities of PURCHASER
registered pursuant to a Registration Statement to be listed on
any national securities exchange or quoted on any automated
quotation system on which similar securities of the Company then
listed or quoted.
(c) If, within 180 days of the date of this Agreement, the
SELLER's common stockis not trading in a Trading Market, then
SELLER shall pay to PURCHASER a penalty in the amount of five
percent (5%) of the Purchase Price for each 30 days that SELLER
fails to comply herewith, payable either in cash or in common
stock (at $2.00 per share) of the SELLER, at the SELLER's
discretion, said penalty to be due and payable at the end of each
30days in which SELLER has not complied. The parties hereto
shall have the right to agree to extend the 180 day period
without the payment of the foregoing penalty for 30 days upon
mutual written consent.
ARTICLE 2
REPRESENTATIONS AND COVENANTS OF SELLER AND PURCHASER
2.1 The SELLER hereby represents and warrants that:
(a) The Shares and Warrants have been duly authorized by the
appropriate corporate action of SELLER.
(b) It shall transfer title, in and to the Shares and the
Warrants, to the 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, except as set forth in Paragraph 2.2
herein.
2.2 On the Closing Date as defined herein itt Section 3.1, the
SELLER shall deliver to the PURCHASER certificates representing
the Shares and the Warrants 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(s), which legend shall provide as
follows:
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 ANY STATE, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF FOR A PERIOD OF ONE YEAR FROM THE ISSUANCE THEREOF
EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND ANY APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS
WRITTEN AGREEMENT OF THE COMPANY AND COMPLIANCE, TO THE EXTENT
APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE
UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES).
2.3. The PURCHASER hereby represents and warrants that:
(a) PURCHASER acknowledges that the Shares and, the Warrants
will be "restricted securities" (as such term is defined in Rule
144 promulgated under the Securities Act of 1933, as amended
("Rule 144")), that the Shares and the Warrants will include the
foregoing restrictive legend, and, except as otherwise set forth
in this Agreement, that the Shares and the Warrants cannot be
sold for a period of one year from the date of issuance unless
registered with the SEC and qualified by appropriate state
securities regulators, or unless PURCHASER obtains written
consent from the SELLER and otherwise complies with an exemption
from. such registration and qualification (including, without
limitation, compliance with Rule 144).
(b) The PURCHASER has the full right, power and authority to
enter into this Agreement and to carry out and consummate the
transaction contemplated herein. This Agreement constitutes the
legal, valid and binding obligation of PURCHASER.
(c) The PURCHASER acknowledges that investment in the Shares and
Warrants involves substantial. risks and is suitable only for
persons of adequate financial means who can bear the economic
risk of an investment in the Shares and Warrants for an
indefinite period of time. PURCHASER further represents that
PURCHASER:
(i) It has adequate means of providing for its current needs and
possible personal contingencies, has no need for liquidity in its
investment in the Shares and Warrants, is able to bear the
substantial economic risks of an investment in the Shares and
Warrants for an indefinite period, and, at the present time, can
afford a complete loss of its investment;
(ii) It is an "Accredited Investor" as that term is defined in
Section 501(a) of Regulation, D promulgated under the Securities
Act of 1933, as amended (the "Act"), in that (i) PURCHASER is a
natural person whose individual net worth, or joint net worth
with PURCHASER's spouse, exceeds $l,000,000 and either he or she
is able to bear the economic risk of investment in the proposed
investments or the proposed investments will not exceed 10% of
his or her net worth or joint net worth with PURCHASER's spouse,
and/or (ii) PURCHASER is a natural person who had individual
income in excess of $200,000 in each of the two most recent
years, or joint income with such investor's spouse in excess of
$300,000 in each of those years and reasonably expects to reach
the same income level in the current year, and either PURCHASER
is able to bear the economic risk of investment in the proposed
investments or the proposed investments will not exceed 10% of
his or her net worth or joint net worth with PURCHASER's spouse;
(iii) Does not have an overall commitment to investments
which are not readily marketable that is disproportionate to its
net worth, and that its investment in the Shares and Warrants
will not cause such overall commitment to become excessive;
(iv) Is acquiring the Shares and Warrants for its own account,
for investment purposes only and not with a view toward resale,
assignment or distribution thereof, and no other person has a
direct or indirect, beneficial interest, in whole or in part, in
such Shares and Warrants;
(v) Has such knowledge and experience in financial, tax and
business matters that its is capable of evaluating the merits and
risks of an investment in the Shares and Warrants;
(vi) Has been given the opportunity to ask questions of and to
receive answers from persons acting on the SELLERS' behalf
concerning the terms and conditions of this transaction and also
has been given the opportunity to obtain any additional
information which the SELLER's possesses or can acquire without
unreasonable effort or expense. As a result, PURCHASER is
cognizant of the financial condition, capitalization, use of
proceeds from this financing and the operations and financial
condition of SELLER, has available full information concerning
their affairs and has been able to evaluate the merits and risks
of the investment in the Shares and Warrants; and
(vii) The funds provided for the PURCHASER's purchase are
either separate property, community property over which the
signatory(ies) hereto has or have the right of control or are
otherwise funds as to which the undersigned has the sole right of
management.
ARTICLE 3
CLOSING AND DELIVERY OF DOCUMIENTS
3.1 Closing. The Closing shall be deemed to have occurred upon
the date of signing of this Agreement. Subsequent to the
signing, the following shall occur as a single integrated
transaction:
3.2 Delivery by SELLER. SELLER shall deliver to the PURCHASER
the stock certificates, Warrants, and any and all other
instruments of conveyance and transfer required by Section l,4).
3.3 Delivery by PURCHASER
(a) The PURCHASER shall deliver the Purchase Price as required
in Section 1,4.
(b) The PURCHASER shall deliver, or cause to be delivered, to
SELLER suchinstruments, documents and certificates as required to be
delivered by the PURCHASER or its representatives pursuant to the
provisions of this Agreement.
ARTICLE 4
TERMINATION, WAIVER AND AMENDMENT
4.1 Termination. Notwithstanding anything to the contrary
contained in this Agreement, this Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time
prior to delivery of the Purchase Price solely by the mutual
consent of all of the parties with no further obligation or cost
to either party.
4.2 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.
ARTICLE 5
MISCELLANEOUS
5.l Board of Directors. As a material term of this Agreement,
SELLER agrees that PURCHASER will be offered one (1) seat for its
representative on SELLER's Board of Directors, subject to the
terms and conditions set forth in the Bylaws of SELLER, and that
SELLER will cause such representative to be elected to the Board
of Directors of SELLER for a period of two (2) years.
5.2 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.
5.3 Notices. All notices provided for in this Agreement shall
be in writing signed by the party giving such notice, and
delivered personally or sent by overnight courier or messenger or
sent by registered or certified mail (air mail if overseas),
return receipt requested, or by telex, facsimile transmission,
telegram or similar means of communication. Notices shall be
deemed to have been received on the date of personal delivery,
telex, facsimile transmission, telegram or similar means of
communication, or if sent by overnight courier or messenger,
shall be deemed to have been received on. the next delivery day
after deposit with the courier or messenger, or if sent by
certified or registered mail, return. receipt requested, shall be
deemed to have been received on the third business day after the
date of mailing. Notices shall bc sent to the addresses set
forth below:
If to SELLER:
GolfGear International, Inc.
0000-X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxx Xxxxxxxx
Facsimile (000) 000-0000
With a copy to
Xxx, Offices of Xxxxxxx X. Xxxxxxx, Esq,
Transworld Bank Plaza
00000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
And a copy to
The Law Offices of M. Xxxxxxx Xxxxxx, Esq.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: M. Xxxxxxx Xxxxxx, Esq.
Facsimile (000) 000-0000
If to PURCHASER:
Berkeley Investment Group, Ltd.
XX. Xxxxxxxxxx
Xxxx 0 XXX 0-0
Xxxxxxx, Xxxxxxxxx
Attention: Xxxxxx Xxxxxxx
5.4 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.
5.5 Jurisdiction. The parties submit to the jurisdiction of the
Courts of the State of California or a Federal Courts located in
the State of California for the resolution of all legal disputes
arising under the terms of this Agreemen4 including, but not
limited to, enforcement of any arbitration award.
5.6 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.
5.7 Attorneys' Fees. In the event of any litigation arising
between the parties, the prevailing party shall be reimbursed by
the nonprevailing 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.
5.8 Tax. 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.
IN WITNESS WHERFOF, the parties hereto have executed this
Agreement, as of the day first written hereinabove.
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
BERKELEY INVESTMENT GROUP, LTD.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
EXHIBIT A
WARRANT AGREEMIENT
This Warrant Agreement, dated as of September 15, 1997, is by and
between Berkeley Investment Group, Ltd. ("Warrantholder") and
GolfGear International, Inc., a Nevada corporation ("Company").
WHEREAS, the Company proposes to issue to Warrantholder 300,000
warrants (the "Warrants"), each such Warrant entitling the holder
thereof to purchase one share of Common Stock, par value $.001
per share, of the Company (the "Shares" or the "Common Stock") at
$1.00 exercise price per share.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 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. The warrant certificates
shall be executed on behalf of the Company by its Chief Executive
Officer, President or any Vice President under its corporate seal
reproduced thereon and attested by its corporate secretary or one
of its assistant secretaries. Warrant Certificates may be
exchanged at the Warrantholder's option, when surrendered to the
Company for another Warrant Certificate or other Warrant
Certificates of like tenor and representing in the aggregate a
like number of Warrants.
SECTION 2. Right to Exercise Warrants. Each Warrant maybe
exercised from the date of this Agreement until 11:59 P.M . (Los
Angeles time) on the date that is three years after the date of
this Agreement (the "Expiration Date"). Each Warrant not
exercised on or before the Expiration Date shall expire. Subject
to the provisions of this Warrant Agreement, including Section 10
hereof, the holder of each Warrant shall have the right to
purchase from the Company, and the Company shall issue and sell
to each such Warrantholder, at an initial price of $1.00 per
Share, subject to adjustment as provided herein (the "Exercise
Price"), one fully paid and nonassessable Share upon surrender to
the Company of the Warrant Certificate evidencing such Warrant
with the form of election to purchase duly completed and signed
and evidence of payment of the Exercise Price.
Upon surrender of such Warrant Certificate and payment of the
Exercise Price, the Company shall cause to be issued and
delivered promptly to the Warrantholder a Certificate for the
Shares issuable upon the exercise of the Warrant or Warrants
evidenced by such Warrant Certificate. The Warrants evidenced by
a Warrant Certificate shall be exercisable at the election of the
Warrantholder thereof, either as an entirety or from time to time
for less than all of the number of Warrants specified in the
Warrant Certificate.
SECTION 3. Right to Call Exercise of Warrants. In the event
that the closing bid price of the Company's common stock on a
nationally-recognized and reported stock market equals or exceeds
$4.00 per share for 20 consecutive trading days, the Company
shall have the right to notify Warrantholder of the Company's
requirement that Warrantholder exercise the Warrants. Company
shall provide notice to Warrantholder of such event as set forth
herein and Warrantholder shall have 20 trading days from the
effectiveness of such notice to exercise the Warrants as set
forth in Section 2 herein. In the event Warrantholder fails to
exercise the Warrants during such period, the Company shall have
the right to redeem any and all Warrants which remain outstanding
at the redemption price of $.05 per Warrant.
SECTION 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 any 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.
SECTION 5. Registration under the Securities Act of 1933.
Purchaser represents and warrants to the Company that Purchaser
is acquiring the Warrants for investment and with no present
intention of distributing or reselling any of the Warrants. The
Shares and the certificate or certificates evidencing any such
Shares shall bear the following legend:
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 ANY STATE, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF FOR A PERIOD OF ONE YEAR FROM THE ISSUANCE THEREOF
EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND ANY APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS
WRITTEN AGREEMENT OF THE COMPANY AND COMPLIANCE, TO THE EXTENT
APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE
UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES).
Certificates for Shares without such legend shall be issued if
such shares are sold pursuant to an effective registration
statement under 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.
Certificates for Warrants or Shares sba.11 also bear such legends
as may be required from time to time by law.
SECTION 6. Registration Rights. The Common Stock issuable
upon exercise of the Warrants shall have such registration rights
as set forth in that certain Stock and Warrant Purchase Agreement
between the Company and Purchaser of even date herewith.
SECTION 7. Rule 144. If the Company shall be subject to the
reporting requirements of Section 13 of the 1934 Act, the Company
will use its best efforts to timely file all reports required to
be filed from time to time with the U.S. Securities and Exchange
Commission (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 Commission under the Act). If
there is a public market for any Shares 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 any holder of any Shares or Warrants,
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 each holder of any shares
or Warrants, 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
such holder to complete any Form 144 required to be filed with
the Commission pursuant to said Rule 144.
SECTION 8. Adjustment of Exercise Price and Number of Shares
and Class of Capital Stock Purchasable. The Exercise Price and
the number of Shares and classes of capital stock of the Company
purchasable upon the exercise of each Warrant are subject to
adjustment from time to time as set forth in this Section 8.
(a) Adjustment for Changes to Capital Stock. If the Company:
(1) pays a dividend or makes a distribution on its Common Stock,
in each case, in shares of its Common Stock, (2) subdivides its
outstanding shares of Common Stock into a greater number of
shares; (3) combines its outstanding shares of Common Stock into
a smaller number of shares; (4) makes a distribution on its
Common Stock in shares of its capital stock other than Common
Stock; or (5) 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.
(b) Adjustment for Other Distributions. If the Company
distributes to all holders of shares of its Common Stock any of
its assets or debt securities or any rights or warrants to the
purchase assets, debt securities or other securities of the
Company, the Company shall, at the option of each Warrantholder,
either:
(1) distribute to each Warrantholder, on the date of
distribution, to the shareholders, the amount of such assets or
debt securities or the number of such rights or warrants, pro
rata, determined in accordance the following formula.,
X' = X x W
O + W
where
X' = the amount of assets or debt securities or the number of
rights or warrants to be distributed to such Warrantholder, as
the case may be.
X = the total amount of assets or debt securities or the total
number of rights or warrants to be distributed, as the case may
be.
W = the number of shares of Common Stock purchasable upon
exercise of the Warrant held by such Warrantholder outstanding on
the record date set forth below. or
(2) adjust the Exercise Price in accordance with the
following formula:
C' = C x (O x M) - F
O x M
where
C' = the adjusted Exercise Price.
C = the Exercise Price on the record date set forth below.
O = the number of shares of Common Stock outstanding on the
record date set forth below.
M = the Current Market Price per share of Common Stock on the
date set forth below.
F = the fair market value on the record date of the distribution
of the assets, securities, rights or warrants. The Board of
Directors of the Company shall in good faith determine such fair
market value.
(c) 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.
SECTION 9. Notices. Any notice or demand authorized by this
Agreement to be given or made by any registered holder of any
Warrant Certificate to or on the Company shall be sufficiently
given or made if sent by registered mail, postage prepaid,
addressed (until another address is filed in writing by the
Company with the holders) to the Company as follows:
GolfGear International, Inc.
0000X Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxx Xxxxxxxx
Facsimile No.: (000) 000-0000
Copy to:
Law Offices of Xxxxxxx X. Xxxxxxx, Esq.
Transworld Bank Plaza
00000 Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Berkeley Investment Group, Ltd.
XX. Xxxxxxxxxx
Xxxx 0 XXX 0-0
Xxxxxxx, Xxxxxxxxx
Attention: Xxxxxx Xxxxxxx
Any notice pursuant to this Agreement to be given by the Company
to Purchaser shall be sufficiently given if sent by registered
mail, postage prepaid, addressed (until another address is filed
in writing by Purchaser with the Company) to Purchaser as
follows:
SECTION 10. Supplements and Amendments. The Company and
Purchaser may from time, to time supplement or amend this
Agreement without the approval of any Warrantholders (other than
Purchaser) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective
or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder
which the Company and Purchaser may deem necessary or desirable
and which the Company and Purchaser deem shall not adversely
affect the interests of the Warrantliolders.
SECTION 11. Successors, All the covenants and provisions of
this Agreement by or for the benefit of the Company or Purchaser
shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 12. Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of California and for all
proposes shall be governed by and construed in accordance with
the laws of said State.
SECTION 13. 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 one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the date and year first above written.
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
BERKELEY INVESTMENT GROUP, LTD.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
SCHEDULE A
[FORM OF WARRANT CERTIFICATE]
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 1993. THE
WARRANTS, SHARES OR OTHER SECURITIES 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.
EXERCISABLE FROM 12:00 P.M. LOS ANGELES TIME,
ON SEPTEMBER 15, 1997 UNTIL
11:59 P.M., LOS ANGELES TIME ON SEPTEMBER 15, 2000
300,000 Warrants
WARRANT CERTIFICATE
GOLFGEAR INTERNATIONAL, INC.
This Warrant Certificate certifies that Berkeley Investment
Group, Ltd. ('Purchaser") or registered assigns, is the
registered holder of 300,000 Warrants (the "Warrants") expiring
September 15, 2000, (the "Expiration Date"), to purchase Common
Stock, par value $.001 per share (the "Common Stock') of GolfGear
International, Inc., a Nevada corporation (the "Company"). Each
Warrant entities the holder to purchase from the Company before
11:59 p.m. (Los Angeles time) on the "Expiration Date" one fully
paid and nonassessable share of the Common Stock of the Company
at the initial exercise price for each Warrant, subject to
adjustment in certain events (the "Exercise Price"), of $1.00
upon surrender of this Warrant Certificate and payment of the
Exercise Price at an office or agency of the Company, but only
subject to the terms and conditions set forth herein and in the
Warrant Agreement. As used herein, "Share" or "Shares" refers to
the Common Stock of the Company and, where appropriate, to the
other securities or property issuable upon exercise of a Warrant
as provided for in the Warrant Agreement upon the happening of
certain events. The Exercise,, Price and the number of Shares
and classes of capital stock purchasable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain
events set forth in the Warrant Agreement. In the event that
upon any exercise of Warrants evidenced hereby, the number of
Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder
hereof or his or her assignee a new Warrant Certificate
evidencing the number of Warrants not exercised, No adjustment
shall be made for any cash dividends on any Shares issuable upon
exercise of this Warrant.
No Warrant may be exercised after 11:59 P.M. (Los Angeles Time)
on the Expiration Date- All Warrants evidenced hereby shall
thereafter be void.
The Company may deem and treat the person(s) registered in the
Company's register as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any exercise
hereof, and of any distribution to the bolder(s) hereof, and for
all purposes, and the Company shall not be affected by any notice
to the contrary,
All terms used in this Warrant Certificate which are defined in
the Warrant Agreement shall have the meaning assigned to them in
the Warrant Agreement.
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 ANY STATE, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF FOR A PERIOD OF ONE YEAR FROM THE ISSUANCE THEREOF
EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND ANY APPLICABLE STATE LAWS OR (ii) UPON THE EXPRESS
WRITTEN AGREEMENT OF THE COMPANY AND COMPLIANCE, TO THE EXTENT
APPLICABLE, WITH RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE
UNDER THE ACT RFLATRNG TO THE DISPOSITION OF SECURITIES.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated: September 15, 1997
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
SCHEDULE B
[FORM OF ELECTION TO PURCHASE]
(To be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right
represented by this Shares and herewith delivers in payment for
such all in accordance with the terms hereof. The undersigned
requests that certificates for such Shares be registered in the
name of whose address is and that such certificates be delivered
to _______________________________________, whose address is
____________________________________________. If said number of
Shares is less than all of the Shares purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing
the remaining balance of the Shares be registered in the name of
_________________________________, whose address is
___________________________and that such Certificates be
delivered to ________________________________________, whose
address is ____________________________________________.
Dated:
Signature:
(Signature must conform in all respects to name of holder as
specified on a the face of the Warrant Certificate)
AMENDMENT TOSTOCK AND WARRANT PURCHASE AGREEMENT
AND WARRANT AGREEMENT
This Amendment to the Stock and Warrant Purchase Agreement and
Warrant Agreement is made effective this 15th day of February,
1998, by and between Berkeley Investment Group, Ltd.
("PURCHASER") and GolfGear International, Inc. ("SELLER"), a
Nevada corporation, based on the following recitals, conditions
and covenants:
WHEREAS, on or about September 15, 1998 PURCHASER AND SELLER
executed a document entitled "Stock and Warrant Purchase
Agreement";
WHEREAS, on or about September 15, 1997, SELLER executed a
document entitled "Warrant Agreement" in favor of PURCHASER
entitling PURCHASER to purchase up to three hundred thousand
(300,000) shares of common stock of SELLER at one dollar ($ 1.00)
per share;
WHEREAS, PURCHASER desires to amend the Stock and Warrant
Purchase Agreement and the Warrant Agreement;
WHEREAS, SELLER desires to amend the Stock and Warrant Purchase
Agreement and the Warrant Agreement;
WHEREAS, it is the intention of the parties to delete any demand
registration lights and penalties associated with the Stock and
Warrant Purchase Agreement and the Warrant Agreement; and
WIIEREAS, it is the intention of the parties to grant to
PURCHASER piggyback registration rights with respect to the Stock
and Warrant Purchase Agreement and the Warrant Agreement.
NOW, THEREFORE, in consideration of the promises and valuable
consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. Amendment to Stock and Warrant Purchase Agreement.
Article 1, Paragraph 1.5 entitled "Additional Terms and
Conditions", including all subparagraphs, shall be deleted in its
entirely relating to demand registration rights and penalties
relating thereto. In place of Article 1, Paragraph 1.5, the
following shall be inserted:
(a) Registration Rights. If, any time after the issuance of the
Shares or Warrant Shares, the Company shall determine to register
any of its securities either for its own account or the account
of the PURCHASER, except for a registration relating solely to
employee benefit plans, a registration relating solely to a Rule
145 transaction, registration statement S-8, a registration oil
any registration form that would not permit secondary sales of
any Common Stock issued hereunder or acquired through the
exercise of the Warrant (the "Registrable Shares") or a
registration filed more than five years after the date of the
Shares or Warrant Shares, the Company will, in such instance: (i)
promptly give to PURCHASER written notice thereof; (ii) use its
best efforts to include in such registration (and any related
qualification under blue sky laws or other compliance), except as
set forth in l(b) below, and in any underwriting involved
therein, all the Registrable Shares specified in a written
request or requests made by PURCHASER within fifteen (15) days
after the written notice from the Company described in clause (i)
above is given to PURCHASER. Such written request may specify
all or a part of PURCHASER's Registrable Shares.
(b) Underwritten Offering. If the registration of which the
Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise PURCHASER
as a part of the written notice given pursuant to Section
1.5(a)(i). In such event, the right of PURCHASER to registration
pursuant to this Section 1.5(a) shall be conditioned upon
PURCHASER's participation in such underwriting and the inclusion
of PUCHASER's Registrable Shares in the underwriting to the
extent provided herein. If PURCHASER proposes to distribute its
securities through the underwriting, it shall (together with the
Company and any other persons proposing to distribute its
securities through the underwriting) enter into all underwriting
agreement in customary form with the representative of the
underwriter(s) selected by the Company. Notwithstanding any
other provision of this Section 1.5(a), if the representative of
the underwriter(s) advises the Company in writing that marketing
factors require a limitation on the number of shares to be
underwritten, the representative may (subject to the limitations
set forth below) limit the number of Registrable Shares to be
included in the registration and underwriting. The Company shall
so advise PURCHASER if PURCHASER requests to participate in the
registration and the number of shares that may be included in the
registration and underwriting shall be allocated: First, to the
Company for securities being sold for its own account; second,
among Registrable Shares held by PURCHASER who has requested
inclusion in the registration in proportion, as nearly as
practicable, to the respective amounts of Registrable Shares held
by PURCHASER and property requested to be included at the time of
filing the registration statement; and then to shares being sold
for the accounts of other persons. Any Registrable Shares so
excluded from the underwriting by reason of the representative's
limitation shall be withdrawn from such registration. To
facilitate the allocation of shares in accordance with the above
provisions, the Company or the representative of the
underwriter(s) may round the number of shares allocated to
PURCHASER or other shareholder to tile nearest 100 shares. If
PURCHASER has requested inclusion in the registration does not
agree to the terms of the underwriting, PURCHASER's shares may be
excluded from the underwriting by written notice from the Company
or the representative of the underwriter(s) and the shares so
excluded shall be withdrawn from the registration. If shares are
so excluded from the underwriting because of a failure to agree
to its terms and the number of shares of Registrable Shares to be
included in the underwriting was previously reduced as a result
of marketing factors pursuant to this Section 1.5(b), then, with
the permission of the representative of the underwriter(s), the
Company shall offer to PURCHASER to include Registrable Shares in
the underwriting, the right to include additional Registrable
Shares in ail aggregate amount equal to the number of shares so
excluded. The registration of such additional Registrable Shares
shall be allocated to PURCHASER pro rata in accordance with the
numbers of its Registrable Shares which are otherwise to be
included in the registration.
(c) Registration Expenses. The Company will pay the costs and
expenses incident to the performance of its obligations under
this Paragraph 1.5(a), including the fees and expenses of its
counsel, the fees and expenses of its accountants, and all other
costs and expenses incident to the preparation, printing and
filing under the Securities Act of 1933, as amended, of any such
Registration Statement, each prospectus and all amendments and
supplements thereof, the costs incurred in connection with the
qualification of the securities under the laws of various
jurisdictions (including fees and disbursements of counsel to the
Company), the cost of' furnishing to PURCHASER copies of any such
Registration Statement, each preliminary prospectus, the final
prospectus and each amendment and supplement thererto, all
expenses incident to delivery of the security to any
underwriter(s), but not any underwriting commissions or discounts
or non-accountable expense allowances charged to PURCHASER.
(d) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it
under this Section 1.5(a) prior to the registration's
effectiveness, whether or not PURCHASER has elected under this
Section 1.5(a) to include shares in the registration.
2. Net Issue Exercise
Notwithstanding any provisions in this Warrant to the contrary,
in lieu of exercising this Warrant for cash, the Holder shall
have the right, upon its written request delivered or transmitted
to the Company together with this Warrant, to exchange, this
Warrant, in whole or in part at any time or from time to time on
or prior to the Expiration Date, for a number of shares of Common
Stock having an aggregate fair market value on the date of such
exchange equal to the difference between (i) the aggregate fair
market value on the date of such exchange of the number of
Warrant Shares designated by the Holder to be canceled and (ii)
the aggregate Exercise Price the Holder would have paid to the
Company to purchase such designated number of Warrant Shares,
and, if a balance of purchasable Warrant Shares remains after
such exchange, the Company shall execute and deliver to the
Holder a new Warrant evidencing the right of the Holder to
purchase such balance of Warrant Shares. No payment of any cash
or other consideration shall be required. Such exchange shall be
effective upon the date of receipt by the Company of the original
Warrant surrendered for cancellation and a written request from
the Holder that the exchange pursuant to this subsection be made,
or at such later date as may be specified in such request.
3. Amendment to Warrant Agreement and Warrant Certificate.
The Warrant Agreement and Warrant Certificate shall entitle
PURCHASER to an additional 330,000 warrants.
All other terms, conditions, and obligations of the Stock and
Warrant Purchase Agreement, Warrant Agreement and Warrant
Certificate shall remain the same.
GOLFGEAR INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
BERKELEY INVESTMENT GROUP, LTD.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
