Exhibit 1
LANCER ORTHODONTICS, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of the
date indicated below, by and between Lancer Orthodontics, Inc., a California
corporation (the "Company"), and the undersigned investor ("Investor").
1. Stock Purchase.
At the closing, the Company ("xxx Xxxxxxx") will issue and sell to Investor,
and Investor shall purchase from the Company, ______________________________
(____,______) restricted shares (the "Shares") of Common Stock, no par
value, of the Company (the "Common Stock") at a purchase price (the
"Purchase Price") of Sixty cents ($0.60) per share. At the Closing, the
Company shall also issue to Investor a five-year warrant (the "Warrants") to
purchase one (1) share (the "Warrant Shares") of the Company's restricted
Common Stock at a per share exercise price of Eighty Five cents ($0.85) for
each Share purchased. The Closing shall occur at such time as Investor
delivers to the Company an original executed signature page of this
Agreement along with the Purchase Price, payable in immediately available
funds. Notwithstanding the preceding, this Agreement shall terminate and
have no further force or effect unless the Closing occurs on or before_______,
2004.
2. Representations and Warranties of the Company.
The Company hereby represents and warrants to Investor as follows:
(a) Organization and Standing. The Company is a corporation duly organized
and existing under, and by virtue of, the laws of the State of California and
is in good standing under such laws. The Company has requisite corporate
power to own and operate its properties and assets.
(b) Corporate Power. The Company has all requisite legal and corporate
power to execute and deliver this Agreement, to sell and issue the Shares,
and to carry out and perform its obligations under the terms of this
Agreement.
(c) Authorization. All corporate action on the part of the Company, its
directors and shareholders necessary for the authorization, execution,
delivery and performance of this Agreement by the Company, the authorization,
sale, issuance and delivery of the Shares and the performance of the
Company's obligations hereunder has been taken. This Agreement, when
executed and delivered by the Company, shall constitute the valid and
binding obligation of the Company enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors, rules of law governing specific performance,
injunctive relief or other equitable remedies, and limitations of public
policy.
(d) Valid Issuance of Common Stock. The Shares being purchased by
Investor hereunder when issued, sold and delivered, in accordance with the
terms of this Agreement for the consideration expressed herein, will be duly
and validly issued, fully paid and nonassessable. The Warrant Shares when
issued, sold and delivered, in accordance with the terms of the Warrants,
will be duly and validly issued, fully paid and nonassessable.
3. Investor Representations and Warranties.
Investor hereby represents and warrants to the Company and agrees as follows:
(a) Investor represents and warrants to the Company that Investor is an
"accredited investor", within the meaning of Securities and Exchange
Commission Rule 501 of Regulation D, as presently in effect or is an Officer
or Director of the Company.
(b) The execution, delivery, and performance by the Investor under this
Agreement and the consummation of the transactions contemplated hereby will
not (i) violate any provision of law, statute, rule or regulation, or any
ruling, writ, injunction, order, judgement or decree of any court,
administrative agency or other governmental body applicable to Investor, or
(ii) result in any violation or conflict with or constitute a default under
any instrument, judgement, order, writ, decree or contract applicable to
Investor.
(c) This Agreement is made in reliance upon Investor's representation
to the Company, which by execution of this Agreement Investor hereby
confirms, that the Shares, the Warrants, and the Warrant Shares to be
received by Investor will be acquired for investment for Investor's account,
not as a nominee or agent, and not with a view to the sale or distribution
of any part thereof, and that Investor has no present intention of selling,
granting participation in, or otherwise distributing any of the Shares, the
Warrants, or the Warrant Shares.
(d) Investor understands that the Shares, the Warrants, and the Warrant
Shares are not registered under the Securities Act of 1933, as amended (the
"1933 Act"), on the basis that the sale provided for in this Agreement and
the issuance of Shares and Warrants hereunder and the issuance of Warrant
Shares pursuant to the proper exercise of the Warrants are exempt from
registration under the 1933 Act pursuant to Section 4(2) thereof, and that
the Company's reliance on such exemption is predicated on Investor's
representations set forth herein. Investor realizes that the basis for the
exemption may not be present if, notwithstanding such representations,
Investor has in mind merely acquiring the Shares, the Warrants, or the
Warrant Shares for a fixed or determinable period in the future, or for a
market rise, or for sale if the market does not rise. Investor does not
have any such intention.
(e) Investor understands that the Shares, the Warrants, and the
Warrant Shares may not be sold, transferred, or otherwise disposed of
without registration under the 1933 Act or an exemption therefrom, and that
in the absence of an effective registration statement covering the Shares,
the Warrants, and the Warrant Shares or an available exemption from
registration under the 1933 Act, the Shares, the Warrants, and the Warrant
Shares must be held indefinitely. In particular, Investor is aware that the
Shares and the Warrant Shares may not be sold pursuant to Rule 144
promulgated under the 1933 Act unless all of the conditions of the
applicable Rules are met. Among the conditions for use of Rule 144 is the
availability of current information to the public about the Company.
Investor represents that, in the absence of an effective registration
statement covering the Shares, the Warrants, and the Warrant Shares, it will
sell, transfer, or otherwise dispose of the Shares, the Warrants, and the
Warrant Shares only in a manner consistent with its representations set
forth herein and then only in accordance with the 1933 Act.
(f) Investor has adequate means of providing for its current needs and
personal contingencies and has no need for liquidity in its investment in
the Shares, the Warrants, and the Warrant Shares.
(g) Investor has full power and authority to enter into this Agreement
and this Agreement constitutes a valid and legally binding obligation of
the Investor.
(h) Investor has had the opportunity of asking such question(s) to the
Company that the Investor believes is required for purchasing the Shares,
the Warrants, and the Warrant Shares and has received such answers as the
Investor has deemed satisfactory.
(i) Investor agrees to be bound to the attached Confidentiality
Agreement between the Investor and the Company.
4. Legends.
(a) All certificates for the Shares, the Warrants, and the Warrant
Shares shall bear substantially the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) The certificates for the Shares, the Warrants, and the Warrant
Shares shall also bear any other legends required by applicable state
corporate or securities laws.
5. Lock-Up Agreement.
Investor, if requested by the Company or the lead underwriter of any public
offering of the Common Stock or other securities of the Company (the "Lead
Underwriter"), hereby irrevocably agrees to enter into a customary Lock-Up
Agreement with the Company and Lead Underwriter providing that the Investor
shall not sell, contract to sell, grant any option to purchase, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise
transfer or dispose of any interest in any Common Stock of the Company or
any securities convertible into or exchangeable or exercisable for or any
other rights to purchase or acquire Common Stock of the Company (except
Common Stock included in such public offering or acquired on the public
market after such offering) during the period requested by the Lead
Underwriter following the effective date of a registration statement of the
Company filed under the 1933 Act or such shorter period of time as the Lead
Underwriter shall specify. Each Investor further agrees to sign such
documents as may be requested by the Lead Underwriter to further effect the
foregoing and agrees that the Company may impose stop-transfer instructions
with respect to such securities until the end of such period. The Company
and the Investor acknowledge that each Lead Underwriter of a public offering
of the Company's stock, during the period of such offering and the period
requested by the Lead Underwriter thereafter, is an intended beneficiary of
this Section 5.
6. California Law.
The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of California.
7. Notice.
Any notice required to be given under the terms of this Agreement shall be
addressed to the Company in care of its Secretary at:
Lancer Orthodontics, Inc.
000 Xxxxxx Xxx
Xxx Xxxxxx, XX 00000
and any notice to be given to Investor shall be addressed to him at the
address given by Investor beneath Investor's signature to this Agreement, or
such other address as either party to this Agreement may hereafter designate
in writing to the other. Any such notice shall be deemed to have been duly
given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, registered or certified and deposited (postage or registration or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States.
8. Successors.
This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company.
9. Entire Agreement.
The parties intend that the terms of this Agreement and the Warrant issued
pursuant hereto shall be the final expression of their agreement with respect
to the subject matter hereof and may not be contradicted by evidence of any
prior or contemporaneous agreement. No party shall be liable or bound to any
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein. The parties further intend that
this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding involving this Agreement.
10. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Subscription Agreement as of the date indicated below.
COMPANY:
LANCER ORTHODONTICS, INC.,
a California corporation
By: _______________________________
Dated: _____________________ Xxxxxxx X. Xxxxx
Chief Executive Officer
INVESTOR SIGNATURES ATTACHED
INVESTOR SIGNATURE PAGE
LANCER ORTHODONTICS, INC.
STOCK PURCHASE AGREEMENT
INVESTOR:
By: _____________________________
(signature)
Name:____________________________
(Print Name)
Address: ________________________
_________________________________
_________________________________
_________________________________
Note: Form 10KSB and 3 latest 10Q's attached
CONFIDENTIALITY AGREEMENT
CONFIDENTIALITY AGREEMENT, effective as of March ____, 2004, by and
between Lancer Orthodontics, Inc., a California Corporation ( hereinafter
"COMPANY") with offices at 000 Xxxxxx Xxxxxx, Xxx Xxxxxx, XX 00000 and
________________________________, (hereinafter "INVESTOR") an individual
with the principal address at
________________________________________________________________________.
Background. In furtherance of discussions between INVESTOR and
COMPANY relating to the Company's financial performance, financial
statements, and the Stock Purchase Agreement ("the Program"), it may be
necessary or desirable for COMPANY ("Disclosing Party") to disclose certain
information to INVESTOR ("Receiving Party") which the Disclosing Party
regards as confidential and the Receiving Party has agreed to treat as
confidential information of the Disclosing Party.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. Confidential Information. As used herein the term "Confidential
Information" shall mean any and all confidential, proprietary, or trade
secret information or material of Disclosing Party and any derivatives,
portions, or copies, thereof, including, without limitation, information
resulting from or in any way related to (i) the Program; (ii) the business
practices or relationships, procedures, property, methods of operation,
future plans, financial information, customer or supplier information,
medical or scientific data, or other proprietary data of Disclosing Party;
(iii) the marketing plans, pricing policies, products, systems, discoveries,
designs, ideas, concepts, inventions, innovations, improvements, plans,
software, program flowcharts, files layouts, source code, technical
"know-how", and other information related thereto, of Disclosing Party; and
(iv) any information or material that Disclosing Party designates as
Confidential Information or which bears or contains a marking or legend
indicating that it is confidential, proprietary, or trade secret information
or material. Confidential Information may be disclosed either orally,
visually, in writing, or by delivery of materials containing Confidential
Information. When disclosed orally or visually, such information shall be
designated as "confidential," "proprietary," or the like at the time of
disclosure and with subsequent written confirmation within thirty days
thereafter, referencing the date and the type of information disclosed.
When disclosed in writing or by delivery of materials, the writing or
materials shall be designated as "confidential," "proprietary," or the like
at the time of disclosure.
2. Obligations of Receiving Party. Receiving Party shall (i) not use
any Confidential Information except as required for the performance of its
duties directly related to the Program, and (ii) not disclose Confidential
Information to any third party without the prior written consent of
Disclosing Party. Notwithstanding the foregoing, Receiving Party may
disclose to its subsidiaries or parent companies, on a need to know basis,
Confidential Information disclosed to it by Disclosing Party under this
Agreement, provided that each such subsidiary or parent shall first agree in
writing to be bound by the terms and conditions of this Agreement to the
same extent as the parties hereto are bound. Receiving Party shall be
liable for any breach of the terms of this Agreement by any of its
subsidiaries or parent companies. Receiving Party shall maintain the
Confidential Information with at least the same degree of care that Receiving
Party uses to protect its own confidential and proprietary information, but
no less than a reasonable degree of care under the circumstances would
warrant. Receiving Party shall neither disclose nor copy Confidential
Information except as necessary for its employees with a need to know. Any
copies of Confidential Information which are made by Receiving Party shall
be identified as belonging to Disclosing Party and shall be marked
"confidential," proprietary," or the like.
3. Exceptions to Confidentiality. Receiving Party's obligations set
forth in Section 2 shall not extend to any material which is:
(a) in the public domain, other than by a breach of this Agreement
on the part of Receiving Party;
(b) rightfully received from a third party without any obligation of
confidentiality;
(c) rightfully known to Receiving Party without any limitation on use
or disclosure prior to its receipt from Disclosing Party; or
(d) generally made available to third parties by Disclosing Party
without restriction on disclosure.
Information disclosed or made available to Receiving Party by Disclosing
Party hereunder shall be presumed to be Confidential Information and the
burden of establishing that such information comes within the foregoing
exceptions to Receiving Party's obligations of confidentiality shall rest
with Receiving Party. Information disclosed to Receiving Party hereunder
shall not be deemed by Receiving Party to be available to the public or in
the prior possession of Receiving Party merely because it is embraced by
more general information available to the public or in the prior possession
of Receiving Party. Furthermore, any combination of known information shall
be within the scope of this Section 3 only if the combination, as such, is
within the scope of this Section 3.
4. Compliance with Law. This Agreement shall not be deemed to
restrict Receiving Party from complying with a lawfully issued governmental
order or decree or any other legal requirement to produce or disclose
Confidential Information. Receiving Party shall promptly notify Disclosing
Party of any such request so that Disclosing Party may seek an appropriate
protective order. Receiving Party warrants that it shall cooperate fully
with Disclosing Party in seeking any protective order. If Disclosing Party
is unable to obtain such protective order, Receiving Party shall furnish
only that portion of the Confidential Information which Receiving Party is
advised by written opinion of counsel is legally required by law to be
disclosed and Receiving Party shall exercise its best efforts to obtain a
protective order or other reliable assurance that confidential treatment
will be accorded to the Confidential Information so disclosed.
5. Return of Confidential Information. Upon request from Disclosing
Party, Receiving Party shall return to Disclosing Party all Confidential
Information and cause all copies and summaries and synopses thereof to be
returned or destroyed. Such destruction shall be confirmed in writing by
Receiving Party to Disclosing Party.
6. Period of Confidentiality. Disclosing Party shall not assert any
claims against Receiving Party for disclosure of Confidential Information
made by Receiving Party more than seven years from the date Disclosing
Party discloses Confidential Information to Receiving Party.
7. Title. Receiving Party agrees that any and all Confidential
Information is and shall continue to be the sole and exclusive property of
Disclosing Party and that title and the right to possess Confidential
Information shall at all times remain with Disclosing Party. No right or
interest of any kind in Confidential Information is transferred to
Receiving Party under this Agreement and any such transfer shall be made
only by separate and specific agreement.
8. No Obligation of Disclosure. Neither party shall have any
obligation to disclose Confidential Information to the other party. Either
party may, at any time, cease disclosing Confidential Information to the
other party without any liability.
9. Equitable Relief. Receiving Party acknowledges that money damages
would not be a sufficient remedy for breach of this Agreement and that
Disclosing Party shall be entitled to seek preliminary and permanent
injunctive relief for any such breach without having to prove actual damages
or to post a bond and that Disclosing Party shall also be entitled to seek an
equitable accounting of all such earnings, profits and other benefits arising
from any such breach, which rights shall be cumulative and in addition to any
other rights or remedies to which Disclosing Party may be entitled in law and
or equity. If Disclosing Party enforces Receiving Party's obligations
hereunder, Receiving Party shall reimburse Disclosing Party for all
reasonable costs and expenses, including attorney's fees, incurred by
Disclosing Party in this regard.
10. Enforcement. Each of the parties shall have the right at all
times to enforce the provisions of this Agreement in strict accordance with
the terms hereof notwithstanding any conduct or custom on its part in
refraining from doing so at any time. The failure of either party at any
time to enforce its rights hereunder strictly in accordance with the same
shall not be construed as having created a custom contrary to the specific
provisions hereof or as having in any way modified or waived the same.
11. Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and construed under the laws of
the State of California without reference to principles of conflicts of laws.
12. Notices. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or sent by
a telegram or a telecopy (with transmission confirmed) or by registered or
certified mail, return receipt requested and postage prepaid, or by Federal
Express or any equivalent overnight delivery service, addressed to the
parties at their respective addresses first set forth above or to such other
addresses at which notice of change shall have been given. Such notice,
request, demand, waiver, consent, approval, or other communication shall be
deemed to have been given as of the date so delivered, telegraphed or faxed,
or on the fifth day after deposit in the United States mail, or on the
second day after deposit with Federal Express or an equivalent overnight
delivery service.
13. Headings. The headings in this Agreement are for convenience
only and do not in any way limit or amplify the terms or conditions in this
Agreement.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and all
prior agreements with respect thereto are superseded hereby. No amendment or
modifications hereof shall be binding unless in writing and duly executed by
authorized representatives of both parties.
15. Severability. The provisions of this Agreement shall be several,
and if any provision of this Agreement is held to be invalid or
unenforceable, it shall be construed to have the broadest interpretation
which would make it valid and enforceable. Invalidity or unenforceability
of one provision shall not affect any other provision of this Agreement.
16. Survival. The respective rights and obligations of the parties
hereunder shall indefinitely survive the termination or expiration of this
Agreement to the extent necessary to the intended preservation of such
rights and obligations.
17. No Benefit to Others. The provisions set forth in this Agreement
are for the sole benefit of the parties hereto and their successors and
assigns, and they shall not be construed as conferring any rights on any
other persons.
18. Counterparts. This Agreement may be executed in one or more
counterpart copies, each of which shall be deemed an original and all of
which shall together be deemed to constitute one agreement.
IN WITNESS WHEREOF, the parties hereto, each by a duly authorized
representative, have executed this Confidentiality Agreement effective as of
the date first written above.
LANCER ORTHODONTICS, INC. "Receiving Party"
By:
Xxxx Xxxxx, CEO
DATE: DATE:
