EXHIBIT 10(d)
CLINICOR, INC.
SALES AGENT AGREEMENT
THIS SALES AGENT AGREEMENT (this "Agreement") is made effective as of
September 15, 1995, by and between Clinicor, Inc. (the "Company") and SJ Capital
Inc. (the "Sales Agent").
RECITALS
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A. Sales Agent is a registered broker-dealer and member of the National
Association of Securities Dealers, Inc. (the "NASD"), a part of whose business
consists of the sale of securities.
B. The Company is offering Units, each "Unit" consisting of one share of
Common Stock and one redeemable Common Stock Purchase Warrant ("Warrant"), to
"Accredited Investors" (as that term is defined in Rule 501 of Regulation D
under the Securities Act of 1933) and certain other qualified investors upon the
terms and conditions set forth in a Confidential Private Placement Memorandum
dated September 15, 1995 (the "Memorandum"). Two Warrants entitle the holder
thereof to purchase during the warrant exercise periods described in the
Memorandum one share of Common Stock at a price of $4.00 per share, subject to
adjustment. The Units are being offered for a subscription price of $2.50 per
Unit with a minimum subscription of 200,000 Units and a maximum subscription of
1,400,000 Units. The Company will use the proceeds raised in the offering
described in the Memorandum (the "Offering") for working capital and other
purposes as described in the Offering.
C. The Units have not been and will not be registered under the Securities
Act of 1933, as amended (the "Securities Act"), or under state securities laws,
and will be offered and sold in reliance upon one or more exemptions from
registration provided by the Securities Act and Regulation D promulgated
thereunder and by such state securities laws. Consequently, it is extremely
important that the rules governing private offerings and applicable state rules
be adhered to in connection with the sale and offering of the Units.
D. Sales Agent desires to participate in the Offering of the Units on a
"best efforts -- all or nothing" 200,000 Unit minimum basis and (assuming the
minimum is achieved) a "best efforts" 1,400,000 Unit maximum basis by privately
soliciting, through Sales Agent's authorized personnel ("Sales
Representatives"), subscriptions for the purchase of the Units in accordance
with the terms of the Offering set forth in the Memorandum and in this
Agreement. The Company desires to authorize Sales Agent to obtain such
subscriptions, and it is the purpose of this Agreement to set forth the
agreement of the parties relative to such authorization.
AGREEMENT
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1. Solicitation of Subscriptions and Offering Materials
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Sales Agent agrees to use its best efforts to solicit purchasers for the
Units as contemplated by this Agreement and in accordance with the Memorandum.
Copies of the Memorandum will be furnished to Sales Agent in reasonable
quantities upon specific request. All copies of the Memorandum and any other
printed or written materials furnished to Sales Agent in connection with the
Offering shall remain the property of the Company and shall be treated and cared
for as set out in this Agreement, and any copies of such materials in the
possession of Sales Agent or its personnel shall be returned to the Company upon
request. Sales Agent shall maintain a written record reflecting the
distribution and location of all materials furnished to the Sales Agent in
connection with the Offering and the identity of all persons to whom such
materials are distributed. In addition, Sales Agent shall use its best efforts
to: (i) assure that the materials furnished are treated as confidential and not
reproduced or redistributed and (ii) secure the return of all materials
furnished to persons who do not subscribe for the purchase of the Units.
Neither Sales Agent nor any officer, agent, employee, or other representative of
Sales Agent is authorized to use or to display to any person, in connection with
the solicitation of subscriptions for the Units, any instruments, writings or
material other than the Memorandum and such other instruments as may be actually
furnished by the Company to Sales Agent in connection with the offering. A
minimum purchase of 10,000 units ($25,000) per investor is required, as set
forth in the Memorandum.
2. Terms of the Offering and Subscription Proceeds
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The Offering of Units will terminate on the "Offer Expiration Date" which
shall be the earlier of (i) that date on which subscriptions for 1,400,000 Units
($3,500,000.00) have been received or (ii) December 31, 1995, which date may be
extended to March 31, 1996. The Company, in its sole discretion, may withdraw,
terminate, cancel, or modify the Offering without notice.
Each prospective purchaser desiring to subscribe for Units will be required
to complete and execute a Subscription Agreement, a Registration Rights
Agreement, an Information Form, a Purchaser Questionnaire and an IRS Form W-9
(the "Subscription Documents"). All Subscription Documents and subscription
checks received by the Sales Agent will be forwarded by the end of the next
business day following receipt thereof to the Company. The Company will
determine whether it wishes to reject the subscription, and if the Company
determines to reject a subscription solicited by Sales Agent, the Company shall
notify Sales Agent within thirty business days of its receipt of the
Subscription Documents and shall return or cause to be returned said
Subscription Documents to Sales Agent. All proceeds received with respect to
subscriptions accepted by the Company shall be deposited by the Company in a
non-interest bearing escrow account.
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3. Compensation and Expenses.
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a. Upon each "Closing" of the Offering (as defined in the Memorandum),
subject to subsection 3e below, Sales Agent will be entitled to receive a sales
commission of 6% of the aggregate gross purchase price of the Units accepted by
the Company in such Closing. Except as set forth below, the Company shall not
have any liability or obligation to Sales Agent or any other person or party for
any amount other than the sales commission provided for in this Section 3a, and
such sales commission shall be payable only if, as and when a Closing actually
occurs and the proceeds of the Offering are distributed to the Company.
b. Upon the conclusion of the Offering, the Company will sell to the
Sales Agent a Warrant (the "Sales Agent Warrant") for the total price of
$100.00. The Sales Agent Warrant will entitle the Sales Agent to purchase one
Unit for each five Units sold during the Offering, will be exercisable for a
period of five years following the date of the Offering and will be in the form
of Exhibit A attached hereto. The purchase price of the Units underlying the
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Sales Agent Warrant will be $2.50 per Unit.
c. The Company will employ the Sales Agent as a consultant during a one
year period following the Offering, or such other time period as the parties may
mutually determine, to provide consulting services to the Company, including
advising the Company in connection with business and financial planning,
corporate organization and structure, private and public debt and equity
financing and financial matters in connection with the operation of the business
of the Company. As compensation for such services, if total sales accepted by
the Company exceed 200,000 Units, the Sales Agent will be entitled to receive a
consultant fee in an amount equal to 2% of the total gross proceeds raised in
the Offering payable in twelve equal monthly installments during the period in
which the Sales Agent provides such consulting services. The Sales Agent hereby
waives such consulting fee in the event that only the minimum subscription of
200,000 units is achieved.
d. Each party will bear its own expenses in connection with the
performance of its obligations with respect to the Offering.
e. Notwithstanding the foregoing provisions, Sales Agent will receive no
sales commission or fees or other cash or non-cash compensation with respect to
sales to residents of, or solicitations in, any state where Sales Agent is not
validly registered as a broker-dealer at the time of the offer and sale of Units
unless (in the reasonable determination of the Company and its counsel) such
registration is not required by such state.
4. Representations, Warranties, and Undertakings of the Company
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The Company represents and warrants to Sales Agent and agrees as follows:
a. The Units have not been and will not be registered under the
Securities Act and have not and will not be registered under applicable state
securities laws, and the Company will
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take all actions within its control as may be reasonably necessary to insure
that the Units will be offered and sold in compliance with the requirements
imposed on it by Section 3(b) and/or 4(2) of the Securities Act and Regulation
D, Rules 505 and 506, promulgated thereunder, and certain limited or private
offering exemptions of the securities laws of each state in which the Units may
be offered or sold; provided that the Company makes no representation or
warranty with respect to solicitation of potential investors by the Sales Agent
or with respect to other factors affecting compliance with federal or state
securities laws that are within the control of the Sales Agent.
b. The Memorandum will not as of its date include any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation or warranty with respect to any material untrue
statement or omission based on information that the Sales Agent provides or has
provided in writing.
c. The Company shall provide to Sales Agent and to each offeree any such
information, documents, and instruments as may be reasonably requested pursuant
to Regulation D, Rules 505 and 506.
5. Representations and Warranties of Sales Agent
---------------------------------------------
Sales Agent represents and warrants to the Company and agrees as follows:
a. The consummation of the transactions contemplated herein and those
contemplated by the Memorandum will not result in any breach of the terms or
conditions of or constitute a default under any indenture, agreement, or other
instrument to which Sales Agent is a party, or violate any order directed to
Sales Agent by any court or any federal or state regulatory body or
administrative agency having jurisdiction over Sales Agent or over its property.
b. Sales Agent is duly registered pursuant to the provisions of the
Securities Exchange Act of 1934 (the "Exchange Act") as a broker-dealer, is a
member in good standing of the NASD, and is duly registered as a broker-dealer
in such states as it is required to be so registered in order to carry out the
Offering contemplated by the Memorandum or will obtain such registration prior
to engaging in any sales efforts in such states. All offers made by or through
Sales Agent will be made only by individuals licensed as required by all
applicable federal and state securities laws.
c. Sales Agent has conducted its own due diligence regarding the Offering
and the Company, and has not relied on any representations from the Company,
other than those contained in this Agreement, in deciding to participate in this
Offering.
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d. Neither the Sales Agent's nor any Sales Representative's participation
in the Offering will cause any disqualification under Rule 505(b)(iii) of
Regulation D or any comparable provision of any applicable state securities
laws.
e. Sales Agent will:
i. not solicit subscriptions (i) prior to the commencement of the
offering period, (ii) by means of any solicitation or general
advertising in any manner prohibited by Regulation D or any
state securities laws, or (iii) before any filing required
pursuant to state securities laws has been made;
ii. insofar as is under its control, conduct the offering and sale
of the Units in accordance with the applicable provisions of
federal and state securities laws and preserve for the Company
the exemptions provided by Regulation D promulgated under the
Securities Act and Rules 505 and 506 thereunder and applicable
state securities law exemptions;
iii. limit the offering of the Units to investors who are Accredited
Investors and meet applicable requirements under state
securities laws or otherwise meet certain suitability and
sophistication standards, and each of whom meets the other
offeree standards set forth in the Memorandum; prior to any
offer of the Units to any such person, have reasonable grounds
to believe, and in fact believe, that such person is a
qualified investor; and prepare and maintain for the benefit of
the Company memoranda and other appropriate records
substantiating the foregoing;
iv. reasonably believe that each prospective subscriber from whom
it solicits a subscription for the Units has, either alone or
with such subscriber's duly purchaser representative, such
knowledge and experience in financial and business matters that
such subscriber is capable of evaluating the merits and risks
of the prospective investment in the Units; and allow the
Company access to such file memoranda and other records that
substantiate such belief of Sales Agent;
v. prior to the acceptance of any subscription, receive a fully
completed and executed Purchaser Questionnaire wherein the
prospective purchaser represents that he is an Accredited
Investor or other qualified investor and meets any other
suitability standards, and prepare and maintain for the benefit
of the Company memoranda or other records substantiating the
foregoing;
vi. limit the offering to the non-public solicitations of
subscriptions and provide each offeree, prior to the execution
of a Subscription Agreement,
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with a complete copy of the Memorandum and exhibits thereto,
and any supplements or amendments thereto provided to the Sales
Agent at the time of the initial Offering and during the course
of the Offering;
vii. afford each such offeree the opportunity to ask questions of
and receive answers from the Company concerning the terms and
conditions of the Offering and to obtain any additional
information, to the extent possessed by the Company or
obtainable by it without unreasonable effort;
viii. not forward a set of Subscription Documents to the Company if
it has a reason to believe that any information contained in or
any representation or warranty made in those documents by the
prospective purchaser is inaccurate or untrue in a material
respect, and cooperate with the Company in obtaining additional
evidence and information to verify the representations and
warranties contained in those documents;
ix. refrain from making any representations or providing any other
information or from utilizing any sales materials in connection
with the Offering other than the Memorandum and any amendments
or supplements thereto, unless provided by the Company and
approved by the Company in writing and then only if such
materials are accompanied or preceded by the Memorandum; and
refrain from engaging in any form of general solicitation or
general advertising, including, but not limited to, any
advertisement, article, notice, or other communication
published in any newspaper, magazine or similar media or
broadcast over television or radio and any seminar or meeting
whose attendees have been invited by general solicitation or
advertising; and
x. obtain and forward to the Company the Subscription Documents
and subscription check and all related documentation required
by the Company.
6. Indemnification
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a. Indemnification by the Company. To the extent permitted by applicable
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law, the Company agrees to indemnify and hold harmless Sales Agent
(and any agent, director or officer thereof) and any person who
controls Sales Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages or liabilities to which such
indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act or other federal or state statute,
law or regulation, at common law or otherwise, and the Company agrees
to reimburse Sales Agent and each such controlling person for any
legal or other expenses (including, except as otherwise hereinafter
provided, settlement expenses and reasonable fees and
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disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims,
damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding that may be brought against the
respective indemnified parties, in each case insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon, in whole or in part, (i) any breach of any
representation, warranty or covenant of the Company in this Agreement
or (ii) any untrue statement or alleged untrue statement of a material
fact contained in the Memorandum or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that (i) the
indemnity agreements of the Company do not apply to information
furnished in writing to the Company by Sales Agent specifically for
use in the Memorandum or any amendment thereof or supplement thereto
and (ii) the indemnity agreement contained in this Section 6(a) with
respect to the Memorandum shall not inure to the benefit of Sales
Agent (or to the benefit of any person controlling the Sales Agent) if
the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Units that are the subject thereof from Sales
Agent and the untrue statement or omission of a material fact
contained in such original Memorandum was corrected in the amendment
thereof or supplement thereto, unless the failure is the result of the
Company not providing Sales Agent with such amendment or supplement
prior to the sale of the Units.
b. Indemnification by Sales Agent. To the extent permitted by applicable
------------------------------
law, Sales Agent agrees to indemnify and hold harmless the Company,
each of its officers, each of its directors and each person (including
each partner or officer thereof) who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages,
liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, Exchange Act,
or other federal or state statute, law, or regulation, at common law
or otherwise and Sales Agent agrees to reimburse the Company and each
such other person for any legal or other expenses (including, except
as hereinafter provided, settlement expenses and reasonable fees and
disbursements of counsel) incurred by the respective indemnified
parties in connection with defending against any such losses, claims,
damages, liabilities, or in connection with any investigation or
inquiry of, or other proceeding that may be brought against, the
respective indemnified parties, in each case arising out of or based
upon, in whole or in part (i) any breach of any representation,
warranty or covenant of Sales Agent in this agreement or (ii) any
untrue statement or alleged untrue statement of a material fact
contained in the Memorandum or amendment thereof or supplement thereto
or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances
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under which they were made, not misleading, to the extent that such
statement or omission was made in reliance on information furnished in
writing to the Company by the Sales Agent for use in the preparation
of the Memorandum or any amendment or supplement thereto, or (iii) any
untrue statement of a material fact made by Sales Agent or the
omission or alleged omission to state therein a material fact
necessary in order to make the statements made by the Sales Agent in
the light of the circumstances under which they were made, not
misleading.
c. Claim for Indemnification. Each party indemnified under the
-------------------------
provisions of Sections 6(a) and 6(b) above agrees that upon the
service of a summons or other initial legal process upon it in any
action or suit instituted against it or upon its receipt of written
notification of the commencement of any investigation, inquiry or
proceeding against it, in respect of which indemnity may be sought on
account of any indemnity agreement contained in such Section, it will,
if a claim in respect thereunder is to be made against the
indemnifying party or parties under this Section 6 promptly given
written notice (the "Notice") of such service or notification to the
party or parties from whom indemnification may be sought hereunder.
No indemnification provided for in Sections 6(a) or 6(b) above shall
be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action,
suit, investigation, inquiry or proceeding to which the Notice would
have related and was materially prejudiced by the failure to receive
the Notice, but the omission so to notify such indemnifying party or
parties of any such service or notification shall not relieve such
indemnifying party or parties from any liability which it or they may
have to the indemnified party for contribution or otherwise than on
account of such indemnity agreement. Any indemnifying party shall be
entitled at its own expense to participate in the defense of any
action, suit, or proceeding against, or investigation or inquiry of,
an indemnified party. Any indemnifying party shall be entitled, if it
so elects within a reasonable time after receipt of the Notice by
giving written notice (the "Notice of Defense") to the indemnified
party, to assume (alone or in conjunction with any other indemnifying
party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding in which event such defense shall
be conducted at the expense of the indemnifying party or parties by
counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however,
that (i) if the indemnified party or parties reasonably determine
that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties in conducting
the defense of such action, suit, investigation, inquiry or proceeding
or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to
the indemnifying party or parties, then counsel for the indemnified
party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to
protect the interests of the indemnified party or parties and (ii) in
any event, the indemnified party or parties shall be entitled to
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have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after
receipt of the Notice, an indemnifying party gives a Notice of
Defense, the indemnifying party and the counsel chosen by the
indemnifying party or parties will not be liable under Section 6(a) or
6(b) above for any legal or other expenses subsequently incurred by
the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding, except that (A)
the indemnifying party of parties shall bear and pay the legal and
other expenses incurred in connection with the conduct of the defense
as referred to in clause (i) of the proviso to the preceding sentence
and (B) the indemnifying party or parties shall bear and pay such
other expenses as it or they have authorized to be incurred by the
indemnified party or parties. If, within a reasonable time after
receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or
other expenses incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation,
inquiry, or proceeding.
d. Contribution. In order to provide for just and equitable contribution
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in any action in which a claim for indemnification is made pursuant to
this Section 6, but it is judicially determined (by the entry of a
final judgment or decree by a court or competent jurisdiction and the
expiration of time to appeal or the denial of the last right to
appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 6 provides for
indemnification in such case, each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of
the losses, claims, damages, or liabilities referred to in Sectors
6(a) or 6(b) above, (i) in such proportion as is appropriate to
reflect the relative benefits received by each indemnifying party from
the offering of the Units or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of each indemnifying
party in connection with the statements or omissions that resulted in
such losses, claims, damages, or liabilities, or actions in respect
thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the
Sales Agent, on the other, shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of
the Units received by the Company and the total underwriting discount
and commissions received by the Sales Agent bear to one another.
Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by each indemnifying party, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
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The parties agree that it would not be just and equitable if
contribution to this Section 6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take
into account the equitable considerations referred to in the first
sentence of this Section 6(d). The amount paid by an indemnified
party as a result of the losses, claims, damages, or liabilities, or
actions in respect thereof, referred to in the first sentence of this
Section 6(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or
claim which is the subject of this Section 6(d). No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(1) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process on it in any action instituted
against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties
from whom contribution may be sought, but the omission so to notify
such party or parties of any service shall not relieve the party from
whom contribution may be sought from any obligation it may have
hereunder or otherwise, except as specifically provided in this
Section.
e. Settlement. The indemnified party will not, without prior written
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consent of the indemnifying party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not the indemnifying party or any person who
controls the indemnifying party within the meaning of the Securities
Act or Exchange Act is a party to such claim, action, suit, or
proceeding) unless such settlement, compromise or consent includes an
unconditional release of the indemnifying party and each such
controlling person from all liability arising out of such claim,
action, suit or proceeding.
7. Representations and Agreements to Survive Delivery
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All representation, warranties, and agreements made herein or in
certificates and instruments delivered pursuant hereto, and the indemnity
agreement contained in Section 6 hereof, shall remain in full force and effect
regardless of any investigation made by or on behalf of Sales Agent and its
controlling persons or the Company or any of its officers, directors, or agents,
and shall survive delivery of the Units to be offered hereunder.
8. Notice
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All notices hereunder shall be in writing and shall be sent by registered
or certified mail, postage prepaid, or otherwise delivered by hand or messenger,
or sent by cable, telex or telegram to the addresses shown below, or such
addresses as may be so designated in the future.
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9. Time
----
Time is of the essence with respect to this agreement.
10. Termination
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This Agreement (other than those portions which survive) may be terminated
by either party at any time by written notice to the other party.
11. Counterparts
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This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which together shall constitute one and
the same instrument.
12. Titles and Subtitles
--------------------
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
13. Amendment
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This Agreement may be amended only by a writing signed by each party
hereto.
14. Governing Law
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THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA EXCLUSIVE OF PRINCIPLES OF CONFLICT
LAW.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement this 6th
day of October, 1995.
THE COMPANY SALES AGENT
Clinicor, Inc. SJ Capital, Inc.
By:/s/ Xxxxxx X. X'Xxxxxxx By:/s/ Xxxxx Xxxxxxxxx
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Xxxxxx X. X'Xxxxxxx, Xxxxx Xxxxxxxxx,
President President
ADDRESS: ADDRESS:
000 Xxxx Xxxxx Xxxx, Xxxxx 000 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000 Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
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EXHIBIT A
SALES AGENT
WARRANT TO PURCHASE UNITS
OF
CLINICOR, INC.
Warrant to Purchase _______ Units
(subject to adjustment as set forth herein)
Exercise Price $2.50 Per Unit
(subject to adjustment as set forth herein)
VOID AFTER 5:00 P.M., AUSTIN, TEXAS, TIME, SEPTEMBER 30, 2000
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") OR REGISTERED OR QUALIFIED UNDER ANY OTHER
APPLICABLE FEDERAL OR STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR QUALIFICATION FILED IN ACCORDANCE WITH THE ACT AND
SUCH LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND SUCH
LAWS.
Clinicor, Inc., 000 Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (the
"Company"), hereby certifies that, for value received, SJ Capital, Inc., 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or any other
Holder as defined below, is entitled, subject to the terms and conditions set
forth below, to purchase from the Company at any time or after September 15,
1995 but before 5:00 p.m., Austin, Texas time, on September 30, 2000, _________
Units of the Company's securities (the "Units") at a purchase price of $2.50 per
Unit (the "Exercise Price"), each Unit consisting of one share of common stock
and one common Stock Purchase Warrant (hereinafter referred to as the "Units").
The number and character of the securities purchasable upon exercise of
this Warrant and the Exercise Price are subject to adjustment as provided below.
The term "Warrant" as used herein shall include this Warrant and any Warrants
issued in substitution for or replacement of this Warrant, or any Warrants into
which this Warrant may be divided or exchanged. The securities purchasable upon
the exercise of this Warrant are hereinafter referred to as "Warrant
Securities." Except as otherwise provided herein, the Warrant Securities shall
be as described in the Company's Private Offering Memorandum dated September 15,
1995 ("Effective Date"). The Warrants included in the Warrant Securities will
be exercisable for a three-year period from the date of exercise of this
Warrant, unless such period is extended or terminated in accordance
with the "Terms of Warrants," which is attached as Exhibit A to the Subscription
Agreement for the Units for the private offering. Other dates set forth in the
Warrant included in the Warrant Securities shall be appropriately adjusted (in
the reasonable discretion of the Company and its counsel) in light of the
Warrant Expiration Date of such Warrant. Two such Warrants will entitle the
holder to purchase one share of Common Stock at an exercise price of $1.00 per
share, subject to adjustment.
This Warrant may be assigned, transferred, sold, offered for sale, or
exercised by the Holder only upon compliance with all the pertinent provisions
hereof and only upon the written consent of the Company, which consent may be
withheld for any reason including, without limitation, compliance with the
various state and federal securities laws.
1. Exercise of Warrant.
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(a) Subject to the other terms and conditions of this Warrant, the
purchase rights evidenced by this Warrant may be exercised in whole or in part
at any time, and from time to time, on or after September 15, 1995, but before
5:00 p.m., Austin Texas, time, on September 30, 2000 (the "Warrant Expiration
Date"), by the Holder's presentation and surrender of this Warrant to the
Company at its principal office or at the office of the Company's stock transfer
agent, if any, accompanied by a duly executed Notice of Exercise, in the form
attached to and by this reference incorporated in this Warrant as Exhibit A, and
by payment of the aggregate Exercise Price, in certified funds or a bank
cashier's check, for the number of Units specified in the Notice of Exercise. In
the event this Warrant is exercised in part only, as soon as is practicable
after the presentation and surrender of this Warrant to the Company for
exercise, the Company shall execute and deliver to the Holder a new Warrant,
containing the same terms and conditions as this Warrant, evidencing the right
of the Holder to purchase the number of Units as to which this Warrant has not
been exercised.
(b) The certificate evidencing the Warrant Securities shall be deemed to
be issued, and the person to whom such Warrant Securities are issued of record
shall be deemed to have become a holder of record of such Warrant Securities, as
of the date of the surrender of such Warrant and payment of the aggregate
Exercise Price, whichever shall last occur, provided that if the books of the
Company with respect to the Warrant Securities shall be closed as of such date,
the certificates for such Warrant Securities shall be deemed to be issued, and
the person to whom such Warrant Securities are issued of record shall be deemed
to have become a record holder of such Warrant Securities, as of the date on
which such books shall next be open (whether before, on or after the applicable
Warrant Expiration Date), but at the Exercise Price
2
and upon the other conditions in effect upon the date of surrender of the
Warrant and payment of the Exercise Price, whichever shall have last occurred,
to the Company.
(c) The Company agrees not to merge, reorganize or take any action that
would terminate this Warrant unless written notice is given to the holders of
this Warrant in accordance with Section 3 hereof.
2. Exchange, Assignment or Loss of Warrant. This Warrant is
---------------------------------------
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations entitling the
Holder thereof to purchase (under the same terms and conditions as provided by
this Warrant) in the aggregate the same number of Units purchasable hereunder.
This Warrant may not be sold, transferred, assigned, or hypothecated except in
compliance with the Securities Act of 1933, as amended, and any applicable state
securities laws. To the extent allowable pursuant to applicable state and
federal securities laws and upon delivery of an opinion of counsel acceptable in
form and substance to the Company, this Warrant may be assigned in whole or in
part to officers or representatives of SJ Capital, Inc. and to any successor to
the business of SJ Capital, Inc. Any assignment shall be made by surrender of
this Warrant to the Company or at the office of its stock transfer agent, if
any, with the Assignment Form annexed hereto duly executed and with funds
sufficient to pay any transfer tax; whereupon the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other Warrants which carry the same
rights upon presentation hereof at the office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof. Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification as the
Company, in its discretion, may impose, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date.
3. Adjustments: Stock Dividends, Reclassification, Reorganization, Merger
----------------------------------------------------------------------
and Anti-Dilution Provisions.
----------------------------
(a) If the Company shall at any time before the Warrant Expiration Date
subdivide or combine its outstanding shares of Common Stock, this Warrant shall,
after that subdivision or combination, evidence the right to purchase the number
of shares of Common Stock that would have been issuable as a result of that
change with respect to the shares of Common Stock which were purchasable under
this Warrant immediately before that subdivision or combination. If the Company
shall at any time subdivide the outstanding shares of Common Stock, the Exercise
Price then in effect immediately before that subdivision shall be
proportionately
3
decreased, and, if the Company shall at any time combine the outstanding shares
of common Stock, the Exercise Price then in effect immediately before that
combination shall be proportionately increased. Any adjustment under this
section shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(b) If at any time before the Warrant Expiration Date the Common Stock
constituting a portion of the Units issuable upon exercise of this Warrant shall
be changed into the same or a different number of shares of any other series or
class or classes of stock whether by reclassification, recapitalization or
otherwise (other than a subdivision or combination of shares provided for
above), the Holder shall, on its exercise, be entitled to purchase, in lieu of
the Warrant Securities which the Warrant Holder would have become entitled to
purchase but for such change, a number of shares of such other series or class
or classes of stock equivalent to the number of Warrant Securities that would
have been subject to purchase by the Holder on exercise of this Warrant
immediately before that change.
(c) Except as otherwise provided in Section 13, if at any time before the
Warrant Exercise Date there shall be a capital reorganization of the Company's
Common Stock (other than a combination, subdivision, reclassification or
exchange of shares provided for elsewhere in this Warrant) or merger or
consolidation of the Company with or into another corporation or person
(provided such event does not result in the termination of this Warrant pursuant
to Section 13) then, as a part of such reorganization, merger, consolidation or
sale, lawful provision shall be made so that the Holder shall thereafter be
entitled to receive upon exercise of this Warrant, during the periods specified
in this Warrant and upon payment of the Exercise Price then in effect, the
number of shares of stock or other securities or property of the Company, or of
the successor corporation resulting from such reorganization, merger,
consolidation or sale to which a holder of the Common Stock deliverable upon
exercise of this Warrant would have been entitled in such reorganization,
merger, consolidation or sale if this Warrant had been exercised immediately
before that reorganization, merger, consolidation or sale. In any such case,
appropriate adjustment (as determined by the Company's Board of Directors) shall
be made in the application of the provisions of this Agreement and the Warrant
with respect to the rights and interests of the Holders after such
reorganization, merger, consolidation or sale to the end that the provisions of
this Warrant (including adjustment of the Exercise Price then in effect and
number of shares purchasable upon exercise of this Warrant) shall be applicable
after that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this Warrant. The
provisions of this Section 3(c) shall similarly apply to any such successive
reorganizations, mergers, consolidations or sales which satisfy the conditions
set forth above.
(d) If any adjustment made pursuant to subsections (a), (b) or (c), above,
creates a fractional Share, such Share shall be treated in accordance with
Section 7 hereof.
4
(e) The Company shall give notice of each adjustment or readjustment of the
Exercise Price or the number of Shares issuable upon exercise of this Warrant to
the Holder at that Holder's address as shown on the Company's books and records.
(f) The Warrant need not be changed because of any adjustment in the
Exercise Price or in the Units, shares of common Stock or other Warrant
Securities purchasable upon its exercise. A Warrant issued after any adjustment
upon any partial exercise or in replacement may continue to express the same
Exercise Price and the same number of Units or other Warrant Securities
(appropriately reduced in the case of partial exercise) as are stated on the
face of the Warrant as initially issued, and that Exercise Price and that number
of Units or other Warrant Securities shall be considered to have been so changed
at the close of business on the date of adjustment.
4. Notice to Holders. If, prior to the expiration of this Warrant either
-----------------
by its terms or by its exercise in full, any of the following shall occur:
(i) the Company shall declare a dividend or authorize any other
distribution on its Common Stock; or
(ii) the Company shall authorize the granting to the shareholders of its
Common Stock of rights to subscribe for or purchase any securities
or any other similar rights; or
(iii) any reclassification, reorganization or similar change of the Common
Stock, or any consolidation or merger to which the Company is a
party, or the sale, lease, or exchange of any significant portion of
the assets of the Company; or
(iv) the voluntary or involuntary dissolution, liquidation or winding up
of the company; or
(v) any purchase, retirement or redemption by the Company of its Common
Stock;
then, and in any such case, the Company shall deliver to the Holder or Holders
written notice thereof at least 30 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:
(i) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights, or, if a record is not to be
taken, the date as of which the shareholders of Common Stock of
record to be entitled to such dividend, distribution or rights are
to be determined;
5
(ii) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation,
winding up or purchase, retirement or redemption is expected to
become effective, and the date, if any, as of which the Company's
shareholders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reclassification, reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up or purchase,
retirement or redemption; and
(iii) if any matters referred to in the foregoing clauses (i) and (ii) are
to be voted upon by shareholders of Common Stock, the date as of
which those shareholders to be entitled to vote are to be
determined.
5. Officers' Certificate. Whenever the Exercise Price or the aggregate
---------------------
number of Warrant Securities purchasable pursuant to this Warrant shall be
adjusted as required by the provisions of Section 3 above, the Company shall
promptly file with its Secretary or an Assistant Secretary at its principal
office, and with its transfer agent, if any, an officers' certificate executed
by the Company's President and Secretary or Assistant Secretary, describing the
adjustment and setting forth, in reasonable detail, the facts requiring such
adjustment and the basis for and calculation of such adjustment in accordance
with the provisions of this Warrant. Each such officers' certificate shall be
made available to the Holder or Holders of this Warrant for inspection at all
reasonable times, and the Company, after each such adjustment, shall promptly
deliver a copy of the officers' certificate relating to that adjustment to the
Holder or Holders of this Warrant. The officers' certificate described in this
Section 5 shall be deemed to be conclusive as to the correctness of the
adjustment reflected therein if, and only if, no Holder of this Warrant delivers
written notice to the Company of an objection to the adjustment within 30 days
after the officers' certificate is delivered to the Holder or Holders of this
Warrant. The Company will use diligent efforts to make its books and records
reasonably available for inspection and copying during normal business hours by
the Holder so as to permit a determination as to the correctness of the
adjustment. If written notice of an objection is delivered by a Holder to the
Company and the parties cannot reconcile the dispute, the Holder and the Company
shall submit the dispute to arbitration pursuant to the provisions of Section 15
below. Failure to prepare or provide the officers' certificate shall not modify
the parties' rights thereunder.
6. Reservation of Warrant Securities. The Company hereby agrees that
---------------------------------
at all times prior to September 30, 2000, it will have authorized and will
reserve and keep available for issuance and delivery to the Holder that number
of shares of its Common Stock that may be required from time to time for
issuance and delivery upon the exercise of the then unexercised portion of this
Warrant and all other similar Warrants then outstanding and unexercised.
6
7. Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the exercise of all or any part of this
Warrant. With respect to any fraction of a share of any security called for
upon any exercise of this Warrant, the Company shall pay to the Holder an amount
in money equal to that fraction multiplied by the current market value of that
share. The current market value shall be determined as follows:
(i) if the security at issue is listed on a national securities exchange
or admitted to unlisted trading privileges on such an exchange, the
current value shall be the last reported sale price of that security
on such exchange on the last business day prior to the date of the
applicable exercise of this Warrant or, if no such sale is made on
such day, the average of the highest closing bid and the lowest
asked price for such day on such exchange; or
(ii) if the security at issue is not so listed or admitted to unlisted
trading privileges, the current market value shall be the average of
the last reported highest bid and lowest asked prices quoted on the
National Association of Securities Dealers Automated Quotation
System or, if not so quoted, then by the National Quotation Bureau,
Inc. on the last business day prior to the day of the applicable
exercise of this Warrant; or
(iii) if the security at issue in not so listed or admitted to unlisted
trading privileges and bid and asked prices are not reported, the
current market value shall be determined in such reasonable manner
as may be prescribed from time to time by the Board of Directors of
the Company.
8. Rights of the Holder. The Holder shall not be entitled to any
--------------------
rights as a shareholder in the Company by reason of this Warrant, either at law
or equity, except as specifically provided for herein. The Company covenants,
however, that for so long as this Warrant is at least partially unexercised, it
will furnish any Holder of this Warrant with copies of all reports and
communications furnished to the shareholders of the Company.
9. Warrant Securities to be Fully Paid. The Company covenants that all
-----------------------------------
Warrant Securities that may be issued and delivered to a Holder of this Warrant
upon the exercise of this Warrant and payment of the Exercise Price will be,
upon such delivery, validly and duly issued, fully paid and nonassessable.
10. Notices. All notices, certificates, requests, or other similar
-------
items provided for in this Warrant shall be in writing and shall be personally
delivered or deposited in the United States mail, postage prepaid, addressed to
the respective party as indicated in the portions of this Warrant preceding
Section 1. All notices shall be deemed to be delivered upon personal delivery or
upon the expiration of three (3) business days following deposit in the United
States mail,
7
postage prepaid. The addresses of the parties may be changed, and addresses of
other Holders and holders of Warrant Securities may be specified, by written
notice delivered pursuant to this Section 10. The Company's principal office
shall be deemed to be the address provided pursuant to this Section for the
delivery of notices to the Company.
11. Applicable Law. This Warrant shall be governed by and construed in
--------------
accordance with the laws of the State of Texas, and courts located in Texas
shall have exclusive jurisdiction over all disputes arising hereunder.
12. Arbitration. The Company and the Holder, and by receipt of this
-----------
Warrant or any Warrant Securities, all subsequent Holders or holders of Warrant
Securities, agree to submit all controversies, claims, disputes and matters of
difference with respect to this Warrant, including, without limitation, the
application of this Section 12 to arbitration in Austin, Texas, according to the
rules and practices of the American Arbitration Association from time to time in
force. This agreement to arbitrate shall be specifically enforceable.
Arbitration may proceed in the absence of any party if notice of the proceeding
has been given to that party. The parties agree to abide by all awards rendered
in any such proceeding. These awards shall be final and binding on all parties
to the extent and in the manner provided by the rules of civil procedure enacted
in Texas. All awards may be filed, as a basis of judgment and of the issuance
of execution for its collection, with the clerk of one or more courts, state or
federal, having jurisdiction over either the party against whom that award is
rendered or its property. No party shall be considered in default hereunder
during the pendency of arbitration proceedings relating to that default.
13. Termination. Unless otherwise terminated hereunder, the right to
-----------
exercise this Warrant shall expire and the Warrant Expiration Date shall be
hereby deemed to occur upon the effective date of a merger or consolidation of
the Company with or into another corporation, or the sale of all or
substantially all of the Company's assets to another corporation or person, if,
immediately after any such merger, consolidation or sale of assets, at least
fifty percent (50%) of the voting power of the surviving corporation or such
other person, as the case may be, is owned by persons who are not shareholders
of the Company immediately prior to such merger, consolidation or sale of
assets, provided that the Holders receive notice of such merger or consolidation
or sale of assets at least twenty (20) days prior to the effective date of such
merger, or consolidation or sale of assets. Notwithstanding the foregoing, the
Warrants shall not terminate if the Warrants are assumed by or exchanged with
Warrants of the surviving corporation in the merger, consolidation or sale of
assets, in which case such assumption or exchange shall be effective in
accordance with Section 3 hereof.
8
14. Miscellaneous Provisions.
------------------------
(a) Subject to the terms and conditions contained herein, this Warrant
shall be binding on the Company and its successors and shall inure to the
benefit of the original Holder, its successors and assigns and all holders of
Warrant Securities.
(b) In the event of any litigation or arbitration between the parties
hereto, the prevailing party in such litigation or arbitration shall be entitled
reimbursement by the other party for all costs and expenses resulting from such
litigation or arbitration, including, but not limited to, all reasonable
attorney's fees and disbursements.
(c) This Warrant cannot be changed or terminated or any performance or
condition waived in whole or in part except by an agreement in writing signed by
the party against whom enforcement of the change, termination or waiver is
sought.
(d) If any provision of this Warrant shall be held to be invalid,
illegal or unenforceable, such provision shall be severed, enforced to the
extent possible, or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability shall not affect the remainder of
this Warrant.
(e) The Company agrees to execute such further agreements, conveyances,
certificates and other documents as may be reasonably requested by the Holder to
effectuate the intent and provisions of this Warrant.
(f) Paragraph headings used in this Warrant are for convenience only and
shall not be taken or construed to define or limit any of the terms or
provisions of this Warrant. Unless otherwise provided, or unless the context
shall otherwise require, the use of the singular shall include the plural and
the use of any gender shall include all genders.
ATTEST: CLINICOR, INC.
By: ____________________ By: _______________________
9
EXHIBIT A
---------
NOTICE OF EXERCISE
------------------
The undersigned Holder of a Warrant hereby:
(a) irrevocably elects to exercise the Warrant to the extent of
purchasing ______ Units;
(b) makes payment in full of the aggregate Exercise Price for those
Units in the amount of $___________ by the delivery of certified funds or a bank
cashier's check in the amount of $______________;
(c) requests that a certificate for such Units be issued in the name of
the undersigned, or, if the name and address of some other person is specified
below, in the name of such other person:
_________________________________________________
_________________________________________________
_________________________________________________
(Name and address of person other than the undersigned
-----
in whose name Units are to be registered)
(d) requests, if the number of Units purchased or transferred are not
all the Units purchasable pursuant to the unexercised portion of the Warrant,
that a new Warrant of like tenor for the remaining Units purchasable pursuant to
the Warrant be issued and delivered to the undersigned at the address stated
below.
Dated: ________________________ ___________________________________________
Signature
(This signature must conform in all
respects to the name of the Holder
as specified on the face of the
Warrant.)
______________________________________
Printed Name
Social Security Number or
Employer ID Number: ____________________________________
Address: ____________________________________
ASSIGNMENT
----------
(Form of Assignment to be Executed if the
Warrant Holder Desires to Transfer Warrants Evidenced Hereby)
FOR VALUE RECEIVED, _________________________________________________
hereby sells, assigns and transfers to ___________________________________
______________________________________________________________________________.
(Please print name and address including zip code.)
Please insert social security, federal tax I.D.
number or other identifying number
_______________________________________________________________________Warrants
represented by this Warrant Certificate and does hereby irrevocably constitute
and appoint
_______________________________________________________________________Attorney,
to transfer said Warrants on the books of the Company with full power of
substitution.
Dated: Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Warrant Certificate)
SIGNATURE GUARANTEED:
NOTE: Any transfer or assignment of this Warrant Certificate is subject to
----
compliance with the restrictions on transfer imposed under the Warrant.
