Exhibit 5
PUT AND CALL AGREEMENT
This Put and Call Agreement (the "Agreement"), dated as of January 29,
2003, is entered into by and between Xxxxxx X. Xxxxxxxxx ("Xxxxxxxxx"), Xxxxxx
Xxxxxxx Xxxx ("Xxxx") and Xxxxx Seven ("Seven"), jointly and severally, and La
Jolla Cove Investors, Inc. a California corporation ("LJCI"), with reference to
the following:
WHEREAS, concurrently herewith, LJCI is purchasing from Thinka Weight-Loss
Corporation (the "Company") an 8% Convertible Debenture in the principal amount
of $300,000 (the "Debenture"), which Debenture is convertible into stock of the
Company (the "Stock"); and
WHEREAS, Xxxxxxxxx, Xxxx and Seven desire to have the opportunity to
repurchase a portion of the Stock that LJCI obtains through conversion of the
Debenture at an agreed upon future price, and LJCI is willing to grant such
right provided LJCI gets the opportunity to resell the Stock at an agreed upon
future price. Accordingly, the parties hereto desire to provide for certain put
and call provisions relating to the Stock.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and in consideration of LJCI purchasing the Stock, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Put Right. During the period and from time to time between July 29, 2003
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and September 29, 2003 (the "Put Period"), LJCI shall have the right to sell in
its sole and absolute discretion, and Xxxxxxxxx, Xxxx and Seven, jointly and
severally, shall thereafter have the obligation to purchase the number of shares
of Stock that would be obtained through conversion of up to $300,000 of the
Debenture for a cash purchase price of the lesser of (a) $0.35, or (b) 175% of
the Conversion Price (as defined in the Debenture) per share paid by LJCI. To
the extent that LJCI has converted the Debenture, it shall have the right to
substitute shares obtained through exercise of the Warrant dated January 29,
2003 issued by the Company to LJCI. The election of LJCI to sell the Stock shall
be pursuant to written notice to Xxxxxxxxx, Xxxx and Seven, which notice shall
be sent at least ten (10) business days prior to the effective date of the
transfer and shall specify the number of shares of Stock which LJCI elects to
sell hereunder at such time. On the effective date of the transfer, Xxxxxxxxx,
Xxxx and Seven shall pay to LJCI (or its designee), the purchase price therefor
in good funds, and within three business days thereafter LJCI shall deliver to
Xxxxxxxxx, Xxxx and Seven certificates evidencing the shares of Stock elected to
be sold together with a stock power. Any transfer hereunder shall be without
warranty or representation except as to good title. The obligations of
Xxxxxxxxx, Xxxx and Seven hereunder shall not be subject to any defense, setoff,
recoupment, impairment or termination for any reason including, without
limitation, whether the Stock is publicly traded, whether the Stock is
restricted, whether any bankruptcy proceedings have been instituted by or
against the Company or any order has been entered adjudging the Company a
bankrupt or insolvent, or whether the Company or its transfer agent consents to
or authorizes the transfer. The obligations of Xxxxxxxxx, Xxxx and Seven
pursuant to this Section shall be joint and several and the allocation of the
shares of Stock being purchased shall be as determined among Xxxxxxxxx, Xxxx and
Seven.
2. Call Right. During the period and from time to time between the date
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hereof and July 29, 2003 (the "Call Period"), Xxxxxxxxx, Xxxx and Seven, jointly
and severally, shall have the option to purchase, and LJCI shall thereafter have
the obligation to sell the number of shares of Stock that would be obtained
through conversion of up to $300,000 of the Debenture for a cash purchase price
of the lesser of (a) $0.40, or (b) 200% of the Conversion Price (as defined in
the Debenture) per share paid by LJCI. To the extent that LJCI has converted the
Debenture, it shall have the right to substitute shares obtained through
exercise of the Warrant dated January 29, 2003 issued by the Company to LJCI.
The election of Xxxxxxxxx, Xxxx and Seven to purchase the Stock shall be
pursuant to written notice to LJCI, which notice shall be sent at least ten (10)
business days prior to the effective date of the transfer and shall specify the
number of shares of Stock which Xxxxxxxxx, Xxxx and Seven elect to purchase
hereunder at such time. On the effective date of the transfer, Xxxxxxxxx, Xxxx
and Seven shall pay to LJCI (or its designee) the purchase price therefor in
good funds, and within three business days thereafter LJCI shall deliver to
Xxxxxxxxx, Xxxx and Seven certificates evidencing the shares of Stock elected to
be sold together with a stock power. Any transfer hereunder shall be without
warranty or representation except as to good title. The exercise of LJCI's Put,
in whole or in part, shall cancel a corresponding amount of Xxxxxxxxx, Xxxx and
Seven's Call.
3. Interest. At such time that money is due to any party, and if such
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amount is not paid within five (5) business days, then that amount shall accrue
interest at the rate of nine percent (9%) per year.
4. Governing Law. This Agreement shall in all respects be construed,
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interpreted and enforced in accordance with and governed by the laws of the
State of California, United States of America.
6. Consent to Jurisdiction. Xxxxxxxxx, Xxxx and Seven (1) hereby
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irrevocably submit to the jurisdiction of the United States District Court
sitting in the District of San Diego and the courts of the State of California
located in San Diego county for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereunder and (ii) hereby waive, and agree not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Xxxxxxxxx, Xxxx and Seven consent to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agree that such
service shall constitute good and sufficient service of process and notice
thereof Nothing in this section shall affect or limit any right to serve process
in any other manner permitted by law.
7. Attorneys' Fees. In the event of any legal action between the
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parties with respect to this Agreement or the subject matter hereof the
prevailing party shall be entitled to recover reasonable attorneys fees in
addition to court costs and litigation expenses incurred in said legal action,
regardless of whether such legal action is prosecuted to judgment.
8. Notices. Any notice, demand or other communication required or
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permitted under this Agreement shall be deemed given and delivered when in
writing and (a) personally served upon the receiving party, or (b) upon hand
delivery by telex (with correct answer back received), telecopy or facsimile at
the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or (c) upon the
third (3rd) calendar day after mailing to the receiving party by either (i)
United States registered or certified mail, postage prepaid, or (ii) FedEx or
other comparable overnight delivery service, delivery charges prepaid, and
addressed as follows:
To Xxxxxxxxx: Xxxxxx X. Xxxxxxxxx
0000 Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
To Xxxx: Xxxxxx Xxxxxxx Xxxx
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxx, XX 00000
Facsimile: 000-000-0000
To Seven: Xxxxx Seven
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
To LJCI: La Jolla Cove Investors, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Facsimile: (000) 000-0000
9. Severability. In the event that any provision of this Agreement becomes
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or is declared by a court of competent jurisdiction to be illegal, unenforceable
or invalid, then this Agreement shall continue in full force and effect without
said provision. If this Agreement continues in full force and effect as provided
above, the parties shall replace the invalid provision with a valid provision
which corresponds as far as possible to the spirit and purpose of the invalid
provision.
10. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
document. Facsimile execution shall be deemed originals.
11. Entire Agreement. This Agreement constitute the entire agreement
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between the parties with respect to the subject matter hereof and supersede all
prior oral or written agreements, representations or warranties between the
parties other than those set forth herein or herein provided for.
12. Successors and Assigns. The provisions hereof shall inure to the
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benefit of, and be binding upon, the permitted successors and assigns, heirs,
executors, and administrators of the parties hereto.
13. Amendment and Waiver. No modification or waiver of any provision of
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this Agreement shall be binding upon the party against whom it is sought to be
enforced, unless specifically set forth in writing signed by an authorized
representative of that party. A waiver by any party of any of the terms or
conditions of this Agreement in any one instance shall not be deemed or
construed to be a waiver of such terms or conditions for the future, or of any
subsequent breach thereof The failure by any party hereto at any time to enforce
any of the provisions of this Agreement, or to require at any time performance
of any of the provisions hereof, shall in no way to be construed to be a waiver
of such provisions or to affect either the validity of this Agreement or the
right of any party to thereafter enforce each and every provision of this
Agreement.
14. Status of Shares. Xxxxxxxxx, Xxxx and Seven acknowledge that the Stock
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being purchased by LJCI may constitute restricted securities and the resale
thereof by Xxxxxxxxx, Xxxx and Seven may be limited and subject to applicable
securities laws. In the event that Xxxxxxxxx, Xxxx and Seven acquire the Stock
pursuant to the exercise of the Put Right or Call Right, they shall acquire the
Stock for investment purposes and not with a view to distribution.
IN WITNESS WHEREOF, LJCI, Xxxxxxxxx, Xxxx and Seven have duly executed this
Agreement as of the date first above written.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxx Xxxxxxx Xxxx
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Xxxxxx Xxxxxxx Xxxx
/s/ Xxxxx Seven
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Xxxxx Seven
La Jolla Cove Investors, Inc.
By: /s/ Xxxxxx Xxxx
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Title: Portfolio Manager
