RE TRACK USA, INC.
SECURITIES PURCHASE AGREEMENT
IN THE FORM OF A CONVERTABLE UNIT(S), CONSISTING OF A $25,000.00
UNSECURED PROMISSORY NOTE(S), WARRANT(S) TO PURCHASE
SHARES OF COMMON STOCK AND
PURCHASER(S) INVESTMENT REPRESENTATION AGREEMENT
THIS AGREEMENT: is made effective this ____ day of August 1999, between Re-Track
USA, Inc. a Delaware Corporation (the "Company") and __________ (the
"Purchaser(s)").
WITNESSETH
In consideration of the mutual promises contained herein, and other good and
valuable consideration, the parties hereto agree as follows.
1. AGREEMENT OF PURCHASE AND SALE: The company agrees to sell to Purchaser(s),
and Purchaser(s) agree to purchase from the Company ___ Unit(s) (the "Units") at
a per Unit purchase price of $25,000.00 for an aggregate purchase price of
$__________. Each Unit will consist of (i) a $25,000.00 unsecured promissory
note in the form of Exhibit A hereto (the "Note") convertible under certain
conditions into shares of Common Stock of the Company (the "Common Stock") and
(ii) a Warrant (the "Warrant") in the form of Exhibit B hereto for the purchase
of certain shares of the Company's Common Stock. Payment is due with the tender
of this Securities Purchase Agreement and shall be made payable to the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: In consideration of
Purchaser(s) purchasing the Unit(s), the Company represents and warrants to the
Purchaser as follows:
(a) ORGANIZATION: The Company is a duly organized and existing corporation under
the laws of the state of Delaware.
(b) GOOD STANDING: The Company is in good standing under the laws of the state
of Delaware, and there are no proceedings or actions pending to limit or impair
any of its powers, rights, and privileges, or to dissolve it.
(c) CORPORATE AUTHORIZATION: The execution and delivery of this agreement and
the consummation of the transactions contemplated have been duly authorized by
proper corporate action of the Company.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER: In consideration of the
Company's offer to sell the Unit(s), Purchaser(s) hereby represent and warrant
to the Company as follows:
(a) INFORMATION ABOUT THE COMPANY: Purchaser(s) has had the opportunity to ask
questions and request information from the Company and to receive such
information and answers from the Company, or officer, agent and or
representative of the Company, concerning the terms and conditions of the
investment and the general and overall business affairs of the Company.
Purchaser(s) has further obtained all such additional information necessary to
verify such received information. Purchaser(s) has received such additional
information concerning the Company that the Purchaser(s) considers necessary or
advisable in order to form a decision concerning an investment in the Company.
(b) HIGH DEGREE OF RISK: Purchaser(s) realizes that the Unit(s) involve a high
degree of risk including the risks of receiving no return on the investment and
the losing of the complete investment in the Company. Purchaser(s) has paid
particular attention to and understands the following specific RISK FACTORS.
(i) LACK OF SALES AND PROFITS AND UNCERTAINTY OF A GOING CONCERN: The Company
has generated no sales and since inception has incurred considerable operating
losses. The Company's cash with which to conduct operations has been depleted
and its ability to continue as a going concern cannot be assured. No assurance
can be given that the Company will ever be profitable.
(ii) NEED FOR ADDITIONAL FINANCING: The Company's ability to continue as a going
concern is dependent upon its obtaining additional financing to support the
Company's operations and contemplated growth. The Company currently requires
additional equity capital or debt financing to enable further expansion and or
to sustain operations. No assurance can be given that the Company will be able
to locate additional capital on terms acceptable to it or at all. No assurance
can be given that the Company will be successful in its offer to sell the units
contemplated herein.
(iii) PRODUCTS MAY NOT BE COMMERCIALLY ACCEPTED: The Company has acquired
patented safety disposable retractable safety syringe technology and certain
other medical products, none of which have been commercially introduced to
customers. There is no assurance that the Company's intended customers will
commercially accept the Company's products.
(iv) PATENT PROTECTION MAY BE INSUFFICIENT: Although the Company has certain
U.S. and foreign patents covering its safety disposable retractable syringe
technology and certain other medical products as acquired by the Company, there
can be no assurance that these patents sufficiently protect the Company's
intellectual property, that such patents will not be infringed by others or that
others will not develop substantially equivalent noninfringing technology.
(v) COMPETITION: The medical products industry and in particular that for
syringe products is highly competitive. Several firms, including Sherwood
Medical and Becton Xxxxxxxxx, offer disposable, safety syringes directly
competitive with the Company's products. These firms are better known and better
capitalized and have significantly greater financial resources, more experienced
organizations, and a greater number of employees than the Company.
(vi) GOVERNMENT REGULATION: The manufacturing and marketing of medical products
in the United States is regulated by the U.S. Food and Drug Administration (the
"FDA"). Although the Company's syringe technology has received 510k approval
from the FDA for the marketing of its disposable, retractable, safety syringe,
it has not received any such approval with respect to any of its other medical
products. Compliance with FDA regulations is time consuming and expensive and
there can be no assurance that the Company will ever receive additional
approvals to market its various medical products.
Purchaser Initials_______
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(vii) RELIANCE ON KEY PERSON: The Company is highly dependent upon the services
of Xx. Xxxxxx Xxxxx, the Company's President, CEO and founder. The loss of Xx.
Xxxxxx Xxxxx'x services could have a materially adverse effect on the Company.
(viii) NEED FOR ADDITIONAL PERSONNEL: Xx. Xxxxx has no substantial experience in
the manufacturing or marketing of medical products. The Company intends to seek
additional qualified personnel. There is no assurance that the Company can
attract or retain any such new personnel.
(ix) PRODUCT LIABILITY CLAIMS: There can be no assurance that the Company will
not be named in a product liability lawsuit, nor that the Company will not be
held partially or fully liable in the event of such a lawsuit. The Company
currently has no product liability insurance, although it intends to seek
coverage when it commences commercial marketing of its products and if cash flow
permits. There is a risk of claims against the Company, based on product
liability or other legal theories for personal injury due to the failure of the
Company's products among other matters. Furthermore, even if the Company is
found not liable as to any such claims, it could nevertheless expend a
considerable sum in defending itself against such claims.
(x) CONTROL BY MANAGEMENT: Xx. Xxxxx owns the majority of the Company's Common
Stock and will be in a position to control the affairs of the Company, including
the election of directors.
(xi) NO ESCROW OF PLACEMENT PROCEEDS: There is no minimum or maximum number of
Unit(s) which must be sold by the Company pursuant to this agreement, and there
is no assurance that any specific number of Unit(s) will be sold. All proceeds
from the sale of the Unit(s) offered hereby will be deposited into the Company's
general business account upon receipt and will be available for immediate
corporate use without using an escrow of any kind.
(xii) NO ASSURANCE OF REPAYMENT ON NOTE OR ABILITY TO CONVERT NOTE OR EXERCISE
WARRANT: The note(s) included as part of the Unit(s) offered hereby are not
secured by any of the Company's assets. There is no assurance that the note(s)
will be repaid, when mature, or that in the event of any bankruptcy proceeding
or liquidation of the Company investors will receive any payment on such
note(s). The note(s) may not be converted into Common Stock, and the Warrants
may not be exercised unless and until the Company completes an initial public
offering of its common stock. The Company has no commitment from any investment
banking firm for such an offering and there is no assurance that the Company
will ever conduct a public offering.
(xiii) PATENTS AND TECHNOLOGY: The Company has acquired its technology from Safe
Tech Medical Products Inc. and Xx. Xxxxxxx Xxxxxxx , the inventor, (subject to a
$200,000 loan and security interest in favor of one of the Company's
shareholder's). The Company has no outstanding obligations to Safe Tech Medical
Products Inc. and or the Inventor, Xx. X. Xxxxxxx, whatsoever.
Purchaser Initials_______
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(xiv) POSSIBLE COMMISSIONS ON SALES OF UNIT(S): The Company may engage one or
more broker/dealers to assist the Company in the sale of the Unit(s) offered
herein and pay a commission on such sales procured through the services of any
such placement agent or agents.
(xv) DILUTION: Purchaser(s) of the Unit(s) offered hereby will experience an
immediate substantial dilution in net tangible book value per share of common
stock from the placement price hereunder.
(xvi) NO DIVIDENDS: No Dividends have been paid on the Common Stock of the
Company. It is anticipated that profits received from operations (if any), will
be devoted to the Company's future operations. The Company does not anticipate
the payment of cash dividends on its Common Stock in the foreseeable future, and
any decision to pay dividends will depend upon the Company's profitability at
that time, cash available therefore and other factors. ANY PURCHASER(S) WHO
ANTICIPATE OR REQUIRE AN IMMEDIATE NEED FOR INCOME FROM AN INVESTMENT MADE IN
THE UNIT(S) OFFERED HEREBY SHOULD NOT PURCHASE THE UNIT(S) OFFERED HEREIN.
(xvii) USE OF PROCEEDS: The proceeds obtained by the Company from the sale of
the units offered herein will be used for (a) repayment of certain short term
debt instruments (b) further development of the Company's core patented
technology and (c) general working capital. The management of the Company will
continue to have broad discretion as to the application of the use of proceeds.
(xviii) LITIGATION: The Company is a party to certain litigation which it
believes is either of questionable merit or in the aggregate, immaterial to its
operations as a whole. The litigation is comprised of routine business disputes
arising out of its day to day operations. All such actions are being vigorously
defended and no one of them are expected to result in either a damage award or
significant expense to damage the day to day operations of the Company. The
Company does not believe that these cases, if lost, would materially affect the
Company's operations.
(xix) DETERMINATION OF OFFERING PRICE: The offering price for the Securities
offered hereby bears no relationship to the assets, prospects, net worth of the
Company, or any recognized criteria of value and should not be considered to be
any indication of the actual value of the Company or it Securities. The offering
price of the Securities offered herein has been determined by the management of
the Company and there can be no assurance that subsequent trading if any of the
Unit(s), Unit(s) Shares, Warrant(s) and or the Shares underling the Warrant(s)
will be at prices equal to or higher then the purchase price of the securities
offered herein.
(c) ABILITY TO BEAR THE RISK: Purchaser(s) can bear the economic risk of an
investment in the Unit(s), including the total loss of such investment.
(d) APPROPRIATE INVESTMENT: Purchaser(s) believes, in light of the information
provided herein and pursuant to paragraph 3 (a) above, the purchase of the
Unit(s) pursuant to the terms of this agreement is an appropriate and suitable
investment for the Purchaser(s).
Purchaser Initials_______
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(e) BUSINESS SOPHISTICATION: Purchaser(s) is experienced and knowledgeable in
financial and business matters, capable of evaluating the merits and risks of
purchasing the securities offered herein by the Company.
(f) Residency: Purchaser(s) is a resident of the State of: ____________________
(g) Status as AN "ACCREDITED INVESTOR": Purchaser(s) is (check all that apply):
___(l) A natural person whose individual net worth, or joint net
worth with his or her spouse, exceeds $2,500,000.
___(2) A natural person whose individual income was in excess of
$400,000, or whose joint income with his or her spouse was in
excess of $500,000, in each of the two most recent years, and
who has a reasonable expectation of reaching the same income
level for the current year.
___(3) A bank, insurance company, registered investment company,
business development company, small business investment
company or employee benefit plan.
___(4) A savings and loan association, credit union, or similar
financial institution or a registered broker or dealer.
___(5) A Private business development company
___(6) An organization described in Section 501 (c)(3) of the
Internal Revenue Code with assets in excess of $5,000,000.
___(7) A corporation, or similar business trust, or partnership with
assets in excess of $5,000,000.
___(8) A trust with assets in excess of $5,000,000.
___(9) A director or executive officer of the Company.
___(10) None of the above.
(If your status as an "Accredited Investor" is based upon other than 1,2, or 9
above, we will contact you to obtain more specific information.)
4. INVESTMENT PURPOSE IN ACQUIRING THE UNIT(S): Purchaser(s) and the Company
acknowledge that the Unit(s), including the Note(s), the Warrant(s), and the
Common Stock underlying the Warrant(s), have not been registered under the
Securities Act of 1933, as amended (the "Act"), or applicable state securities
laws.
Purchaser Initials_______
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Securities issued herein will be issued to Purchaser(s) in reliance on
exemptions from the registration requirements of the Act and applicable state
securities laws and in reliance on the Purchaser(s) and the Company's
representations and agreements contained herein. Purchaser(s) is subscribing to
acquire the Unit(s) for the account of Purchaser(s) for Investment purposes only
and not with a view to their resale or distribution.
Purchaser(s) has no present intention to divide his, her, or its participation
with others or to resell or otherwise dispose of all or any part of the Unit(s).
In making these representations, Purchaser(s) understands that, in the view of
the Securities and Exchange Commission (the "Commission"), exemption of the
Unit(s) from the registration requirements of the Act would not be available if,
not withstanding the representations of Purchaser(s) if he she or it has in mind
merely acquiring the Unit(s) for resale.
5. COMPLIANCE WITH SECURITIES ACT: Purchaser(s) agrees that if the Unit(s), the
Note(s), the Warrant(s), the Common stock underlying the Warrant(s), or any part
of the foregoing are sold or distributed in the future, Purchaser(s) shall sell
or distribute them pursuant to the requirements of the Act and applicable state
securities laws. Purchaser(s) agree that Purchaser(s) will not transfer any part
of the Unit(s) without (1) obtaining a No Action letter from the Commission and
applicable state securities commissions, (2) obtaining an opinion of counsel
satisfactory in form and substance to the Company to the effect that such
transfer is exempt from the registration requirements under the Act and
applicable state securities laws, or (3) such registration.
6. RESTRICTIVE LEGEND: Purchaser(s) agrees that the Company may place a
restrictive legend on the documents representing the Unit(s), the Note(s) and
the Warrant(s).
7. STOP TRANSFER ORDER: Purchaser(s) agree that the Company may place a stop
transfer order with its registrar and stock transfer agent (if any) covering all
documents, or certificates representing the Unit(s), the Note(s), the Common
Stock or the Common Stock Underlying the Warrant(s).
8. KNOWLEDGE OF RESTRICTIONS UPON TRANSFER OF THE UNITS: Purchaser(s)
understands that the Unit(s), including the Note(s), the Warrant(s) the Common
Stock and any Common Stock issuable upon the exercise of the Warrant(s), are not
freely transferable and may in fact be prohibited from sale for an extended
period of time and that, as a consequence thereof, the undersigned must bear the
economic risk of an investment in the Unit(s) for an indefinite period of time
and may have extremely limited opportunities to dispose of the same.
Purchaser(s) understands the Rule 144 of the Commission permits the transfer of
"restricted securities" of the type herein involved only under certain
conditions, after and including a minimum two year holding period, (which with
respect to the converted shares of common stock and the common stock underlying
the warrant(s), will not begin to run until the exercise of the convertible
option and the exercise of the warrant(s)) and the availability to the public of
certain information concerning the Company.
10. ADDITIONAL DOCUMENTS: Purchaser(s) agrees to execute such other documents
and instruments (if any) as counsel for the Company reasonably deems necessary
to effect the compliance of the issuance of the Unit(s), Note(s), Warrant(s) and
Share(s) with federal and state laws.
Purchaser Initials_______
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12. BINDING EFFECT: Neither this agreement nor any interest herein shall be
assignable by Purchaser(s) without the prior written consent of the Company. The
provisions of this agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective heirs, legal representatives,
successors, and assigns.
13. REPRESENTATIONS TO SURVIVE DELIVERY: The representations, warranties, and
agreements of the Company and Purchaser(s) contained in this agreement will
remain operative and in full force and effect and will survive the payment of
the purchase price pursuant to Section 1 above and the delivery of documents
representing the Unit(s).
14. GOVERNING LAW: This agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, exclusive of its conflict of
laws rules.
IN WITNESS WHEREOF, the undersigned has hereunto affixed his, her, or its
signature.
In the Presence of:
-------------------------------- --------------------------------
--------------------------------
BY: Purchaser
Address: _______________________
--------------------------------
The Company hereby accepts the purchasers intent to purchase the Unit(s) as
evidenced by this Securities Purchase Agreement and Purchaser(s) Investment
Representation Agreement.
In the Presence of: Re-Track USA, Inc.
---------------------------- ---------------------------
BY: Xxxxxx Xxxxx, President
Purchaser Initials_______
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PURCHASER(S) INFORMATION
-------------------------------------------------------
(Please print name(s) in which the Units are to be issued)
------------------------------
Taxpayer I.D. No.
Address: ___________________________________________________________________
City: ______________________________________________________________________
Telephone Number _______________________
Check One:
____ Individual Ownership ____ Tenants in Common
____ Other ____ Joint Tenants
Purchaser Initials_______
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CONVERTIBLE PROMISSORY NOTE
Exhibit A
$__________ August ___, 1999
FOR VALUE RECEIVED, Re-Track USA Inc. a Delaware corporation (the
"Maker"), hereby agrees and promises to pay to the order of _______________ (the
"Holder") the principal sum of _______________________ Dollars on ___________
(Three years from the date of this Note above), together with interest on the
unpaid principal balance hereof at the rate of seven (7%) percent per annum.
If a default occurs in the payment of principal or interest when due
in accordance with the terms and conditions of this Note, the Maker agrees to
pay the costs of collection, including reasonable attorneys' fees. This Note may
be prepaid at any time in any amount, without penalty or premium. All
prepayments or payments shall be applied against any unpaid interest and then
against principal.
Without affecting the liability of the Maker, the Holder may, without
notice, renew or extend the time for payment or accept partial payments. No
delay or omission on the part of the Holder in exercising any right hereunder
shall operate as a waiver of such right or of any other remedy under this Note.
The Maker hereby waives presentment for payment, protest and notice of
non-payment.
At any time during the six (6) month following the effective date of a
Registration Statement (if any) filed by the Maker with the Securities and
Exchange Commission in respect of an initial public offering for cash of the
Maker's Common Stock (an "IPO"), the Holder may elect to convert all, but not
less than all, of the outstanding principal and accrued interest of this Note
into Common Stock of the Maker. The number of such shares issuable upon
conversion of this Note shall be computed by dividing (x) the outstanding
principal and interest of this Note at the time written notice as described
below is received by the Maker by (y) a conversion price computed as 50% of the
initial public offering price on the cover page of the Maker's Prospectus for
the IPO, rounded up to the next nearest $.10. Any fractional share so computed
shall not be issued. The Holder may exercise the conversion rights hereunder by
giving written notice to the Maker at its principal executive offices, which
notice must be received by 5:00 PM on or prior to the date of expiration of
these conversion rights.
IN WITNESS WHEREOF, the undersigned has hereunto affixed its signature.
Re-Track USA, Inc.
___________________________ By:__________________________
Notary Public Xxxxxx Xxxxx, President
Purchaser Initials_______
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WARRANT
EXHIBIT B
TO PURCHASE SHARES OF
COMMON STOCK OF
RE-TRACK USA, INC.
August ____ , 1999
This Certifies that, in consideration of having provided certain
private financing to Re-Track USA, Inc. a Delaware corporation (the "Company"),
______________ (the "Warrant holder") is entitled to subscribe for and purchase
from the Company, at any time commencing on the Company's IPO Date, if any (as
defined below), and ending on or before 5:00 PM Central Time, on the date which
is two (2) years following the IPO Date, the number of shares of the Company's
Common Stock as computed below at the Purchase Price set forth herein, subject
to adjustment as hereinafter set forth.
1. DEFINITIONS: For all purposes of this Warrant the following terms shall have
the following meanings:
"COMMISSIONS": shall mean the Securities and Exchange Commission, or
any other federal agency then administering the Securities Act.
"COMPANY": shall mean Re-Track USA, Inc. a Delaware corporation, and
any corporation which shall succeed to, or assume, the obligations of said
corporation hereunder.
"COMMON STOCK": shall mean the shares of Common Stock of the Company.
"IPO": shall mean an initial public offering for cash of the Company's
Common Stock conducted pursuant to a registration statement filed under the
Securities Act with the Commission.
"IPO DATE": shall mean the effective date of the registration statement
filed by the Company with the Commission in respect of an IPO.
"NUMBER": shall mean the number of shares of Common Stock purchasable
upon exercise of this Warrant. The Number shall be computed by dividing (x)
$________ (representing the aggregate purchase price by the initial Warrant
holder hereunder for Unit(s) of the Company issued in a private placement
conducted in 1999) by (y) a conversion price computed as 50% of the initial
public offering price on the cover page of the Company's Prospectus for the IPO,
rounded up to the next nearest $.10. Any fractional portion of the Number as so
computed shall be disregarded. The Number is subject to adjustment as
hereinafter provided.
"OTHER SECURITIES": shall mean any stock (other than Common Stock) or
other securities of the Company or any other person (corporate or otherwise)
which the Warrant holder at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities.
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"PURCHASE PRICE": shall mean 120% of the initial public offering price
on the cover page of the Company's Prospectus for an IPO. The Purchase Price is
subject to adjustment as hereinafter provided.
"SECURITIES ACT": shall mean the Securities Act of 1993, as amended,
and the rules and regulations of the Commission thereunder, as in effect at the
time.
"SUBSCRIPTION FORM": shall mean the subscription forms attached hereto.
"TRANSFER": shall mean any sale, assignment, pledge, or other
disposition of any Warrants and/or Warrant Shares, or of any interest in either
thereof, which would constitute a sale thereof within the meaning of Section
2(3) of the Securities Act.
"WARRANT SHARES": shall mean the shares of Common Stock purchased or
purchasable by the Warrant holder upon the exercise of the Warrants pursuant to
Section 2 hereof
"WARRANT HOLDER": shall mean the holder or holders of the Warrants or
any related Warrant Shares.
"WARRANTS": shall mean the Warrants (including this Warrant), identical
as to terms and conditions and date, except as to the number of shares of Common
Stock for which they may be exercised, evidencing the right to purchase
initially an aggregate of _________shares of Common Stock, and all Warrants
issued in exchange, transfer or replacement thereof
All terms used in this Warrant which are not defined in Section 1 hereof have
the meanings respectively set forth elsewhere in this Warrant.
2. EXERCISE OF WARRANT, ISSUANCE OF CERTIFICATE, AND PAYMENT FOR WARRANT SHARES:
This Warrant may not be exercised unless and until the Company completes an IPO.
The rights represented by this Warrant may be exercised at any time on or after
the IPO Date and from time to time, prior to expiration hereof, by the Warrant
holder, in whole or in part (but not as to any fractional share of Common
Stock), by: (a) delivery to the Company of a completed Subscription Form, (b)
surrender to the Company of this Warrant properly endorsed and signature
guaranteed, and (c) delivery to the Company of a certified or cashier's check
made payable to the Company in an amount equal to the aggregate Purchase Price
for the Number of shares of Common Stock being purchased, at its principal
office or agency (or such other office or agency of the Company as the Company
may designate by notice in writing to the holder hereof). The Company agrees and
acknowledges that the shares of Common Stock so purchased shall be deemed to be
issued to the holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant, properly endorsed, and the
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Subscription Form shall have been surrendered and payment made for such shares
as aforesaid. Upon receipt thereof, the Company shall, as promptly as
practicable, and in any event within 15 days thereafter, execute or cause to be
executed and deliver to the Warrant holder a certificate or certificates
representing the aggregate number of shares of Common Stock specified in said
Subscription Form. Each stock certificate so delivered shall be in such
denomination as may be requested by the Warrant holder and shall be registered
in the name of the Warrant holder or such other name as shall be designated by
the Warrant holder. If this shall have been exercised only in part, the Company
shall, at the time of delivery of said stock certificate or certificates,
deliver to the Warrant holder a new Warrant evidencing the rights of such holder
to purchase the remaining shares of Common Stock covered by this Warrant. The
Company shall pay all expenses, taxes, and other charges payable in connection
with the preparation, execution, and delivery of stock certificates pursuant to
this Section 2, except that, in case any such stock certificate or certificates
shall be registered in a name or names other than the name of the Warrant
holder, funds sufficient to pay all stock transfer taxes which shall be payable
upon the execution and delivery of such stock certificate or certificates shall
be paid by the Warrant holder to the Company at the time of delivering this
Warrant to the Company as mentioned above.
3. OWNERSHIP OF THIS WARRANT: The Company may deem and treat the registered
Warrant holder as the holder and owner hereof (notwithstanding any notations of
ownership or writing made hereon by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for transfer as provided herein and then only if
such transfer meets the requirements of Section 5 hereof.
4. EXCHANGE, TRANSFER AND REPLACEMENT: Subject to Section 5 hereof, this Warrant
is exchangeable upon the surrender hereof by the Warrant holder to the Company
at its office or agency described in Section 2 hereof for new Warrants of like
tenor and date representing in the aggregate the right to purchase the Number of
shares purchasable hereunder, each of such new Warrants to represent the right
to purchase such number of shares (not to exceed the aggregate total Number
purchasable hereunder) as shall be designated by the Warrant holder at the time
of such surrender. Subject to Section 5 hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company
by the Warrant holder in person or by duly authorized attorney, and a new
Warrant of the same tenor and date as this Warrant, but registered in the name
of the transferee, shall be executed and delivered by the Company upon surrender
of this Warrant, duly endorsed, at such office or agency of the Company. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction, or mutilation of this Warrant, and in the case of loss,
theft, or destruction, of indemnity or security reasonable satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant. This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange, transfer, or replacement. The Company shall pay
all expenses, taxes (other than stock transfer taxes), and other charges payable
in connection with the preparation, execution and delivery of Warrants pursuant
to this Section 4.
5. RESTRICTIONS ON TRANSFER: Notwithstanding any provisions contained in this
Warrant to the contrary, neither this Warrant nor the Warrant shares shall be
transferable except upon the conditions specified in this Section 5, which
conditions are intended, among other things, to ensure compliance with the
provisions of the Securities Act in respect to the transfer of this Warrant or
such Warrant Shares. The holder of this WARRANT AGREES THAT SUCH HOLDER WILL NOT
Purchaser Initials_______
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TRANSFER this Warrant or the related Warrant Shares (a) prior to delivery to the
Company of an opinion of counsel selected by the Warrant holder and reasonably
satisfactory to the Company, stating that such transfer is exempt from
registration under the Securities Act or (b) until registration of such Warrants
and/or Warrant Shares under the Securities Act has become effective and
continues to be effective at the time of such transfer. An appropriate legend
may be endorsed on the Warrants and the certificates of the Warrant Shares
evidencing these restrictions.
6. ANTIDILUTION PROVISIONS: The rights granted hereunder are subject to the
following:
(a) STOCK SPLITS AND REVERSE SPLITS: In case at any time after the IPO Date, the
Company shall subdivide its outstanding shares of Common Stock into a greater
number of shares (including upon a dividend made in Common Stock), the Purchase
Price in effect immediately prior to such subdivision shall be proportionately
reduced and the number of Warrant Shares purchasable pursuant to this Warrant
immediately prior to such subdivision shall be proportionately increased, and
conversely, in case at any time after the IPO Date, the Company shall combine
its outstanding shares of Common Stock into smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall be
proportionately increased and the number of Warrant Shares purchasable upon the
exercise of this Warrant immediately prior to such combination shall be
proportionately reduced. Except as provided in this paragraph (a), no adjustment
in the purchase price and no change in the number of Warrants Shares so
purchasable shall be made pursuant to this section 6 as a result of or by any
such subdivision or combination.
(b) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER, OR SALE: If any
capital reorganization or reclassification or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation, shall be effected in such a way that holders of shares of Common
Stock shall be entitled to receive Common Stock, Other Securities or assets with
respect to or in exchange for shares of Common Stock, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Warrant holder shall thereafter
have the right to purchase and receive upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately there to for purchasable and receivable upon the
exercise of the Warrants such shares of Common Stock, Other Securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of Common stock equal to the number of shares of Common Stock
immediately thereto for purchasable and receivable upon the exercise of the
Warrants had such reorganization, reclassification, consolidation, merger or
sale not taken place, and in any such case appropriate provision shall be made
with respect to the rights and interests of the Warrant holder so that the
provisions of the Warrants (including, without limitation, provisions for
adjustment of the Purchase Price and of the number of shares purchasable upon
the exercise of the Warrants) shall thereafter be applicable, as nearly as may
be, in relation to any shares of Common Stock, Other Securities or assets,
thereafter deliverable upon the exercise of the Warrants.
Purchaser Initials_______
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7. NOTICES: Any notice or other document required or permitted to be given or
delivered to the Warrant holder shall be delivered or sent by certified mail to
the Warrant holder at last address shown on the books of the Company maintained
for the registry and transfer of the Warrants. Any notice or other document
required or permitted to be given or delivered to the Company shall be delivered
or sent by certified or registered mail to the principal office of the Company.
8. NO RIGHTS AS SHAREHOLDERS: Limitation of Liability: This Warrant shall not
entitle any holder hereof to any of the rights of a shareholder of the Company.
No provision hereof, in the absence of affirmative action by the holder hereof
to purchase shares of Common Stock, and no mere enumeration herein of the rights
or privileges of the holder hereof, shall give rise to any liability of such
holder for the Purchase Price or as a shareholder of the Company whether such
liability is asserted by the Company or by creditors of the Company.
9. GOVERNING LAW: This Warrant shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware, exclusive of its conflict
of laws rules.
10. MISCELLANEOUS: This Warrant and any provision hereof may be changed, waived,
discharged, or terminated only by an instrument in writing signed by the party
(or any predecessor in interest thereof) against which enforcement of the same
is sought. The headings in this Warrant are for purposes of reference only and
shall not affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by a duly
authorized officer, and to be dated as of the ______ day of _______, 1999.
Re-Track USA, Inc.
___________________________ By:__________________________
Notary Public Xxxxxx Xxxxx, President
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1993 (THE "1993 ACT") OR UNDER THE SECURITIES LAWS OF ANY
OTHER STATE AND MAY NOT BE TRANSFERRED WITHOUT (i) THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT
REGISTRATION UNDER THE 1993 ACT OR THE SECURITIES LAWS OF ANY APPLICATION STATE;
OR (ii) SUCH REGISTRATION."
Purchaser Initials_______
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FULL SUBSCRIPTION FORM
To be Executed By the Registered Warrant holder if
He Desires to Exercise in Full the Within Warrant
The undersigned hereby exercises the right to purchase the __________________
shares of Common Stock covered by the within Warrant at the date of this
subscription and herewith makes payment of the sum of $_________________________
representing the Purchase Price of $ ___________ per share in effect at that
date. Certificates for such shares shall be issued in the name of and delivered
to the undersigned, unless otherwise specified by written instructions, signed
by the undersigned and accompanying this subscription.
Dated:____________________
Signature: _____________________
Address: _____________________
_____________________
Purchaser Initials_______
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PARTIAL SUBSCRIPTION FORM
To Be Executed by the Registered Warrant holder if He
Desires to Exercise in Part Only the Within Warrant
The undersigned hereby exercises the right to purchase ______________ shares of
the total shares of Common Stock covered by the within Warrant at the date of
this subscription and herewith makes payment of the sum of $ __________
representing the Purchase Price of $ _______ per share in effect at this date.
Certificates for such shares and a new Warrant of like tenor and date for the
balance of the shares not subscribed for (if any) shall be issued in the name of
and delivered to the undersigned, unless otherwise specified by written
instructions, signed by the undersigned and accompanying this subscription.
[The following paragraph need be completed only if the Purchase Price and number
of shares of Common Stock specified in the within Warrant have been adjusted
pursuant to Section 6.]
The shares hereby subscribed for constitute _____________ shares of Common Stock
(to the nearest whole share) resulting form adjustment of ______________ shares
of the total of ___________ shares of Common Stock covered by the within
Warrant, as said shares were constituted at the date of the Warrant.
Dated:____________________
Signature: _____________________
Address: _____________________
_____________________
Purchaser Initials_______
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