<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
CAPITA RESEARCH GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.001 PAR VALUE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
139908 107
- --------------------------------------------------------------------------------
(CUSIP Number)
James R. Salim
3510 Turtle Creek #2D
Dallas, Texas 75219
With a copy to:
Joshua Mond
Godwin White & Gruber, P.C.
901 Main Street, Suite 2500
Dallas, Texas 75202-3727
(214) 939-4400
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 5, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d- 1(b)(3) or (4), check the following [ ].
<PAGE> 2
CUSIP No. 23251P 10 2 13D Page 4 of 5 Pages
- --------------------- -----------------
- --------------------------------------------------------------------------------
1 Names of Reporting Persons
I.R.S Identification Nos. of Above Persons
James R. Salim
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2 Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
PF
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5 Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 Citizenship of Place of Organization
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power
SHARES 1,726,537
BENEFICIALLY -----------------------------------------------------
OWNED BY 8 Shared Voting Power
EACH 0
REPORTING -----------------------------------------------------
PERSON WITH 9 Sole Dispositive Power
1,726,537
-----------------------------------------------------
10 Shared Dispositive Power
0
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,726,537
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
9.2%
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14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
<PAGE> 3
The summary descriptions contained in this statement of certain
agreements and documents are qualified in their entirety by reference to the
complete texts of such agreements and documents filed as Exhibits hereto, which
agreements and documents are hereby incorporated herein by reference.
Item 1. Security and Issuer
This statement relates to the Common Stock, $.001 par value per share
(the "Common Stock"), of Capita Research Group, Inc., a Nevada corporation (the
"Company"). The principal executive offices of the Company are located at 900 B.
Eighth Avenue, Suite 300, King of Prussia, Pennsylvania 19406.
Item 2. Identity and Background
(a) - (c) James R. Salim is an individual engaged in the business of
investing. His address is 3510 Turtle Creek, #2D, Dallas, Texas 75219.
(d) - (e) During the last five years, James R. Salim has not (A) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (B) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with such laws.
(f) James R. Salim is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration
The amounts paid by James R. Salim for the Common Stock are from Mr.
Salim's personal funds. The date and amount of such purchases are attached
hereto as Exhibit 1.
Item 4. Purpose of Transaction
The shares of Common Stock were acquired for investment purposes. James
R. Salim does not have any intention of acquiring control over the Company;
however, depending upon market and other conditions, James R. Salim may acquire
additional shares of Common Stock for investment purposes if such shares become
available at prices that are attractive, or may dispose of all or a portion of
the shares currently owned or hereinafter acquired.
James R. Salim does not have any plans or proposals of the type set
forth in Paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) As of the close of business on August 13, 1999, James R. Salim
beneficially owns 1,726,537 shares of Common Stock, constituting approximately
9.2% of the outstanding shares of Common Stock. Such amount assumes (i) exercise
of all warrants held by Mr. Salim and (ii) conversion of all outstanding amounts
owed by the Company to Mr. Salim as provided for in the Convertible Note (as
defined in Item 6).
<PAGE> 4
(b) James R. Salim has sole power to vote or to direct the vote of the
shares of Common Stock referred to in paragraph (a) above and sole power to
dispose or to direct the disposition of any of such shares.
(c) Except as described in Item 3 and Item 6, James R. Salim has not
effected any transactions in shares of Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer
On August 5, 1999, the Company and James R. Salim entered into a loan
agreement (the "Loan Agreement") which provided for a loan of up to $300,000
from Mr. Salim to the Company. Under the terms of the Loan Agreement, Mr. Salim
funded $100,000 on August 5, 1999 and is obligated to fund an additional
$100,000 on September 1, 1999 and on October 1, 1999. The loan bears interest at
the prime rate and interest is payable on demand upon 10 days' written prior
notice, which notice may not be given prior to February 5, 2000. The loan is
evidenced by a convertible note (the "Convertible Note"). The Convertible Note
provides that Mr. Salim shall have the right at any time to convert all or any
part of the unpaid principal amount of the loan into shares of Common Stock at a
price (the "Conversion Price") equal to the lesser of (i) the average closing
bid price of the Common Stock (as reported by Bloomberg, L.P.) over the five
trading day period ending on the day prior to the date the Convertible Note or a
portion thereof is surrendered for conversion or (ii) $.25 per share, as
adjusted for any stock dividends, stock splits or reverse stock splits occurring
subsequent to August 5, 1999. In addition, Mr. Salim may, at his election,
receive interest in the form of common stock rather than cash, with such
interest payable being converted into Common Stock at the Conversion Price.
In addition to the Loan Agreement, Mr. Salim received 300,000 warrants
(the "Warrants") to purchase shares of Common Stock at a purchase price of $.25.
The Warrants are exercisable until August 5, 2002. In addition, the Company and
Mr. Salim entered into a registration rights agreement pursuant to which in
certain events, Mr. Salim may be offered the opportunity by the Company to have
the Company register for resale the shares of Common Stock which relate to the
Warrants and the Convertible Note. In addition, at any time after April 1, 2000
in the event that Mr. Salim has not been offered the opportunity to register
such shares of Common Stock, that Mr. Salim has the right to request the Company
register such shares under the Securities Act of 1933, as amended.
Except as set forth in this Item 6, James R. Salim does not have
contract, arrangement, understanding or relationship (legal or otherwise) with
any person with respect to any securities of the Company, including but not
limited to the transfer or voting of any of such securities, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees of
profits, division of profits or loss or the giving or the withholding of
proxies.
<PAGE> 5
Item 7. Material to be Filed as Exhibits
Exhibit 1. Schedule of purchases
Exhibit 2. Loan Agreement dated August 5, 1999 between the Company
and James R. Salim
Exhibit 3. Convertible Promissory Note of the Company dated August 5,
1999
Exhibit 4. Warrant Certificate of the Company dated August 5, 1999
Exhibit 5. Registration Rights Agreement between the Company and
James R. Salim dated August 5, 1999
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
August 13, 1999
/s/ James R. Salim
- ----------------------------
James R. Salim
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
Exhibit 1. Schedule of purchases
Exhibit 2. Loan Agreement dated August 5, 1999 between the Company and
James R. Salim
Exhibit 3. Convertible Promissory Note of the Company dated August 5, 1999
Exhibit 4. Warrant Certificate of the Company dated August 5, 1999
Exhibit 5. Registration Rights Agreement between the Company and
James R. Salim dated August 5, 1999
</TABLE>
<PAGE> 1
EXHIBIT 1
<TABLE>
<CAPTION>
Date of Purchase Number of Shares Cost
- ---------------- ---------------- ----
<S> <C> <C>
7/1/99 74,000 $12,509.00
7/29/99 75,000 12,678.00
8/4/99 (5,000)*
8/6/99 525,537 175,059.37
8/6/99 93,500 24,599.85
8/6/99 93,500 26,937.35
8/9/99 130,000 35,883.00
8/10/99 50,000 26,253.00
8/12/99 (10,000)*
</TABLE>
* indicates sale
<PAGE> 1
EXHIBIT 2
LOAN AGREEMENT
This Loan Agreement, dated as of August 5, 1999, is between Capita
Research Group, Inc., a Nevada corporation ("Borrower"), and Jim Salim (the
"Lender").
WHEREAS, the Lender has agreed to provide loans to Borrower in the
aggregate amount of up to $300,000;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally
bound hereby, covenant and agree as follows:
ARTICLE I
THE CREDIT
1.01 Loans. Subject to the terms and conditions hereof, and relying
upon the representations and warranties of Borrower set forth herein, the
Lender agrees to make loans to Borrower (individually, a "Loan" and,
collectively, the "Loans") in the amount of $100,000 each on each of the
following dates (each, a "Loan Disbursement Date"): the date hereof, September
1, 1999 and October 1, 1999 (the later such date being the "Commitment
Expiration Date"), for an aggregate amount outstanding at any one time not
exceeding $300,000. On the terms and subject to the conditions of this
Agreement, Borrower may prepay the Loans.
1.02 Use of the Loans. Borrower shall use the proceeds of the Loans
for general corporate purposes.
1.03 The Note. The obligation of Borrower to repay the aggregate
unpaid principal amount of the Loans hereunder shall be evidenced by a
convertible promissory note (the "Note") in the form of Exhibit A annexed
hereto, payable to the order of the Lender, duly executed by Borrower and
delivered to the Lender and bearing interest at the rate equal to the prime or
reference rate published from time to time by Citibank, N.A., New York, New
York. Interest will be payable on demand upon 10 days' prior written notice,
which notice may not be delivered prior to six months after the initial Loan
Disbursement Date. The Lender shall, and is hereby authorized by Borrower to,
set forth on the schedule which forms a part of the Note appropriate notations
regarding the principal amount and date of each Loan made hereunder and the
other information provided therein, which notations shall be made
contemporaneously and shall be prima facie evidence of the information set
forth therein; provided, however, that the failure to make any such notations
or an error in making any such notations shall not limit, expand or otherwise
affect the obligations of Borrower hereunder or under the Note. The Note shall
cease to permit Loans on and after the Commitment Expiration Date and, as
provided therein, the principal amount of Loans outstanding shall be paid with
respect to each Loan on the first anniversary of the applicable Loan
Disbursement Date.
<PAGE> 2
1.04 Prepayments. Borrower shall have the right, at its option, to
prepay the Loans (or any portion thereof) in whole at any time or in part from
time to time, without premium or penalty. Borrower shall give notice (which
shall be irrevocable) to the Lender not later than the fifth business day
preceding the date of prepayment, specifying the aggregate principal amount to
be repaid and the prepayment date, whereupon the principal amount specified in
such notice, together with interest on the amount of each such prepayment to
the date of prepayment, shall become due and payable on such date of
prepayment.
1.05 Payments. All payments and prepayments to be made with respect to
principal of or interest on each of the Loans shall be made to the Lender at
its address set forth below (or at any other payment office in the United
States of America previously designated by the Lender to Borrower in writing),
on the day when due, in lawful money of the United States of America.
Notwithstanding the foregoing, at the option of the Lender exercised in the
demand for interest, interest will be payable in shares of common stock, $.001
par value ("Common Stock"), of Borrower valued as set forth in the Note. The
Lender or any other holder of the Note is hereby authorized to endorse on the
Note an appropriate notation evidencing each payment made on account of
principal; provided, however, that the failure to make any such notation shall
not limit or expand or otherwise affect the obligations of Borrower under the
Note and payments of principal on the Note shall not be affected by the failure
to make any such notation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Borrower hereby makes the following representations and warranties
which shall survive the execution and delivery of this Agreement and the Note
hereunder:
2.01 Authority; Binding Agreement. The execution and delivery of this
Agreement and the other agreements contemplated hereby by Borrower, the
performance by Borrower of its covenants and agreements hereunder and
thereunder and the consummation by Borrower of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action.
This Agreement and the other agreements contemplated hereby constitute the
valid and legally binding agreements of Borrower, enforceable in accordance
with their respective terms.
2.02 No Legal Bar; Conflicts. Neither the execution and delivery of
this Agreement nor the other agreements contemplated hereby, nor the
consummation of the transactions contemplated hereby or thereby, violates or
will violate any provision of the Certificate of Incorporation or By-Laws of
Borrower or any law, rule, regulation, writ, judgment, injunction, decree,
determination, award or other order of any court, government, or governmental
agency or instrumentality, domestic or foreign, or violates or will violate, or
conflicts with or will conflict with, or will result in any breach of any of
the terms of, or constitutes or will constitute a default under or results in
or will result in the termination of or the creation or imposition of any lien
pursuant to, the terms of any
<PAGE> 3
contract, commitment, agreement, understanding or arrangement of any kind to
which Borrower is a party or by which Borrower or any of the assets of Borrower
is bound. No consents, approvals or authorizations of, or filings with, any
governmental authority or any other person or entity are required in connection
with the execution and delivery of this Agreement by Borrower and the
consummation of the transactions contemplated hereby.
2.03 SEC Filings. All filings made by Borrower with the Securities and
Exchange Commission were true and correct in all material respects when made
and did not contain any material misstatement of fact or fail to state any
material fact necessary to make the statements contained therein not misleading
in the light of the circumstances under which they were made.
ARTICLE III
CONDITIONS PRECEDENT
The obligation of the Lender to make any of the Loans under this
Agreement on any Loan Disbursement Date is expressly made subject to and
contingent upon the truthfulness in all material respects of Borrower's
representations and warranties contained in this Agreement. In addition, the
obligation of the Lender to make the initial Loan under this Agreement is
expressly made subject to and contingent upon (i) the execution and delivery by
Borrower to the Lender of the Warrant Certificate substantially in the form of
Exhibit B annexed hereto providing for a Warrant Price (as defined therein)
equal to 125% of the closing bid price per share of the Common Stock on the
business day immediately preceding the initial Loan Disbursement Date and (ii)
the execution and delivery of the Registration Rights Agreement between the
Lender and Borrower substantially in the form of Exhibit C annexed hereto.
ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
4.01 Events of Default. The entire unpaid principal amount of the
Note, together with all accrued interest thereon, shall, at the option of the
Lender exercised by written notice to Borrower at its principal executive
offices, forthwith become and be due and payable if any one or more of the
following events (herein called "Events of Default") shall have occurred (for
any reason whatsoever and whether such happening shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body), which event (in
the case of an event specified in clause (a), (b), (c) or (d) below) shall have
continued for a period of 90 days and which event shall be continuing at the
time of such notice, that is to say:
(a) if default shall be made in the due and punctual payment
of the principal of the Note when and as the same shall become due and
payable, whether at maturity, by acceleration or otherwise;
<PAGE> 4
(b) if default shall be made in the due and punctual payment
of any interest on the Note when and as such interest shall become due
and payable;
(c) if any representation or warranty of Borrower contained
in this Agreement shall have been breached in any material respect;
(d) if Borrower shall default beyond any period of grace
provided with respect thereto in the payment of principal of or
interest on any obligation in respect of borrowed money when due,
whether by acceleration or otherwise; or if Borrower shall default in
the performance or observance of any other agreement, term or
condition contained in such obligation or in any agreement under which
any such obligation is created, if the effect of any such default is
to cause or permit the holder or holders of such obligations (or a
trustee on behalf of such holder or holders) to cause such obligation
to become due prior to the date of its stated maturity, unless such
holder or holders or trustee shall have waived such default after its
occurrence or unless such holder or holders or trustee shall have
failed to give any notice required to create a default thereunder;
(e) if Borrower shall:
(i) admit in writing its inability to pay its debts
generally as they become due;
(ii) file a petition in bankruptcy or a petition to
take advantage of any insolvency act;
(iii) make an assignment for the benefit of
creditors;
(iv) consent to the appointment of a receiver of
itself or of the whole or any substantial part of its
property;
(v) on a petition in bankruptcy filed against it, be
adjudicated a bankrupt; or
(vi) file a petition or answer seeking
reorganization or arrangement under the Federal bankruptcy
laws or any other applicable law or statute of the United
States of America or any State, district or territory
thereof;
(f) if a court of competent jurisdiction shall enter an
order, judgment, or decree appointing, without the consent of
Borrower, a receiver of Borrower or of the whole or any substantial
part of its property, or
<PAGE> 5
approving a petition filed against it seeking reorganization or
arrangement of Borrower under the Federal bankruptcy laws or any other
applicable law or statute of the United States of America or any State,
district or territory thereof, and such order, judgment or decree shall
not be vacated or set aside or stayed within 90 days from the date of
entry thereof;
(g) if, under the provisions of any other law for the relief
or aid of debtors, any court of competent jurisdiction shall assume
custody or control of Borrower or of the whole or any substantial part
of its property and such custody or control shall not be terminated or
stayed within 90 days from the date of assumption of such custody or
control; or
(h) if final judgment for the payment of money in excess of
$50,000 shall be rendered by a court of record against Borrower and
Borrower shall not discharge the same or provide for its discharge in
accordance with its terms, or shall not procure a stay of execution
thereon within 90 days from the date of entry thereof and within the
period during which execution of such judgment shall have been stayed,
appeal therefrom, and cause the execution thereof to be stayed during
such appeal.
4.02 Remedies. In case any one or more of the Events of Default
specified in Section 4.01 hereof shall have occurred and be continuing, the
Lender may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, whether for the specific performance of any covenant
or agreement contained in the Note or in this Agreement or in aid of the
exercise of any power granted in the Note or in this Agreement, or the Lender
may proceed to enforce the payment of all sums due upon the Note or to enforce
any other legal or equitable right of the Lender.
4.03 Remedies Cumulative. No remedy herein conferred upon the Lender
is intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or under the Note or now or hereafter existing at law or in equity or
by statute or otherwise.
4.04 No Waiver. No course of dealing between Borrower and the Lender
or any delay on the part of the Lender in exercising any rights hereunder or
under the Note shall operate as a waiver of any rights of the Lender.
ARTICLE V
MISCELLANEOUS
5.01 Implied Waivers; Cumulative Remedies; Writing Required. No delay
or failure by the Lender in exercising any right, power or remedy hereunder
shall affect or operate as a waiver thereof, nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such
a right, power or remedy
<PAGE> 6
preclude any further exercise thereof or of any other right, power or remedy.
The rights and remedies hereunder of the Lender are cumulative and not
exclusive of any rights or remedies which it would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of the Lender
of any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing and shall be
effective only to the extent in such writing specifically set forth.
5.02 Notices. All notices and other communications given to or made
upon any party hereto in connection with this Agreement shall, except as
otherwise expressly herein provided, be in writing (including telecopied,
telexed or telegraphic communication) and mailed, telecopied, telexed,
telegraphed or personally delivered to the respective parties, as follows:
Borrower: Capita Research Group, Inc.
591 Shippack Pike, Suite 300
Blue Bell, Pennsylvania 19422
Attention: President
Telecopy: (215) 619-0775
Lender: Mr. Jim Salim
3510 Turtle Creek Boulevard, #2D
Dallas, Texas 75219
Telecopy: (214) 526-0435
or in accordance with any subsequent written direction from the recipient party
to the sending party. All such notices and other communications shall, except
as otherwise expressly herein provided, be effective upon delivery if delivered
by hand, when deposited in the mail, postage prepaid, in the case of mail, and
in the case of telecopy or telex, when received, or in the case of telegraph,
when delivered to the telegraph company, charges prepaid.
5.03 Survival. All representations, warranties, covenants and
agreements of Borrower contained herein or made in writing in connection
herewith shall survive the execution and delivery of this Agreement, the making
of the Loans hereunder and the issuance of the Note, and shall continue in full
force and effect so long as the Note is outstanding and until payment in full
of all of Borrower's obligations hereunder or thereunder.
5.04 Governing Law. This Agreement and the Note and the rights and
obligations of the parties hereto and thereto shall be deemed to be contracts
under the laws of the Commonwealth of Pennsylvania and for all purposes shall
be governed by and construed and enforced in accordance with the laws of such
Commonwealth applicable to agreements made and to be entirely performed in such
Commonwealth. Borrower and the Lender agree that any legal suit, action, or
proceeding arising out of this Agreement or the Note may be instituted in any
Pennsylvania state or Federal court sitting in the City of Philadelphia which
has subject matter jurisdiction and waive any objection which either
<PAGE> 7
of them may now or hereafter have to the laying of venue of any such suit,
action or proceeding in such jurisdiction. Borrower and the Lender further
agree that service of process shall be properly served if served personally or
by registered mail return receipt requested at the address set forth in Section
5.02.
5.05 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Agreement.
5.06 Headings. Section and subsection headings in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
5.07 Counterparts. This Agreement may be executed in any number of
counterparts and by any party hereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together constitute one and the same instrument.
5.08 Binding Effect. This Agreement shall be binding upon and inure to
the benefit only of the parties hereto and their respective successors and
assigns and no party who is not a party hereto shall have any rights hereunder,
including any rights to require Borrower to borrow Loans.
5.09 Payment of Commission. The parties acknowledge that Borrower is
paying Quaker Capital Markets Group a commission equal to seven percent of the
principal amount of each Loan. The Lender shall have no liability for such
commission.
* * *
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
CAPITA RESEARCH GROUP, INC.
By
--------------------------------------
Title:
LENDER:
-------------------------------------
Jim Salim
<PAGE> 1
EXHIBIT 3
CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned CAPITA RESEARCH GROUP, INC., a
Nevada corporation (the "Borrower"), hereby promises to pay to Jim Salim (the
"Lender"), or order, on the first anniversary of each Loan Disbursement Date
(at which time the amount of the loan made on such Loan Disbursement Date shall
be due), the principal sum of Three Hundred Thousand Dollars ($300,000) or, if
less, the aggregate amount of all loans made by Lender to Borrower on or prior
to the Commitment Expiration Date pursuant to Section 1.03 of the Loan
Agreement dated as of the date hereof between Borrower and Lender (as the same
may be amended, modified or supplemented from time to time, the "Loan
Agreement"), less any principal amount hereof converted into common stock,
$.001 par value ("Common Stock"), of Borrower pursuant to the provisions
hereof. Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until payment in full
at the prime or reference rate published from time to time by Citibank, N.A.,
New York, New York. Interest hereon for any period other than a full quarter
shall be computed on the basis of a 360-day year of twelve 30-day months. All
capitalized terms used herein shall, unless otherwise defined herein, have the
meanings for purposes hereof assigned to such terms in the Loan Agreement.
At any time that any principal or interest payment on this Note is
past due for any reason, the rate of interest on such past due principal or
interest shall be the prime or reference rate published from time to time by
Citibank, N.A., New York, New York, plus three percent (3%) per annum, until
such past due principal or interest has been paid in full, to the extent
permitted by applicable law.
All accrued and unpaid interest hereon will be due and payable within
10 days after demand therefor, which demand may not be made until at least six
months after the first Loan Disbursement Date. In addition, all accrued and
unpaid interest hereon will be due and payable upon the payment in full of the
outstanding principal amount of this Note and at the maturity hereof.
Subject to the provisions of the Loan Agreement, payments of both
principal and interest shall be made to Lender at 3510 Turtle Creek Boulevard,
#2D, Dallas, Texas 75219 (or at any other payment office in the United States
of America previously designated to Borrower by Lender), in writing, in lawful
money of the United States of America. Notwithstanding the foregoing, in lieu
of cash, Lender may elect to receive all (but not less than all) of an interest
payment in shares of Common Stock, valued at the then current Conversion Price
(as hereinafter defined, with the date such interest payment is due being
substituted for the Conversion Date in the formula for the determination
thereof) by so indicating in the demand for interest.
<PAGE> 2
Subject to and upon compliance with the provisions hereof, Lender
shall have the right, at Lender's option, at any time or from time to time on
or after 30 days after the first Loan Disbursement Date to convert all or any
part of the unpaid principal amount hereof into shares (the "Shares") of Common
Stock at a price equal to the lesser of (i) the average closing bid price per
share of the Common Stock (as reported by Bloomberg, L.P.) over the five
trading day period ending on the day prior to the date (the "Conversion Date")
this Note or portion hereof is surrendered for conversion or (ii) 150% of the
average closing bid price per share of the Common Stock (as reported by
Bloomberg, L.P. ) over the five trading day period ending on the day prior to
the first Loan Disbursement Date (such price being referred to herein as the
"Conversion Price"), as appropriately adjusted for any stock dividend, stock
split, or reverse stock split occurring subsequent to the first Loan
Disbursement Date. Such right to convert shall be subject to the following
further terms and conditions:
(a) Upon the surrender hereof, accompanied by Lender's written notice
to Borrower that Lender elects to convert this Note, or, if less than the
entire unpaid principal amount hereof is to be converted, the portion hereof to
be converted, Borrower shall issue and deliver to Lender as promptly as
possible, certificates evidencing the Shares as hereinafter set forth. All
Shares of Common Stock issued upon conversion shall be deemed issued as of the
close of business on the Conversion Date. No adjustment shall be made for any
interest accrued hereon or for any dividends on any Shares issued upon
conversion of this Note. Upon conversion of only a part of the unpaid principal
amount of this Note, Borrower shall execute and deliver to or on the order of
Lender, at the expense of Borrower, a new Note in principal amount equal to the
unconverted portion of such unpaid principal amount, which new Note shall be
dated and bear interest from the date to which interest shall have been paid on
such unconverted portion.
(b) If any capital reorganization or reclassification of the capital
stock of Borrower, or consolidation or merger of Borrower with another
corporation, or the sale, transfer or other disposition of all or substantially
all of its properties to another corporation, shall be effected, then, as a
condition of such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition, lawful and adequate provision shall be
made whereby Lender shall thereafter have the right to purchase and receive
upon the basis and upon the terms and conditions herein specified and in lieu
of the Shares of the Common Stock of Borrower immediately theretofore issuable
upon conversion of this Note, such shares of stock, securities or properties as
may be issuable or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore issuable upon conversion of this Note had
such reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition not taken place, and in any such case appropriate provisions
shall be made with respect to the rights and interests of Lender to the end
that the provisions hereof (including without limitation provisions for
adjustment of the Conversion Price) shall thereafter be applicable, as nearly
equivalent as may be practicable in relation to any shares of stock, securities
or properties thereafter deliverable
<PAGE> 3
upon the conversion hereof. Borrower shall not effect any such consolidation,
merger, sale, transfer or other disposition, unless prior to or simultaneously
with the consummation thereof the successor corporation (if other than
Borrower) resulting from such consolidation or merger or the corporation
purchasing or otherwise acquiring such properties shall assume, by written
instrument executed and mailed or delivered to Lender at its last address
appearing on the books of Borrower, the obligation to deliver to Lender such
shares of stock, securities or properties as, in accordance with the foregoing
provisions, Lender may be entitled to acquire. The above provisions of this
subparagraph shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers, or other
dispositions.
(c) No certificates for fractional shares of Common Stock shall be
issued upon conversion of this Note. If the conversion of this Note, or any
portion hereof, results in a fraction of a share, Borrower shall pay, out of
funds legally available therefor, a cash adjustment in respect of such
fractional share in an amount equal to the fair market value thereof.
(d) Borrower agrees that its issuance of this Note shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Shares
upon the conversion of this Note. During the period within which this Note may
be converted into Shares of Common Stock, Borrower shall at all times have
authorized and reserved a sufficient number of Shares to provide for the
conversion of this Note in accordance with the terms hereof. Borrower agrees
that all Shares which shall be issued upon conversion of this Note shall, when
so issued, be free of pre-emptive rights, duly and validly issued and fully
paid and nonassessable.
(e) Lender shall be responsible for payment of any transfer or
issuance tax in respect of the issue of any stock upon conversion of this Note.
Borrower shall not be required to issue or deliver any such stock unless and
until the person or persons requesting the issuance thereof shall have paid to
Borrower the amount of such tax or shall have established to the satisfaction
of Borrower that such tax has been paid.
This Note is the Note referred to in, and is entitled to the benefits
of, the Loan Agreement.
The date and amount of each Loan by Lender to Borrower under the Loan
Agreement, the amount of any prepayment or payment of the principal amount
hereof and the amount of the unpaid balance hereof shall be noted by Lender on
the Schedule annexed hereto and made a part hereof, or on a continuation of
such Schedule attached hereto and made a part hereof which notations shall be
prima facie evidence of the information set forth therein; provided, however,
that the failure of the holder to make or any error in making any such notation
shall not limit or otherwise affect the obligations of Borrower hereunder or
under the Loan Agreement.
<PAGE> 4
Except as otherwise expressly provided in the Loan Agreement, Borrower
waives presentment, demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or
enforcement of this Note and the Loan Agreement.
This Note shall be binding upon Borrower and its successors and shall
inure to the benefit of Lender and its successors and assigns.
This Note shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania applicable to agreements made and to
be performed entirely within such Commonwealth.
BORROWER:
CAPITA RESEARCH GROUP, INC.
By
-------------------------------------
Title:
<PAGE> 5
Schedule of Loans
and Principal Payments
<TABLE>
<CAPTION>
Unpaid
Amount Amount of Principal Name and Signature of Person
Date Of Loan Principal Paid Balance Making Notation
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
EXHIBIT 4
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF SUCH WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT.
W1 WARRANT CERTIFICATE
300,000 Warrants to Purchase
Common Stock
Void After August 5, 2002
CAPITA RESEARCH GROUP, INC.
(Incorporated under the laws of the State of Nevada)
This is to certify that, for value received, Jim Salim is the owner
(the "Owner") of the number of Warrants set forth above, each of which is
nontransferable and entitles the Owner to purchase from CAPITA RESEARCH GROUP,
INC. (herein called the "Corporation"), at any time (except as hereinafter
provided) before 5 P.M. (New York time) on August 5, 2002, one Stock Unit (as
hereinafter defined) at a purchase price of $_______ (herein called the
"Warrant Price"). For purposes of this Warrant Certificate, a Stock Unit shall
consist of one fully paid and non-assessable share of common stock, $.001 par
value (herein called the "Common Stock"), of the Corporation, as such stock is
constituted on August 5, 1999, subject to adjustment as hereinafter set forth.
Subject to the provisions hereof, the Warrants represented by this
Warrant Certificate may be exercised by the Owner in whole or in part by
surrender of this Warrant Certificate at the principal executive offices of the
Corporation with the form of election to subscribe attached hereto duly
executed and with payment in full to the Corporation of the Warrant Price for
each of the Stock Units so purchased. Payment of such Warrant Price shall be
made in cash or by certified or official bank check. Thereupon, the Warrants
shall be deemed to have been exercised and the Owner shall become a holder of
record of the shares of Common Stock comprising the Stock Units so purchased
(or of the other securities or property to which the Owner is entitled upon
such exercise) for all purposes, and certificates for such shares of Common
Stock so purchased shall be delivered to the Owner within a reasonable time
after the Warrants shall have been exercised as set forth hereinabove. If only
a portion of the Warrants shall be exercised, the Owner shall be entitled to
receive a similar warrant certificate of like tenor and date covering the
number of Warrants which shall not have been exercised, unless such Warrants
shall have expired.
The Corporation covenants and agrees that all shares of Common Stock
which may be issued upon the exercise of the rights represented by this Warrant
Certificate will, upon issuance, be validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof (other than taxes in
<PAGE> 2
2
respect of any transfer occurring contemporaneously with such issue). The
Corporation further covenants and agrees that, during the period within which
the Warrants represented by this Warrant Certificate may be exercised, the
Corporation will at all times have authorized and reserved a sufficient number
of shares of Common Stock to provide for the exercise of the Warrants
represented by this Warrant Certificate, and will at its expense expeditiously
upon each such reservation of shares of Common Stock use its best efforts to
procure the listing thereof (subject to issuance or notice of issuance) on all
stock exchanges on which the Common Stock is then listed. The rights of the
Owner shall be subject to the following further terms and conditions:
1.1.(a) The number of shares of Common Stock comprising a Stock Unit
shall be subject to adjustment from time to time as follows:
(i) If the number of shares of Common Stock outstanding at
any time after the date hereof is increased by a stock dividend
payable in shares of Common Stock or by a subdivision or split-up of
Common Stock, then, immediately following the record date fixed for
the determination of holders of Common Stock entitled to receive such
stock dividend, subdivision or split-up, the number of shares of
Common Stock comprising a Stock Unit shall be appropriately increased
so that the number of shares of Common Stock issuable on exercise of
each Warrant shall be increased in proportion to such increase of
outstanding shares.
(ii) If the number of shares of Common Stock outstanding at
any time after the date hereof is decreased by a combination of the
outstanding shares of Common Stock, then, immediately following the
record date for such combination, the number of shares of Common Stock
comprising a Stock Unit shall be appropriately decreased so that the
number of shares of Common Stock issuable on exercise of each Warrant
shall be decreased in proportion to such decrease in outstanding
shares.
(iii) In case the Corporation shall declare a cash dividend
upon the Common Stock payable otherwise than out of earnings or earned
surplus legally available therefor under the laws of the State of
Delaware or shall distribute to holders of Common Stock shares of its
capital stock (other than Common Stock), stock or other securities of
other persons, evidences of indebtedness issued by the Corporation or
other persons, assets (excluding cash dividends) or options or rights
(excluding options to purchase and rights to subscribe for Common
Stock or other securities of the Corporation convertible into or
exchangeable for Common Stock), then, in each such case, immediately
following the record date fixed for the determination of the holders
of Common Stock entitled to receive such dividend or distribution, the
number of shares of Common Stock comprising a Stock Unit thereafter
shall be adjusted by multiplying such number by a fraction of which
the denominator shall be an amount equal to the remainder of (x) the
aggregate Current Market Price of all outstanding shares of Common
Stock less (y) the aggregate amount of such cash dividend or the
aggregate fair market value (as determined by the Board of Directors,
whose determination shall be conclusive) of the stock, securities,
evidences of indebtedness, assets, options or rights so distributed,
as the case may be, and of which the
<PAGE> 3
3
numerator shall be the aggregate Current Market Price of all
outstanding shares of Common Stock. Such adjustment shall be made on
the date such dividend or distribution is made, and shall become
effective at the opening of business on the business day next
following the record date for the determination of stockholders
entitled to such dividend or distribution.
(iv) In case, at any time after the date hereof, of any
capital reorganization, or any reclassification of the stock of the
Corporation (other than a change in par value or from par value to no
par value or from no par value to par value or as a result of a stock
dividend or subdivision, split-up or combination of shares), or the
consolidation or merger of the Corporation with or into another person
(other than a consolidation or merger in which the Corporation is the
continuing corporation and which does not result in any change in the
Common Stock) or of the sale or other disposition of all or
substantially all the properties and assets of the Corporation as an
entirety to any other person, each Warrant shall after such
reorganization, reclassification, consolidation, merger, sale or other
disposition be exercisable for the kind and number of shares of stock
or other securities or property of the Corporation or of the
corporation resulting from such consolidation or surviving such merger
or to which such properties and assets shall have been sold or
otherwise disposed to which the Owner would have been entitled if
immediately prior to such reorganization, reclassification,
consolidation, merger, sale or other disposition he had exercised such
Warrant for Common Stock. The provisions of this Section 1.1 shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales or other dispositions.
(v) All calculations under this paragraph (a) shall be made to
the nearest cent or to the nearest one hundredth (1/100) of a share,
as the case may be.
(vi) For the purpose of any computation pursuant to this
paragraph (a) or Section 1.2, the Current Market Price at any date of
one share of Common Stock shall be deemed to be the average of the
daily closing prices for Common Stock for the 30 consecutive business
days ending no more than 15 business days before the day in question
(as adjusted for any stock dividend, split, combination or
reclassification that took effect during such 30 business-day period).
The closing price for each day shall be the last reported sale price
regular way or, in case no such reported sales take place on such day,
the average of the last reported bid and asked prices regular way, in
either case on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or as quoted on the
Nasdaq National Market System or Nasdaq SmallCap Market, or if not
listed or admitted to trading on any national securities exchange or
so quoted, the average of the highest reported bid and lowest reported
asked prices as furnished by The National Quotation Bureau
Incorporated, all as adjusted; provided, however, that if the Common
Stock is not traded in such manner that the quotations referred to in
this clause (vi) are available for the period required hereunder,
Current Market Price shall be deemed to be the Share Net Asset Value
(as used herein the term "Share Net Asset Value" shall mean the
aggregate net asset value of the Corporation as shown on its most
recent available balance sheet divided by the outstanding number of
<PAGE> 4
4
shares of Common Stock, each determined on the assumption that the
Warrants have been exercised).
(vii) In any case in which the provisions of this paragraph
(a) shall require that an adjustment shall become effective
immediately after a record date for an event, the Corporation may
defer until the occurrence of such event (x) issuing to the Owner with
respect to any Warrant exercised after such record date and before the
occurrence of such event, the additional shares of Common Stock
issuable upon such exercise by reason of the adjustment required by
such event over and above the shares of Common Stock issuable upon
such exercise before giving effect to such adjustment and (y) paying
to the Owner any amount in cash in lieu of a fractional share of
Common Stock pursuant to Section 1.2; provided, however, that the
Corporation shall deliver to the Owner a due bill or other appropriate
instrument evidencing the Owner's right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such
adjustment.
(b) In the event the Corporation shall propose to take any action of
the types described in clauses (i), (ii), (iii) or (iv) of paragraph (a) of
this Section 1.1, the Corporation shall give notice to the Owner in the manner
set forth in Section 1.3, which notice shall specify the record date, if any,
with respect to any such action and the date on which such action is to take
place. Such notice shall also set forth such facts with respect thereto as
shall be reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the number of
shares of Common Stock comprising a Stock Unit and the number, kind or class of
shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon exercise of
Warrants. In the case of any action which would require the fixing of a record
date, such notice shall be given at least 20 days prior to the date so fixed,
and in case of all other action, such notice shall be given at least 30 days
prior to the taking of such proposed action. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of any such
action.
(c) In the event that at any time as a result of an adjustment made
pursuant to paragraph (a) of this Section 1.1 the Owner shall become entitled
with respect to any Warrants thereafter surrendered for exercise to receive any
shares of the Corporation or another corporation other than shares of Common
Stock, the provisions of this Section 1.1 and Section 1.2 with respect to the
Common Stock shall apply on like terms to any such other shares.
1.2. No fractional share of Common Stock shall be issued upon the
exercise of Warrants, but in lieu thereof the Corporation shall pay, upon
exercise in full of the Warrants represented by this Warrant Certificate, out
of funds legally available therefor, a cash adjustment in respect of such
fractional share in an amount equal to the same fraction of the then Current
Market Price.
1.3. The Corporation will, within 120 days after the end of each of
its
<PAGE> 5
5
fiscal years, mail to the Owner, at the address of such holder shown on the
books of the Corporation, a certificate of the independent public accountants
for the Corporation (i) specifying the Share Price in effect as of the end of
such fiscal year and the number of shares of Common Stock, or the kind and
amount of any securities or property other than shares of Common Stock,
comprising a Stock Unit and (ii) setting forth in reasonable detail the facts
requiring any adjustments made during such fiscal year.
2.1. The issue of any stock or other certificate upon the exercise of
the Warrants shall be made without charge to the Owner for any transfer or
issuance tax in respect of the issue thereof. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any certificate in a name other
than that of the Owner, and the Corporation shall not be required to issue or
deliver any such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Corporation the amount of such tax or
shall have established to the satisfaction of the Corporation that such tax has
been paid.
2.2. This Warrant Certificate and the rights hereunder are not
transferable. In addition, the Warrants evidenced hereby may not be exercised,
and any shares of Common Stock issued upon any exercise thereof may not be
transferred, unless, in the opinion of counsel, who shall be counsel reasonably
acceptable to the Corporation, such exercise or transfer, as the case may be,
would not result in a violation of the provisions of the Securities Act of
1933. The Owner and any holder of any shares of Common Stock issued upon
exercise of any such Warrants, by taking or holding the same, consents to and
agrees to be bound by the provisions of this Section 2.2.
2.3. If this Warrant Certificate shall be lost, stolen, mutilated or
destroyed, the Corporation shall on such terms as to indemnify or otherwise
protect the Corporation as the Corporation may in its discretion impose, issue
a new warrant certificate of like denomination, tenor and date as the Warrant
Certificate so lost, stolen, mutilated or destroyed. Any such new warrant
certificate shall constitute an original contractual obligation of the
Corporation, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant Certificate shall be at any time enforceable by anyone.
2.4. The Corporation may deem and treat the Owner as the absolute
owner of this Warrant Certificate for all purposes and shall not be affected by
any notice to the contrary.
2.5. This Warrant Certificate and the Warrants evidenced hereby shall
not entitle the Owner to any rights of a stockholder of the Corporation either
at law or in equity, including, without limitation, the right to vote, to
receive dividends or other distributions, to exercise any pre-emptive rights or
to receive any notice of meetings of stockholders or of any other proceedings
of the Corporation.
2.6. This Warrant Certificate, in all events, shall be wholly void and
have no effect after 5 P.M. (New York time) on August 5, 2002.
<PAGE> 6
6
2.7. In the event that one or more of the provisions of this Warrant
Certificate shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Warrant Certificate, but this
Warrant Certificate shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
2.8. This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be entirely performed within such State, except to the extent of the
mandatory rules of the State of Nevada with respect to the formal requisites
for authorization of a security and rights and duties with respect to register
of transfer. Dated: August 5, 1999
CAPITA RESEARCH GROUP, INC.
By
-------------------------------------
<PAGE> 7
7
FORM OF EXERCISE
(to be executed by the registered holder hereof)
The undersigned hereby exercises the right to purchase ________ shares
of common stock, $.001 par value (the "Common Stock"), of CAPITA RESEARCH
GROUP, INC. evidenced by the within Warrant Certificate and herewith makes
payment of the purchase price in full. Kindly issue certificates for shares of
Common Stock in accordance with the instructions given below. The certificate
for the unexercised balance of the Warrants evidenced by the within Warrant
Certificate, if any, will be registered in the name of the undersigned.
Dated:
-------------------------------
Instructions for registration of stock
- --------------------------------------
Name (please print)
Social Security or Other Identifying
Number:
-------------------------------
Address:
- --------------------------------------
Street
- --------------------------------------
City, State and Zip Code
<PAGE> 1
EXHIBIT 5
REGISTRATION RIGHTS AGREEMENT dated as of August 5, 1999 (this
"Agreement") between Capita Research Group, Inc., a Nevada corporation (the
"Corporation"), and Jim Salim (the "Stockholder").
W I T N E S S E T H:
WHEREAS, the Corporation desires to provide the Stockholder with
certain registration rights and the parties wish to make the representations
and enter into the covenants set forth herein.
NOW, THEREFORE, in consideration of the mutual benefits to be derived
and the conditions and promises herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Registration of Common Stock. (a) In the event that, at any time,
the Corporation proposes to register the sale of any shares of its common
stock, $.001 par value, ("Common Stock") to be issued by the Corporation or
sold by any holder of shares of Common Stock (the "Registration Shares") under
the Securities Act of 1933, as amended (the "Securities Act"), other than
pursuant to a registration statement on Forms S-4 or S-8, or any successor to
such Forms, for the purpose of the issuance, sale or other transfer of the
Registration Shares by the Corporation or such holder, the Corporation shall
mail or deliver to the Stockholder at least 25 days prior to the filing of the
registration statement covering such Registration Shares, a written notice (a
"Registration Notice") of its intention so to register the Registration Shares,
and specifying the date by which the Supplemental Notice referred to in Section
1(b) below must be returned to the Corporation.
(b) In the event that a Registration Notice shall have been so mailed
or delivered, the Stockholder, at such person's election, may mail or deliver
to the Corporation a written notice (a "Supplemental Notice") (i) specifying
the number of shares of Common Stock ("Supplemental Registration Shares")
issued or issuable upon the exercise of Warrants and/or the conversion of, or
as interest upon, that certain Convertible Promissory Note, in each case
acquired by the Stockholder pursuant to the Loan Agreement dated as of the date
hereof between the Corporation and the Stockholder, proposed to be sold or
otherwise transferred by the Stockholder, (ii) describing the proposed manner
of sale or other transfer thereof and (iii) requesting the registration thereof
under the Securities Act; provided, however, that such Supplemental Notice
shall be so mailed or delivered by the Stockholder not more than 15 days after
the date of the Registration Notice.
(c) From and after receipt of a Supplemental Notice, the Corporation
shall, subject to the prior sale or other transfer of some or all of such
Registration Shares, use its reasonable best efforts to cause the Supplemental
Registration Shares specified in such Supplemental Notice to be registered
under the Securities Act and to effect and to comply with all such regulatory
qualifications and requirements as may be necessary to permit the sale or other
transfer of such Supplemental Registration Shares in the manner described in
such Supplemental Notice, including, without limitation, qualifications under
applicable blue sky or other state
<PAGE> 2
securities laws (provided that the Corporation shall not be required in
connection therewith to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction); provided, however,
that (i) if in the case of an underwritten public offering of the Registration
Shares the managing underwriter shall advise the Corporation that the inclusion
of some or all of such Supplemental Registration Shares would, in such managing
underwriter's judgment, materially interfere with the proposed distribution of
the Registration Shares, then the Corporation may, upon written notice to the
Stockholder, reduce or eliminate the Supplemental Registration Shares otherwise
to be included in the registration statement (if and to the extent such
reduction or elimination is indicated by such managing underwriter as necessary
to eliminate such interference), (ii) if any firm of counsel representing the
Corporation in connection with such registration or representing the
Stockholder that is reasonably satisfactory to the Corporation shall advise the
Corporation and the Stockholder in writing that in its opinion the registration
under the Securities Act contemplated hereby is not necessary to permit the
sale of the Supplemental Registration Shares in the intended method of
disposition by the Stockholder, then the Corporation shall not be required to
take any action with respect to such registration or other steps contemplated
hereby and (iii) the Corporation shall have the right to delay or abandon such
registration at any time in the event that the Board of Directors of the
Corporation determines in good faith that such delay or abandonment is in the
best interest of the Corporation.
(d) At any time after April 1, 2000, in the event that the Stockholder
shall not have theretofore been offered the opportunity to register the
Stockholder's Supplemental Registration Shares pursuant to Sections 1(a)
through 1(c), the Stockholder shall have the right to request that the
Corporation effect the registration under the Securities Act of any or all
Supplemental Registration Shares. The Corporation shall not be obligated to
file and cause to become effective more than one registration statement in
which Supplemental Registration Shares are registered pursuant to this
subsection (d). The Stockholder's rights under this subsection (d) shall
terminate upon the second anniversary of the date hereof.
(e) In the event that the Stockholder, if the Stockholder has the
right to do so, exercises such person's rights under Section 1(d), the
Corporation shall use its reasonable best efforts to cause the sale of the
Supplemental Registration Shares to be registered under the Securities Act and
to effect and to comply with all such regulatory qualifications, compliances
and requirements as may be necessary to permit the sale or other transfer of
such Supplemental Registration Shares, in the manner described in such request,
including, without limitation, qualifications under applicable blue sky or
other state securities laws (provided that the Corporation shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction); provided,
however, that (i) if any firm of counsel representing the Corporation in
connection with any such registration shall advise the Corporation and the
Stockholder in writing that in its opinion the registration under the
Securities Act contemplated hereby is not necessary to permit the sale of the
Supplemental Registration Shares in the intended method of disposition by the
Stockholder, then the Corporation shall not be required to take any action with
respect to such registration or other steps contemplated hereby and (ii) the
Corporation shall have the right to delay such registration
2
<PAGE> 3
for one period of up to 120 days by written notice to the Stockholder in the
event that the Board of Directors of the Corporation determines in good faith
that such delay is in the best interests of the Corporation, provided that the
Stockholder shall be entitled to withdraw such request within 30 days of
receipt of such notice and if such request is withdrawn, such registration
shall not constitute a registration to which the Stockholder is entitled
pursuant to Section 1(d).
(f) If and whenever the Corporation is required by the provisions of
this Section 1 to use its reasonable best efforts to effect the registration
under the Securities Act of any securities requested to be so registered by the
Stockholder, the Corporation will, as promptly as practicable:
(i) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to
such securities and use its reasonable best efforts to cause such
registration statement to become effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period from the date of the effectiveness
thereof through the earlier of (1) the date which is nine (9) months
after the date of effectiveness thereof and (2) the date on which all
Supplemental Registration Shares included in such registration
statement shall have been sold or otherwise disposed of by the
Stockholder pursuant to such registration statement, and to comply
with the provisions of the Securities Act with respect to the sale or
other disposition of all shares of Common Stock covered by such
registration statement whenever the Stockholder shall desire to sell
or otherwise dispose of the same within such period;
(iii) furnish to the Stockholder such number of copies of a
prospectus, including a preliminary prospectus and final prospectus,
in conformity with the requirements of the Securities Act, and such
other documents as may reasonably be requested thereby in order to
facilitate the public sale or other disposition of such shares of
Common Stock owned thereby;
(iv) notify the Stockholder promptly of any request by the
Commission for the amendment or supplement of such registration
statement or prospectus or for additional information, and notify the
Stockholder promptly of the filing of each amendment or supplement to
such registration statement or prospectus;
(v) advise the Stockholder, promptly after it shall receive
notice, of the issuance of any stop order by the Commission suspending
the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its
reasonable best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such stop order should be issued;
3
<PAGE> 4
(vi) with respect to any registration statement being
prepared as a result of the exercise of rights pursuant to Section
1(d) hereof relating to an underwritten offering, upon the request of
the Stockholder, the Corporation shall cooperate with the Stockholder
to obtain and furnish at the closing provided for in the underwriting
agreement (1) an opinion of counsel to the Corporation, dated such
date, addressed to the underwriters and to the Stockholder registering
the sale of shares of Common Stock, and (2) a "cold comfort" letter
from the independent certified public accountants of the Corporation,
dated such date, addressed to the underwriters and to the Stockholder,
in each case, covering substantially the same matters with respect to
the issuer, such registration statement (and the prospectus included
therein) and with respect to the events subsequent to the date of the
financial statements included in such registration statement, as are
customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten
public offerings of securities; and
(vii) notify the Stockholder, in writing, at any time when a
prospectus relating to such shares of Common Stock is required to be
delivered under the Securities Act within the appropriate period
mentioned in clause (ii) immediately preceding, of the happening of
any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and promptly prepare (and file with the Commission) and
furnish to the Stockholder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such shares of
Common Stock, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.
(g) The Stockholder agrees to furnish the Corporation such information
regarding itself and the proposed distribution of Supplemental Registration
Shares by the Stockholder as the Corporation may from time to time reasonably
request in writing in order to prepare a registration statement and prospectus
or any supplement or amendment thereto pursuant to the Securities Act and the
rules and regulations promulgated thereunder.
(h) The Stockholder agrees that, upon receipt of a written notice from
the Corporation of the happening of any event of the kind described in clause
(vii) of Section 1(f) above, it will forthwith discontinue its disposition of
Supplemental Registration Shares pursuant to the registration statement
relating to such Supplemental Registration Shares until its receipt of the
copies of the supplemented or amended prospectus contemplated by clause (vii)
of Section 1(f) above and, if so requested by the Corporation in writing, will
deliver to the Corporation (at the Corporation's expense) all copies then in
its possession, other than permanent file copies, of
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the prospectus relating to such Supplemental Registration Shares; provided,
however, that in the event that the Stockholder discontinues its disposition of
Supplemental Registration Shares pursuant to the foregoing provisions, the nine
month period for the effectiveness of the registration statement shall be
extended by the period during which the Stockholder discontinued its
disposition.
(i) The Corporation shall pay all expenses (the "Registration
Expenses") necessary to effect under the Securities Act any registration
statements, amendments or supplements filed pursuant to this Section 1 (other
than any underwriters' discounts and commissions and any brokerage commissions
and fees payable with respect to shares of Common Stock sold by the Stockholder
and legal fees and expenses of counsel to the Stockholder), including, without
limitation, printing expenses, fees of the Commission and the National
Association of Securities Dealers, Inc., expenses of compliance with blue sky
and other state securities laws, and accounting and legal fees and expenses of
counsel to the Corporation; provided, however, that the Stockholder shall pay
up to the first $50,000 of any Registration Expenses in connection with a
demand registration pursuant to Sections 1(d) and (e).
(j) The Stockholder agrees that, in the event the Corporation files a
registration statement under the Securities Act with respect to an underwritten
public offering of any securities of the Corporation for cash, primarily for
the account of the Corporation, in which the Stockholder was permitted to
participate (whether or not the Stockholder does in fact participate), if
required by an underwriter, the Stockholder will not effect any public sale or
distribution, including any sale pursuant to Rule 144 promulgated under the
Securities Act, of any equity securities of the Corporation or any securities
convertible into or exchangeable or exercisable for any equity security of the
Corporation (other than as part of such underwritten public offering) during
the seven days prior to, and such period after (not to exceed in any event 180
days), the effectiveness of such registration statement as may be required by
such underwriter.
(k) In the event of any registration pursuant to this Section 1
covering shares of Common Stock beneficially owned by the Stockholder, the
Corporation will indemnify and hold harmless the Stockholder, and each person
or entity, if any, who controls the Stockholder within the meaning of the
Securities Act (collectively, the "Indemnitees") against any losses, claims,
damages, costs, expenses (including reasonable attorneys' fees), or liabilities
(or actions in respect thereof) to which the Stockholder or controlling person
or entity becomes subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages, costs, expenses or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the related registration
statement, any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances in which they were made; provided, however, that the
Corporation will not be liable in any such case to an Indemnitee to the extent
that any such loss,
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<PAGE> 6
claim, damage, cost, expense or liability arises out of or is primarily based
upon (x) an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished by any Indemnitee, specifically for use in the
preparation thereof or (y) such Indemnitee's failure to deliver a copy of the
prospectus or any amendments or supplements thereto (if required by applicable
law) to the person asserting any loss, claim, damage or liability after the
Corporation has furnished such Indemnitee with the same. The Corporation also
agrees to reimburse each Indemnitee for any legal or other expenses reasonably
incurred by such Indemnitee in connection with investigating or defending any
such loss, claim, damage, liability or action.
(l) In the event of any registration pursuant to this Section 1
covering shares of Common Stock beneficially owned by the Stockholder, the
Stockholder shall indemnify and hold harmless the Corporation, each of its
directors and officers who has signed any registration statement, and each
person or entity, if any, who controls the Corporation within the meaning of
the Securities Act, against any losses, claims, damages, costs, expenses
(including reasonable attorneys' fees) or liabilities (or actions in respect
thereof) to which the Corporation or any such director, officer, or controlling
person becomes subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages, costs, expenses or liabilities (or actions in respect
thereof) primarily arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the related registration statement,
and any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or primarily arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made, in each case to the
extent, but only to the extent, that such loss, claim, damage, cost, expense or
liability primarily arises out of or is based upon (x) an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, preliminary prospectus, prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished by the Stockholder specifically for use in the preparation thereof or
(y) the Stockholder's failure to deliver a copy of the prospectus or any
amendments or supplements thereto (if required by applicable law) to the person
asserting any loss, claim, damage or liability after the Corporation has
furnished the Stockholder with the same. The Stockholder shall reimburse any
legal or other expenses reasonably incurred by the Corporation or any such
director, officer, or controlling person or entity in connection with
investigating or defending any such loss, claim, damage, liability or action.
The liability of the Stockholder pursuant to this Section 1(l) shall be limited
to the total proceeds from the offering (net of sales commissions) received by
the Stockholder.
(m) Promptly after receipt by an indemnified party under this Section
1 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 1, notify the indemnifying party of the commencement thereof;
provided, however, that failure to so notify the indemnifying party shall not
affect an indemnifying party's obligations hereunder, except to the extent that
the
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indemnifying party is materially prejudiced by such failure. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's choice
at the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as set
forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action,
the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. It is understood, however, that the indemnifying party shall, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time.
(n) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(o) With respect to any underwritten offering, the Stockholder (if
shares of Common Stock of the Stockholder are included in the subject
registration statement) and the Corporation shall, in addition to the
foregoing, provide the underwriter of such offering with customary
representations and warranties, and indemnification and contribution, in each
instance as shall be reasonably requested by the underwriter, provided,
however, that any such agreement to indemnify an underwriter with respect to
any preliminary prospectus shall not inure to the benefit of any such
underwriter to the extent that any loss, claim, damage, cost, expense or
liability of any such underwriter results solely from an untrue statement of
material fact contained in, or the omission of a material fact from, such
preliminary prospectus which untrue statement or omission was corrected in the
final prospectus, if such underwriter failed to send or give a copy of the
final prospectus to the person asserting such loss, claim, damage, cost,
expense or liability at or prior to the written confirmation of the sale of
such securities to such person, and provided
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<PAGE> 8
further that any such agreement by the Stockholder to indemnify an underwriter
shall be on a several (and not joint) basis in proportion to the number of
securities sold by the Stockholder in such underwritten offering and shall be
limited in amount to the net proceeds received by the Stockholder in such
underwritten offering.
(p) If the indemnification provided for in this Section 1 is
unavailable to any indemnified party with respect to any losses, claims,
damages, liabilities or expenses referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party, will contribute to the
amount paid or payable by such indemnified party, as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnified party
on the one hand, and the indemnifying party on the other hand, from the
offering 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 the indemnified party on the one hand, and of the
indemnifying party on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses as well as any other relevant equitable considerations. The relative
benefits received by the indemnified party on the one hand, and the
indemnifying party on the other hand, shall be deemed to be in the same
proportion as the total proceeds from the offering (net of sales commissions)
received by the indemnified party relative to such proceeds received by the
indemnifying party. The relative fault of the indemnified party on the one
hand, and the indemnifying party on the other hand, will be determined with
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the indemnified party or the indemnifying party, and
its relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount payable by a party as
a result of the losses, claims, damages, liabilities or expenses referred to
above will be deemed to include, subject to the limitations set forth in
Section 1(q) below, any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim.
(q) The indemnified party and the indemnifying party agree that it
would not be just and equitable if contribution pursuant to this Section 1 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in Section
1(p). No person committing fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution or
indemnification from any person not committing such fraudulent
misrepresentation.
2. Legend and Compliance with Securities Laws. (a) The stock
certificates evidencing the shares of Common Stock of the Stockholder subject
to this Agreement shall bear a legend reading substantially as follows:
"The Shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
but have been issued pursuant
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to an exemption from such registration. Neither such Shares nor any
interest therein may be sold, transferred, pledged, hypothecated or
otherwise disposed of until either (i) the holder thereof shall have
received an opinion from counsel reasonably satisfactory to the
Company that registration thereof under the Act is not required or
(ii) a registration statement under the Act covering such Shares or
such interest and the disposition thereof shall have become effective
under the Act."
(b) In the event that a registration statement covering the shares of
Common Stock of the Corporation owned by the Stockholder which are subject to
this Agreement shall become effective under the Securities Act and under any
applicable state securities laws or in the event that the Corporation shall
receive an opinion of counsel to the holder of such shares of Common Stock in
form and substance reasonably satisfactory to the Corporation that, in the
opinion of such counsel, the above stated legend is not, or is no longer,
necessary or required under applicable law (including, without limitation,
because of the availability of the exemption afforded by Rule 144(k)
promulgated under the Securities Act), the Corporation shall, or shall instruct
its transfer agents and registrars to, remove the above stated legend from the
stock certificates evidencing such shares of Common Stock or issue new
certificates without such legend in lieu thereof.
(c) The Stockholder consents to the Corporation making a notation on
its records and giving instructions to any transfer agent for the Common Stock
in order to implement the restrictions on transfer established in this Section
2.
3. Reorganization, Etc. The provisions of this Agreement shall apply
mutatis mutandi to any shares of capital stock resulting from any stock split
or reverse split, stock dividend, reclassification of the capital stock of the
Corporation, consolidation, merger or reorganization of the Corporation, and
any shares or other securities of the Corporation or of any successor company
which may be received by the Stockholder (and/or its successors, permitted
assigns, legal representatives and heirs) by virtue of its ownership of Common
Stock or other capital stock of the Corporation.
4. Notices. Any notice or other communication under this Agreement
shall be in writing and sufficient if delivered personally, by telecopy or sent
by registered or certified mail, postage prepaid, addressed as follows:
If to the Corporation:
Capita Research Group, Inc.
591 Shippack Pike, Suite 300
Blue Bell, Pennsylvania 19422
Attention: President
Telecopy: (215) 619-0775
Telephone: (215) 619-7777
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If to the Stockholder:
Mr. Jim Salim
3510 Turtle Creek Boulevard, #2D
Dallas, Texas 75219
Telecopy: (214) 526-0435
Telephone: (214) 526-0205
All such notices and communications shall be deemed to have been duly given at
the time delivered by hand, if personally delivered, upon receipt, if sent by
telecopy, or three (3) business days after being deposited in the mail, if sent
by registered or certified mail. Any party may, upon written notice to the
other parties hereto, change the address to which notices or other
communications to such party are to be delivered or mailed.
5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
6. Entire Agreement. This Agreement contains the entire agreement
among the parties hereto with respect to the subject matter hereof. This
Agreement may be amended or modified or any provision hereof may be waived by a
written agreement between the Stockholder and the Corporation. This Agreement
supersedes all prior understandings, negotiations and agreements relating to
the subject matter hereof.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada applicable to agreements made
and to be performed entirely within such State, without regard to any conflict
of laws principles of such State which would apply the laws of any other
jurisdiction.
8. Jurisdiction; Waiver of Trial by Jury. THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY PENNSYLVANIA STATE OR UNITED
STATES FEDERAL COURT SITTING IN THE CITY OF PHILADELPHIA OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH PENNSYLVANIA STATE OR FEDERAL COURT. THE PARTIES AGREE THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. THE PARTIES FURTHER WAIVE TRIAL BY JURY, ANY OBJECTION
TO VENUE IN SUCH STATE AND ANY OBJECTION TO ANY ACTION OR PROCEEDING IN SUCH
STATE ON THE BASIS OF FORUM NON CONVENIENS. THE PARTIES FURTHER AGREE THAT ANY
ACTION OR
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PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN
A PENNSYLVANIA STATE OR UNITED STATES FEDERAL COURT SITTING IN THE CITY OF
PHILADELPHIA.
9. Headings. The headings in this Agreement are solely for convenience
of reference and shall not affect the interpretation of any of the provisions
hereof.
10. Severability. If any provision herein contained shall be held to
be illegal or unenforceable, such holding shall not affect the validity or
enforceability of the other provisions of this Agreement.
11. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Corporation, the Stockholder, each of their respective
successors, permitted assigns, executors, administrators, legal representatives
and heirs, as applicable.
12. Construction. The parties hereto agree that this Agreement is the
product of negotiations between sophisticated parties and individuals, all of
whom were represented by counsel, and each of whom had an opportunity to
participate in, and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather shall be given a
fair and reasonable construction without regard to the rule of contra
proferentum.
* * *
IN WITNESS WHEREOF, each of the parties hereto has executed this
Registration Rights Agreement on the date first above written.
CAPITA RESEARCH GROUP, INC.
By:
----------------------------------------
Name:
Title:
----------------------------------------
Jim Salim
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