<PAGE>
As filed with the Securities and Exchange Commission on January 25, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VITAFORT INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 68-0110509
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
1800 AVENUE OF THE STARS, SUITE 480
LOS ANGELES, CALIFORNIA 90067
(Address of principal executive offices) (Zip Code)
VITAFORT INTERNATIONAL CORPORATION 1995 STOCK OPTION PLAN
AMENDMENT TO EMPLOYMENT AGREEMENT BETWEEN VITAFORT INTERNATIONAL
CORPORATION (THE "REGISTRANT") AND MARK BEYCHOK
AGREEMENT BETWEEN THE REGISTRANT AND JOSEPH D. KOWAL
CONSULTING AGREEMENT BETWEEN THE REGISTRANT AND JOFF POLLON
OPTION AGREEMENT BETWEEN THE REGISTRANT AND JOFF POLLON
CONSULTING AGREEMENT BETWEEN THE REGISTRANT AND JOHN O'NEIL
OPTION AGREEMENT BETWEEN THE REGISTRANT AND JOHN O'NEIL
CONSULTING AGREEMENT BETWEEN THE REGISTRANT AND NICHOLAS KONSTANT
OPTION AGREEMENT BETWEEN THE REGISTRANT AND NICHOLAS KONSTANT
AGREEMENT BETWEEN THE REGISTRANT AND FRANK J. HARITON
OPTION AGREEMENTS BETWEEN THE REGISTRANT AND FRANK J. HARITON
AGREEMENT BETWEEN THE REGISTRANT AND LARRY BRUCIA
OPTION AGREEMENT BETWEEN THE REGISTRANT AND LARRY BRUCIA
LETTER AGREEMENT BETWEEN THE REGISTRANT AND MARK BEYCHOK
LETTER AGREEMENT BETWEEN THE REGISTRANT AND ELOY ELLIS
LETTER AGREEMENT BETWEEN THE REGISTRANT AND JOHN COPPOLINO
CONSULTING AGREEMENT BETWEEN THE REGISTRANT AND CHRIS FURIE
OPTION AGREEMENT BETWEEN THE REGISTRANT AND CHRIS FURIE
(Full title of the plans)
MR. MARK BEYCHOK, PRESIDENT
VITAFORT INTERNATIONAL CORPORATION
1800 AVENUE OF THE STARS, SUITE 1114
LOS ANGELES, CALIFORNIA 90067
(Name and address of agent for service)
(310) 552-6393
Telephone number, including area code, of agent for service
Copy to:
FRANK J. HARITON, ESQ.
485 MADISON AVENUE-9TH FLOOR
NEW YORK, NEW YORK 10022
(212) 752-7200
<PAGE>
CALCULATION OF REGISTRATION FEE
Title of Amount to be Proposed Proposed Amount of
Securities to Registered Maximum Maximum Registration
be registered Price Aggregate Fee**
Per Share* Offering Price*
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Common Stock,
par value
$.0001 per 47,292,058 $0.172213 $8,144,310 $2,808.38
share shares
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* Based upon the weighted average of (i) exercise prices of the options
granted under the Plan and other options included herein and (ii) the average of
the bid and asked prices of the Registrant's Common Stock as reflected on the
Electronic Bulletin Board on January 16, 1996 in the case of stock grants in the
case of per share data and based upon the aggregate of the foregoing exercise
prices and stock prices in the case of aggregate data.
** Calculated pursuant to Rule 457(h).
<PAGE>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
are incorporated herein by reference:
(a) Vitafort International Corporation's (the "Company") Annual Report on Form
10-KSB for the year ended December 31, 1994, filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 1995, filed pursuant to Section 13(a) or 15(d) of the Exchange Act.
(c) The Company's Current Report on Form 8-K, dated July 28, 1995, filed
pursuant to Section 13(a) or 15(d) of the Exchange Act.
(d) The Company's Quarterly Report on Form 10-QSB for the quarter ended June
30, 1995, filed pursuant to Section 13(a) or 15(d) of the Exchange Act.
(e) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1995, filed pursuant to Section 13(a) or 15(d) of the Exchange
Act.
(f) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year covered by the document referred to in (a)
above.
(g) The Prospectus of the Company filed by the Company on December 19, 1989
which contains a description of the Company's Common Stock.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective
amendment indicating that all securities offered hereby have been sold or
deregistering all such securities then unsold, shall be deemed to be
incorporated by reference into this registration statement and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Frank J. Hariton, Esq. owns: (i) 159,533 shares of the Company's common
stock; (ii) 800 of the Company's redeemable warrants; (iii) 66,667 common stock
purchase options exercisable at $.225 and; (iv) 66,667 common stock purchase
options exercisable at $.30.
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<PAGE>
Item 6. Indemnification of Directors and Officers.
Article Seventh of the Company's Certificate of Incorporation provides for
indemnification of the Company's officers and directors to the fullest extent
permitted under the General Corporation Law of the State of Delaware ("DGCL").
SECTION 145 of the DGCL, as amended, applies to the Company and the
relevant portion of the DGCL provides as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in
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its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of
a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors
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<PAGE>
so directs, by independent legal counsel in a written opinion, or
(3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer
or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid
upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him
against such liability under this section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority
to indemnify its directors,
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<PAGE>
officer and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in
the same position under this section with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(i) For purpose of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee,
or agent with respect to an employee benefit plan, its participants,
or beneficiaries; and a person who acted in good faith and in a manner
he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
The Company maintains insurance for the benefit of its directors and
officers and the directors and officers of its subsidiaries, insuring such
persons against certain liabilities, including liabilities arising under the
securities laws.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Securities and Exchange Commission, such
indemnification is
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against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable. Furthermore, the Company has given certain
undertakings with respect to indemnification in connection with this
Registration Statement.
Item 7. Exemption from Registration Claimed.
No "restricted securities," as defined in the instructions to Form S-8, are
being offered hereby.
Item 8. Exhibits.
4.l - Certificate of Incorporation of Registrant*
4.2 - By-laws of Registrant*
4.3 - Agreement and Plan of Merger between the Registrant and
Vitafort International Corporation, a California
corporation*
4.4 - Certificate of Designation - Series A Preferred Stock**
4.5 - Certificate of Designation - Series B Preferred Stock**
4.6 - Certificate of Amendment to the Certificate of
Incorporation, November 1991**
4.7 - Certificate of Designation - Series C Preferred Stock**
4.8 - Certificate of Amendment to the Certificate of
Incorporation, filed February 8, 1994***
4.9 - Certificate of Designation - Series D Preferred Stock***
4.10 - Certificate of Amendment to the Certificate of
Incorporation, filed November 1995
4.11 - Specimen Stock Certificate*
4.12 - Specimen Redeemable Common Stock Purchase Warrant*
4.13 - Form of Warrant Agreement*
4.14 - Warrant Extension Agreement, December 18, 1992**
4.15 - Warrant Extension Agreement, December 18, 1994***
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<PAGE>
4.16 - Warrant Extension Agreement, January 18, 1995***
4.17 - Warrant Extension Agreement, April 3, 1995***
4.18 - Warrant Extension Agreement, May 3, 1995
4.19 - Warrant Extension Agreement, June 15, 1995
4.20 - Warrant Extension Agreement, July 17, 1995
4.21 - Warrant Extension Agreement, August 16, 1995
4.22 - Warrant Extension Agreement, December 31, 1995
5.01 - Opinion of Frank J. Hariton, Esq..
23.01 - Consent of Frank J. Hariton, Esq. (included in
Exhibit 5.01).
23.02 - Consent of KMPG Peat Marwick LLP, Independent Certified
Public Accountants.
24.01 - Power of Attorney (contained on signature page)
99.01 - The Vitafort International Corporation 1995 Stock Option
Plan
99.02 - Form of Option granted to Directors under The Vitafort
International Corporation 1995 Stock Option Plan and
schedule of grants
99.03 - Employee option granted to Mark Beychok under The Vitafort
International Corporation 1995 Stock Option Plan
99.04 - Vitafort International Corporation 1995 Stock Option Plan
Summary
99.05 - Public Relations Agreement between the Registrant and Joseph
D. Kowal. (Incorporated by Reference to Exhibit 99.06 to
Registration Statement of Form S-8 filed by the Registrant
on September 22, 1995.)
99.06 - Consulting Agreement, dated as of January 6, 1996, between
the Registrant and Joff Pollon.
99.07 - Option Agreement, dated as of January 6, 1996 between the
Registrant and Joff Pollon.
99.08 - Consulting Agreement, dated November
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<PAGE>
8, 1995 between the Registrant and John O'Neil.
99.09 - Option Agreement, dated December 18, 1995, between the
Registrant and John O'Neil.
99.10 - Amendment, dated December 16, 1995, to the Employment
Agreement between the Registrant and Mark Beychok.
99.11 - Option Agreement, dated December 16, 1995, between the
Registrant and Mark Beychok.
99.12 - Strategic Services Consulting Agreement, dated January 6,
1996, between the Registrant and Nicholas Konstant.
99.13 - Option Agreement, dated as of January 6, 1996, between the
Registrant and Nicholas Konstant.
99.14 - Conversion Agreement, dated December 22, 1995, between the
Registrant and Frank J. Hariton.
99.15 - Class A Option Agreement, as of dated December 22, 1995,
between the Registrant and Frank J. Hariton.
99.16 - Class B Option Agreement, dated as of December 22, 1995,
between the Registrant and Frank J. Hariton.
99.17 - Conversion Agreement, dated as of December 22, 1995, between
the Registrant and Larry Brucia.
99.18 - Class A Option Agreement, dated as of December 30, 1995,
between the Registrant and Larry Brucia.
99.19 - Class B Option Agreement, dated as of December 30, 1995
between the Registrant and Larry Brucia.
99.20 - Conversion Agreement, dated as of December 22, 1995, between
the Registrant and Mark Beychok.
99.21 - Class A Option Agreement, dated as of December 30, 1995,
between the Registrant and Mark Beychok.
99.22 - Class B Option Agreement, dated as of December 30, 1995
between the Registrant and Mark Beychok.
99.23 - Conversion Agreement, dated as of December 22,
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<PAGE>
1995, between the Registrant and Eloy Ellis.
99.24 - Class A Option Agreement, dated as of December 30, 1995,
between the Registrant and Eloy Ellis.
99.25 - Class B Option Agreement, dated as of December 30, 1995
between the Registrant and Eloy Ellis.
99.26 - Conversion Agreement, dated as of December 22, 1995, between
the Registrant and John Coppolino.
99.27 - Class A Option Agreement, dated as of December 30, 1995,
between the Registrant and John Coppolino.
99.28 - Class B Option Agreement, dated December 30, 1995 between
the Registrant and John Coppolino.
99.29 - Consulting Agreement, dated November 2, 1995, between the
Registrant and Chris Furie.
99.30 - Amendment, dated January 6, 1996, to Consulting Agreement
between the Registrant and Chris Furie.
99.31 - Option Agreement, dated November , 1995, between the
Registrant and Chris Furie.
* Incorporated by reference to the exhibits to the Registrant's Registration
Statement on Form S-18, File Number 33-31883.
** Incorporated by reference to the exhibits to the Registrant's Form 10-KSB
for the year ended December 31, 1993.
*** Incorporated by reference to the exhibits to the Registrant's Form 10-KSB
for the year ended December 31, 1994.
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<PAGE>
Item 9. Undertakings.
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post- effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the Company of expenses paid or incurred
by a director, officer or controlling person of the Company in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles and State of California, on the 24th day
of January, 1996.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
-------------------------
Mark Beychok, President
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<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark Beychok and Sheldon Schrager, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them or their substitutes may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Director, Chief Operating
Officer and President
(Principal Executive, Accounting
and Financial Officer)
/s/ Mark Beychok January 17, 1996
- -------------------------
Mark Beychok
Chairman of the Board and
a Director
/s/Sheldon Schrager January 17, 1996
- -------------------------
Sheldon Schrager
Director January , 1996
- -------------------------
Stanley J. Pasarell
/s/ Donald Wohl
- -------------------------
Donald Wohl Director January 17, 1996
- -------------------------
Kenneth Berg Director January , 1996
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
4.l - Certificate of Incorporation of Registrant*
4.2 - By-laws of Registrant*
4.3 - Agreement and Plan of Merger between the Registrant and Vitafort
International Corporation, a California corporation*
4.4 - Certificate of Designation - Series A Preferred Stock**
4.5 - Certificate of Designation - Series B Preferred Stock**
4.6 - Certificate of Amendment to the Certificate of Incorporation,
November 1991**
4.7 - Certificate of Designation - Series C Preferred Stock**
4.8 - Certificate of Amendment to the Certificate of Incorporation, filed
February 8, 1994***
4.9 - Certificate of Designation - Series D Preferred Stock***
4.10 - Certificate of Amendment to the Certificate of Incorporation, filed
November 1995
4.11 - Specimen Stock Certificate*
4.12 - Specimen Redeemable Common Stock Purchase Warrant*
4.13 - Form of Warrant Agreement*
4.14 - Warrant Extension Agreement, December 18, 1992**
4.15 - Warrant Extension Agreement, December 18, 1994***
4.16 - Warrant Extension Agreement, January 18, 1995***
4.17 - Warrant Extension Agreement, April 3, 1995***
4.18 - Warrant Extension Agreement, May 3, 1995
4.19 - Warrant Extension Agreement, June 15, 1995
4.20 - Warrant Extension Agreement, July 17, 1995
4.21 - Warrant Extension Agreement, August 16, 1995
4.22 - Warrant Extension Agreement, December 31, 1995
5.01 - Opinion of Frank J. Hariton, Esq..
23.01 - Consent of Frank J. Hariton, Esq. (included in
<PAGE>
Exhibit 5.01).
23.02 - Consent of KMPG Peat Marwick LLP, Independent Certified Public
Accountants.
24.01 - Power of Attorney (contained on signature page)
99.01 - The Vitafort International Corporation 1995 Stock Option Plan
99.02 - Form of Option granted to Directors under The Vitafort International
Corporation 1995 Stock Option Plan and schedule of grants
99.03 - Employee option granted to Mark Beychok under The Vitafort
International Corporation 1995 Stock Option Plan
99.04 - Vitafort International Corporation 1995 Stock Option Plan Summary
99.05 - Public Relations Agreement between the Registrant and Joseph D. Kowal.
(Incorporated by Reference to Exhibit 99.06 to Registration Statement
of Form S-8 filed by the Registrant on September 22, 1995.)
99.06 - Consulting Agreement, dated as of January 6, 1996, between the
Registrant and Joff Pollon.
99.07 - Option Agreement, dated as of January 6, 1996 between the Registrant
and Joff Pollon.
99.08 - Consulting Agreement, dated November 8, 1995 between the Registrant
and John O'Neil.
99.09 - Option Agreement, dated December 18, 1995, between the Registrant and
John O'Neil.
99.10 - Amendment, dated December 16, 1995, to the Employment Agreement
between the Registrant and Mark Beychok.
99.11 - Option Agreement, dated December 16, 1995, between the Registrant and
Mark Beychok.
99.12 - Strategic Services Consulting Agreement, dated January 6, 1996,
between the Registrant and Nicholas Konstant.
99.13 - Option Agreement, dated as of January 6, 1996, between the Registrant
and Nicholas Konstant.
99.14 - Conversion Agreement, dated December 22, 1995, between the Registrant
and Frank J. Hariton.
99.15 - Class A Option Agreement, as of dated December 22, 1995, between the
Registrant and Frank J. Hariton.
<PAGE>
99.16 - Class B Option Agreement, dated as of December 22, 1995, between the
Registrant and Frank J. Hariton.
99.17 - Conversion Agreement, dated as of December 22, 1995, between the
Registrant and Larry Brucia.
99.18 - Class A Option Agreement, dated as of December 30, 1995, between the
Registrant and Larry Brucia.
99.19 - Class B Option Agreement, dated as of December 30, 1995 between the
Registrant and Larry Brucia.
99.20 - Conversion Agreement, dated as of December 22, 1995, between the
Registrant and Mark Beychok.
99.21 - Class A Option Agreement, dated as of December 30, 1995, between the
Registrant and Mark Beychok.
99.22 - Class B Option Agreement, dated as of December 30, 1995 between the
Registrant and Mark Beychok.
99.23 - Conversion Agreement, dated as of December 22, 1995, between the
Registrant and Eloy Ellis.
99.24 - Class A Option Agreement, dated as of December 30, 1995, between the
Registrant and Eloy Ellis.
99.25 - Class B Option Agreement, dated as of December 30, 1995 between the
Registrant and Eloy Ellis.
99.26 - Conversion Agreement, dated as of December 22, 1995, between the
Registrant and John Coppolino.
99.27 - Class A Option Agreement, dated as of December 30, 1995, between the
Registrant and John Coppolino.
99.28 - Class B Option Agreement, dated December 30, 1995 between the
Registrant and John Coppolino.
99.29 - Consulting Agreement, dated November 2, 1995, between the Registrant
and Chris Furie.
99.30 - Amendment, dated January 6, 1996, to Consulting Agreement between the
Registrant and Chris Furie.
99.31 - Option Agreement, dated November , 1995, between the Registrant and
Chris Furie.
* Incorporated by reference to the exhibits to the Registrant's Registration
Statement on Form S-18, File Number 33-31883.
** Incorporated by reference to the exhibits to the Registrant's Form 10-KSB
for the year ended December 31, 1993.
*** Incorporated by reference to the exhibits to the Registrant's Form 10-KSB
for the year ended December 31, 1994.
<PAGE>
R E O F F E R P R O S P E C T U S
26,763,684 SHARES
VITAFORT INTERNATIONAL CORPORATION
COMMON STOCK
----------------
The shares offered hereby will be sold by the Selling Shareholders. See
"Selling Shareholders." The Company will not receive any of the proceeds from
the sale of the shares offered hereby. However, if all of the shares offered
hereby are sold, the Company will have received proceeds upon the exercise of
stock options of $4,000,243.
The shares of Common Stock of the Company are traded in the Electronic
Bulletin Board under the symbol "VFRT." On January 16, 1996, the closing bid
and asked prices of the Common Stock were approximately $.49 and $.50 per share.
----------------
THESE SHARES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Selling Shareholders have advised the Company that they propose to
offer for sale and sell the shares registered hereby from time to time in
broker's transactions, in negotiated transactions or through a combination
thereof at prices related to market prices of the Common Stock prevailing at the
time of sale. Such shares are being offered on a continuous basis; the precise
amounts and timing of sales, if any, of the shares offered hereby will be
determined by the Selling Shareholders in their sole discretion from time to
time.
----------------
THE DATE OF THIS PROSPECTUS IS JANUARY 22, 1996
<PAGE>
AVAILABLE INFORMATION
Vitafort International Corporation (together with its subsidiaries herein called
the "Company" or "Vitafort") is subject to the informational requirements of the
Securities Exchange Act of 1934 ("Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at its New York Regional Office, Room 1228, 75 Park Plaza, New
York, New York 10007; and Chicago Regional Office, Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661. Copies can be obtained by
mail at prescribed rates. Requests should be directed to the Commission's
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1994, Quarterly Reports on Form 10-QSB for the quarters ended March 31,
1995, June 30, 1995 and September 30, 1995 , Current Report on Form 8-K, dated
July 28, 1995, each as filed with the Commission, are incorporated herein by
reference. All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the date
of filing of such documents.
The Company undertakes to provide without charge to each person to whom a copy
of this Prospectus has been delivered copies of the above documents, other than
exhibits thereto, upon request of any such person to the Company, 1800 Avenue of
the Stars, Suite 480, Los Angeles, California 90067; Attention: Corporate
Secretary (telephone number 310-552-6393).
----------------
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<PAGE>
THE COMPANY
Vitafort International Corporation (the "Registrant", the "Company" or
"Vitafort") was formed as a California corporation in 1986 and reincorporated
as a Delaware corporation in 1989. Until May 1993, Vitafort was in the
businesses of formulating and developing value added foods and beverages for
third parties and marketing branded seafood. In May 1993, these businesses
were discontinued and, later in 1993, the Registrant disposed of these
businesses. In September 1993, the Registrant installed new management and
entered the business of developing and marketing branded low fat and fat free
foods using proprietary formulations and processes. During 1994, Vitafort
continued with the development of the business it had entered in 1993 and, in
June 1994, commercially introduced its principal product, a line of fat free
brownies under the brand name Fudgets-TM-. Vitafort also markets a line of
meatless cold cuts under the brand name Trim Slice/Vegicatessen-TM-, a
product line that it acquired in 1993. In late 1995 the Company began
production of low fat confectionery items and fat free cakes under the
Truffette-TM- and Cakette-TM- brand names. The Company will seek to improve
its sales and production of existing products and to develop and market
additional branded fat free products during 1996. While management is
encouraged by the performance of the Company's new products, the Company's
business did not achieve profitability during 1995.
The Company's fat free brownies and cakes and its low fat confectionery
items are based upon the Company's proprietary formulas, processes, procedures
and technologies, including proprietary technologies for bonding fat free
ingredients to improve taste and texture. The Company seeks to protect its
proprietary information through secrecy agreements with employees, suppliers and
manufacturers. If the Company is advised by counsel that any of its processes,
procedures or other techniques are patentable, then it may seek appropriate
patent protection.
The Company's products are made from generally available ingredients which
are then converted into the Company's unique products through the Company's
proprietary processes, procedures and technology.
Although management believes that the Company's products are unique and are
superior in taste to competitively available products, the food industry is
characterized by the continual development of new products employing various new
technologies and processes. Accordingly, no assurance can be given that new
products will not be developed and marketed which are superior to the Company's
products in taste, texture, feel and nutritional value or that the Company's
products will continue to maintain their market acceptance.
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<PAGE>
The Company is a Delaware corporation organized on September 28, 1989, and
its principal executive offices are located at 1800 Avenue of the Stars, Suite
1114, Los Angeles, California 90067 (telephone number 310-552-6393).
RISK FACTORS
The Shares offered hereby involve a high degree of risk, including, but not
necessarily limited to, the risk factors described below. Each prospective
investor should consider carefully the information set forth below as well as
the other information set forth in or incorporated by reference into this
Prospectus.
1. FINANCIAL CONDITION. The Company has never had profits from ongoing
operations, and from inception through September 30, 1995 had lost an aggregate
of approximately $11,000,000, and will report additional losses for calendar
1995. The report of the independent auditors included in the Company's Form 10-
KSB for the year ended December 31, 1994, incorporated by reference herein,
includes an explanatory paragraph relating to the ability of the Company to
continue as a going concern. In addition, the Company has never met its
financial projections.
2. NEW PRODUCTS AND LINES OF BUSINESS. The Company has introduced new products
during 1994 and late 1995 and for future revenues the Company will be relying on
recently acquired products and rights where there is limited history of
operations, successful commercial manufacture and distribution, or market
acceptance. Accordingly, no assurance can be given that they will enjoy a
sufficient level of market acceptance to permit profitable operations.
Accordingly, the commercial development of each of these new products has all of
the risks of a new venture and may prove not to be beneficial to the Company and
its shareholders.
3. LIMITED EXPERIENCE OF MANAGEMENT. Although Mark Beychok, president of the
Company, has substantial experience in food distribution and marketing, the
other officers of the Company have no prior experience in the operation of the
business of the commercial manufacture, marketing, and distribution of foods.
5. DEPENDANCE ON MANAGEMENT. The Company is highly dependant on the efforts of
its President and Chief Executive Officer: Mark Beychok, who has entered into a
three year employment agreement with the Company through November 30, 1996. The
Company has also obtained key man life insurance on Mr. Beychok. The loss of
Mr. Beychok's services would have a material adverse effect on the Company and
no assurance can be given that the proceeds of such
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<PAGE>
policy will be sufficient to enable the Company to hire a suitable replacement.
5. THINLY TRADED STOCK. The Company's Common Stock is on the "Electronic
Bulletin Board" and any quotations appearing thereon are not necessarily
indicative of the value of the Shares or the prices the Investors might receive
for their Shares. In addition, the Company's Common Stock has at times been
thinly and infrequently traded.
6. POTENTIAL ADVERSE IMPACT OF THE "PENNY STOCK RULES" ON THE SALE OF THE
COMPANY'S STOCK. Since the price of the Shares is below $5.00, the Shares are
covered by Rule 15(c)2-6 (the "Penny Stock Rules") that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse). For transactions covered by the Penny Stock Rules, the
broker-dealer must, among other things, make a suitability determination for the
purchaser and receive the purchaser's written agreement to the transaction prior
to the sale as well as make certain risk disclosures to customers before
effecting transactions in "penny stocks". Consequently, the "Penny Stock Rules"
may effect the liquidity of an investment in the Shares.
7. RECENT SALES OF RESTRICTED SECURITIES During 1995 and January 1996 the
Company sold approximately 39 million shares of its Common Stock at prices
ranging from $.12 to $.15 in private placement transactions. In addition, in
the last six months options to purchase approximately 82,600,000 shares have
been issued at prices varying from $.15 to $.30. The resales of these shares or
the shares underlying the options may in the future have a depressive effect on
the market for the Shares.
8. POSSIBLE NEED FOR ADDITIONAL FINANCING. The Company may require additional
capital to complete its marketing plans for its new products and no assurance is
given that such capital will be available on favorable or any other terms.
9. EFFECT OF RECENT STOCK AND OPTION ISSUANCES ON FUTURE FINANCIAL RESULTS. In
order to settle outstanding indebtedness and claims against the company and in
order to attract its new management team, the Company issued approximately
1,000,000 shares and approximately 41,000,000 stock options. Such issuances and
grants when coupled with the other recent issuances discussed herein will likely
limit the ability of the Company to utilize its net operating loss carry-forward
and may in the future have a substantial negative impact to any earnings of the
Company. Accordingly, these factors may negatively impact the price of the
Company's stock and its ability to raise additional
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<PAGE>
capital.
SELLING SECURITY-HOLDERS
The persons who, as of the date hereof, may be Selling Stockholders pursuant to
the Prospectus are set forth below.
NAME NUMBER OF NUMBER OF NUMBER OF
SHARES OWNED SHARES ELIGIBLE SHARES OWNED
FOR SALE AFTER SALES
HEREUNDER HEREUNDER AND
PERCENTAGE
OF CLASS
Mark Beychok 5,646,806(1) 15,736,684(1) 4,264,964(5.1%)(1)
Sheldon Schrager 1,723,333(2) 4,000,000(2) 390,000( .5%)(2)
Stanley J.
Pasarell 1,261,805(3) 3,000,000(3) 261,805( .3%)(3)
Donald Wohl 1,400,000(4) 3,000,000(4) 400,000( .5%)(4)
Kenneth Berg 691,666(5) 1,000,000(5) 358,333( .4)(5)
(1) Includes, as to shares presently owned and shares owned after sales
hereunder: (i) 322,350 shares owned by Mr. Beychok; (ii) 27,650 shares owned by
Mr. Beychok's IRA and pension plan; (iii) 1,250,000 shares underlying a
presently exercisable option, expiring December 16, 1998, which has an exercise
price of $.15 per share; (iv) 300,000 shares underlying a presently exercisable
option, expiring September 29, 1998, which has an exercise price of $.10 per
share; and (v) 2,000,000 shares underlying a presently exercisable option,
expiring September 15, 1998, which has an exercise price of $.25. Includes, as
to shares presently owned: (i) 1,000,000 shares underlying the presently
exercisable option for 3,000,000 shares, expiring December 16, 1998, which has
an exercise price of $.15 per share; (ii) 1,250,000 shares underlying a
presently exercisable option with an exercise price of $.15 which expires
December 16, 1998; (iii) 190,941 shares underlying a presently exercisable
option with an exercise price of $.225 which expires 15 months after the
effective date of a registration statement relating to options granted in a
private placement transaction; and (iv) 190,941 shares underlying a presently
exercisable option with an exercise price of $.30 which expires 21 months after
the effective date of a registration statement relating to options granted in a
private placement transaction. Includes, as to shares offered hereby: (i)
3,000,000 shares underlying an option, expiring December 16, 1998, of which
1,000,000 shares are currently exercisable and 1,000,000 shares become
exercisable on each of January 1, 1997
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<PAGE>
and January 1, 1998 and which has an exercise price of $.15 per share; (ii)
10,750,000 shares underlying an option, expiring December 16, 2000, which has an
exercise price of $.15 and becomes exercisable as to one third of the shares
covered thereby on each of January 1, 1997, January 1, 1998 and January 1, 1999;
(iii) 1,250,000 shares underlying a presently exercisable option with an
exercise price of $.15 which expires December 16, 1998; (iv) 190,941 shares
underlying a presently exercisable option with an exercise price of $.225 which
expires 15 months after the effective date of a registration statement relating
to options granted in a private placement transaction; (v) 190,941 shares
underlying a presently exercisable option with an exercise price of $.30 which
expires 21 months after the effective date of a registration statement relating
to options granted in a private placement transaction and (vi) 381,842 shares of
common stock.
(2) Includes, as to shares presently owned and shares owned after sales
hereunder: (i) 370,000 shares owned jointly by Mr. Schrager and his wife and
(ii) 20,000 shares owned by Mr. Schrager's individual retirement account.
Includes, as to shares presently owned, 1,333,333 shares underlying a presently
exercisable option, expiring December 16, 1998, which has an exercise price of
$.15. Includes, as to shares offered hereby 4,000,000 shares underlying an
option, expiring December 16, 1998, of which 1,333,333 are presently exercisable
and the balance become exercisable in equal installments on January 1, 1997 and
January 1, 1998, which has an exercise price of $.15.
(3) Includes, as to shares presently owned and shares owned after sales
hereunder: (i) 257,465 shares owned by Mr. Pasarrel and (ii) 3,340 of the
Company's Redeemable Public Warrants which are currently exercisable and have an
exercise price of $2.375 and an expiration date of April 30, 1996. Includes, as
to shares presently owned, 1,000,000 shares underlying a presently exercisable
option, expiring December 16, 1998, which has an exercise price of $.15.
Includes, as to shares offered hereby 4,000,000 shares underlying an option,
expiring December 16, 1998, of which 1,000,000 are presently exercisable and the
balance become exercisable in equal installments on January 1, 1997 and January
1, 1998, which has an exercise price of $.15.
(4) Includes, as to shares presently owned and shares owned after sales
hereunder, 400,000 shares underlying a presently exercisable option owned by Mr.
Wohl which has an exercise price of $.22 and expires November 20, 1996. Does
not include 4,500,000 shares owned by V.F.R.T. Partners, L.P., a California
limited partnership, of which Mr. Wohl is the general partner. Includes, as to
shares presently owned, 1,000,000 shares underlying a presently exercisable
option, expiring December 16, 1998, which has an exercise price of $.15.
Includes, as to shares offered hereby 1,000,000 shares underlying an option,
expiring December 16, 1998, of which 1,000,000 are presently
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<PAGE>
exercisable and the balance become exercisable in equal installments on January
1, 1997 and January 1, 1998, which has an exercise price of $.15.
(5) Includes, as to shares presently owned and shares owned after sales
hereunder: (i) 25,000 shares underlying a presently exercisable option owned by
Mr. Berg which has an exercise price of $.20 and expires September 18, 1997 and
(ii) 333,333 shares representing the presently exercisable portion of an option
covering 1,000,000 shares which has an exercise price of $.15 and expires
December 16, 1998. Includes, as to shares presently owned, 333,333 shares
underlying the presently exercisable portion of an option, expiring December 16,
1998, which has an exercise price of $.15. Includes, as to shares offered
hereby 1,000,000 shares underlying an option, expiring December 16, 1998, of
which 333,333 are presently exercisable and the balance become exercisable in
equal installments on January 1, 1997 and January 1, 1998, which option has an
exercise price of $.15.
All of the above selling security holders are directors of the Company. In
addition (i) Mr. Beychok has been President of the Company since September 1993
and Chief Executive Officer of the Company since February 1995; and (ii) Mr.
Schrager has been Chairman of the Board of the Company since February 1995.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they may offer and
sell the shares of Common Stock offered hereby (See "Selling Stockholders") from
time to time in broker's transactions, individually negotiated transactions or a
combination thereof at market prices prevailing from time to time. The precise
amounts and timing of sales, if any, of the shares offered hereby will be
determined by each Selling Shareholder in his sole discretion from time to time.
The Company has agreed to bear the costs of registering the shares of
Common Stock offered hereby under the Securities Act of 1933, as amended.
Each Selling Shareholder will deliver a Prospectus in connection with the
sale of shares of Common Stock offered hereby. Each Selling Shareholder will
comply with the volume limitations of Rule 144(e) promulgated under the
Securities Act of 1933, as amended. The Selling Shareholder may not sell any
shares of the Company's Common Stock at prices over $.15 per share prior to
June 16, 1996.
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<PAGE>
LEGAL OPINION
The validity of the Common Stock offered hereby is being passed upon for
the Company by Frank J. Hariton, Esq. Frank J. Hariton, Esq. owns: (i) 159,533
shares of Common Stock; (ii) 800 of the Company's Redeemable Common Stock
Purchase Warrants; (iii) 66,667 options with an exercise price of $.225; and
(iv) 66,667 options with an exercise price of $.30.
EXPERTS
The financial statements and schedules of Vitafort International Corporation as
of December 31, 1994 and 1993 and for each of the years in the three-year period
ended December 31, 1994, incorporated herein by reference and elsewhere in the
registration statement, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accounts, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the December 31, 1994 financial
statements contains an explanatory paragraph that states that the Company's
recurring losses from operations and net capital deficiency raise substantial
doubt about the entity's ability to continue as a going concern. The
consolidated financial statements do not include any adjustments relating to the
recoverability and classification of reported asset amounts or the amounts and
classification of liabilities that might result from the outcome of that
uncertainty.
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<PAGE>
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- --------------------------------------------------------------------------------
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering described herein and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any Underwriter. This Prospectus does not constitute an offer
of any securities other than those specifically offered hereby or of any of the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof.
------------------
TABLE OF CONTENTS
PAGE
----
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference. . . . . . . . . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Selling Security-Holders . . . . . . . . . . . . . . . . . . . . . . . 6
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
VITAFORT INTERNATIONAL
CORPORATION
26,763,684
SHARES OF
COMMON STOCK
---------------
REOFFER PROSPECTUS
January 22, 1996
---------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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<PAGE>
EXHIBIT 4.10
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
VITAFORT INTERNATIONAL CORPORATION
Pursuant to Section 242
of the General Corporation Law
of the State of Delaware
VITAFORT INTERNATIONAL CORPORATION, a Delaware
corporation (the "Corporation"), hereby certifies as follows:
FIRST: The amendment to the Certificate of
Incorporation to be effected hereby is as follows:
Paragraph 4 of the Certificate of Incorporation, relating to the
authorized capital stock of the Corporation, is hereby amended to read as
follows:
4. The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 180,500,000, of which
500,000 shall be Preferred Stock, par value $.O1 per share and
180,000,000 shall be Common Stock, par value $.0001 per share ("Common
Stock"), and the voting power, designations, preferences and relative
participating option or other special qualifications, limitations or
restrictions thereof are set forth hereinafter:
5. PREFERRED STOCK
(a) The Preferred Stock may be issued in one or more series,
each of which shall be distinctively designated, shall rank
equally and shall be identical in all respects except as
otherwise provided in subsection 1(b) of this Section 4.
(b) Authority is hereby vested in the Board of Directors to
issue from time to time the Preferred Stock of any series and to
state in the resolution or resolutions providing for the issuance
of shares of any series the voting powers, if any, designations,
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or
restrictions of such series to the full extent now or hereafter
permitted by the law of the State of Delaware in respect of the
matters set forth in the following clauses (i) to (viii)
inclusive;
(i) the number of shares to constitute such series, and the
distinctive designations thereof;
(ii) the voting powers, full or limited, if any, of such series;
(iii) the rate of dividends payable on shares of such series,
the conditions on which
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<PAGE>
and the times when such dividends are payable, the preference to,
or the relation to, the payment of the dividends payable on any
other class, classes or series of stock, whether cumulative or
non-cumulative and, if cumulative, the date from which dividends
on shares of such series shall be cumulative;
(iv) the redemption price or prices, if any, and the terms and
conditions on which shares of such series shall be redeemable;
(v) the requirement of any sinking fund or funds to be applied
to the purchase or redemption of shares of such series and, if
so, the amount of such fund or funds and the manner of
application;
(vi) the rights of shares of such series upon the liquidation,
dissolution or winding up of, or upon any distribution of the
assets of, the Corporation;
(vii) the rights, if any, of the holders of shares of such
series to convert such shares into, or to exchange such shares
for, shares of any other class, classes or series of stock and
the price or prices or the rates of exchange and the adjustments
at which such shares shall be convertible or exchangeable, and
any other terms and conditions of such conversion or exchange;
(viii) any other preferences and relative, participating,
optional or other special rights of shares of such series, and
qualifications, limitations or restrictions including, without
limitation, any restriction on an increase in the number of
shares of any series theretofore authorized and any
qualifications, limitations or restrictions of rights or powers
to which shares of any future series shall be subject.
(c) The number of authorized shares of Preferred Stock may be
increased or decreased by the affirmative vote of the holders of
a majority of the votes of all classes of voting securities of
the Corporation without a class vote of the Preferred Stock, or
any series thereof, except as otherwise provided in the
resolution or resolutions fixing the voting rights of any series
of the Preferred Stock.
2. COMMON STOCK
(a) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of Paragraph 1 of this Section 4), if any, shall have
been met and after the corporation shall have complied with all
the requirements, if any, with respect to the setting aside of
same as sinking funds or redemption or purchase accounts (fixed
in accordance with the provisions of Paragraph 1 of this Section
4), and subject further to any other conditions which may be
fixed in accordance with the provisions of Paragraph 1 of this
Section 4, then and not otherwise the holders of Common Stock
shall be entitled to receive such dividends as may be declared
from time to time by the Board of Directors.
(b) After distribution in full of the preferential amount (fixed
in accordance with the Provisions of Paragraph 1 of this Section
4), if any, to be distributed to the holders of Preferred Stock
in the event of the voluntary or involuntary liquidation,
distribution or sale of assets, dissolution or winding-up of the
Corporation, the holders of Common Stock shall, subject to the
rights, if any, of the holders of Preferred Stock to participate
therein (fixed in accordance with the provisions of
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<PAGE>
Paragraph 1 of this Section 4) be entitled to receive all the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably
in proportion to the number of shares of Common Stock held by
them respectively.
(c) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be adopted by
the Board of Directors pursuant to Paragraph 1 of this Section 4,
each holder of Common Stock shall have one vote in respect of
each share of Common Stock held by him on all matters voted upon
by the stockholders.
3. OTHER PROVISIONS RELATED TO SHARES OF STOCK:
(a) No holder of any of the shares of any class or series of
stock or of options, warrants or other rights to purchase shares
of any class or series of stock or of other securities of the
Corporation shall have any preemptive right to purchase or
subscribe for any unissued stock of any class or series or any
additional shares of any class or series to be issued by reason
of any increase of the authorized capital stock of the
Corporation of any class or series, or bonds, certificates of
indebtedness, debentures or other securities convertible into or
exchangeable for stock of the Corporation of any class or series,
or carrying any right to purchase stock of any class or series,
but such unissued stock, additional authorized issue of shares of
any class or series of stock or securities convertible into or
exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board
of Directors to such persons, firms, corporations or
associations, whether such holders or others, and upon such terms
as may be deemed advisable by the Board of Directors in the
exercise of its sole discretion.
(b) The powers and rights of Common Stock shall be subordinated
to the powers, preferences and rights of the holders of Preferred
Stock. The relative powers, preferences and rights of each
series of Preferred Stock in relation to the powers, preferences
and rights of each other series of Preferred Stock shall, in each
case, be as fixed from time to time by the Board of Directors in
the resolution or resolutions adopted pursuant to authority
granted in Paragraph I of this Section 4 and the consent, by
Class or series, vote or otherwise, of the holders of such of the
series of are from time to time outstanding Preferred Stock as
for the issuance by the Board of shall not be required Directors
of any other series of rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any
of them; provided, however, that the Board of Directors may
provide in the resolution or resolutions as to any series of
Preferred Stock adopted pursuant to Paragraph 1 of this 4 Section
4 that the consent of the holders of a majority (or such greater
proportion as shall be therein fixed) of the outstanding shares
of such series voting thereon shall be required for the issuance
of any or all other series of Preferred Stock.
(c) subject to the provisions of subparagraph (b) of this
Paragraph 3 of this Section 4, shares of any series of Preferred
Stock may be authorized or issued from time to time as the Board
of Directors in its sole discretion shall determine and on such
terms and for such consideration as shall be fixed by the Board
of Directors in its sole discretion.
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<PAGE>
(d) Shares of Common stock may be issued from time to time as
the Board of Directors in its sole discretion shall determine and
on such terms and for such consideration as shall be fixed by the
board of Directors in its sole discretion.
(e) The authorized number of shares of Common Stock and of
Preferred Stock Preferred Stock may be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock and Preferred
Stock of the corporation entitled to vote thereon.
SECOND: The foregoing amendment to the Certificate of Incorporation of the
Corporation was duly adopted by the holders of at least a majority of the
outstanding shares entitled to vote by their giving written consent thereto in
accordance with Section 242 of the Delaware General Corporation Law
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by its President and its Assistant Secretary this 2nd
day of November, 1995.
VITAFORT INTERNATIONAL CORPORATION
/s/ Mark Beychok
---------------------------------------
President
/s/ Frank J. Hariton
---------------------------------------
Assistant Secretary
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<PAGE>
EXHIBIT 4.18
FIFTH EXTENSION AGREEMENT
FIFTH EXTENSION AGREEMENT, dated as of May 3, 1995, by and between VITAFORT
INTERNATIONAL CORPORATION, a Delaware corporation, and CONTINENTAL STOCK
TRANSFER & TRUST COMPANY.
WHEREAS, the parties hereto are the parties to a Warrant Agency Agreement
(the Warrant Agency Agreement"), dated as of December 19, 1989, as amended by an
Extension Agreement (the "Extension Agreement"), dated as of December 18, 1992,
as further amended by a Second Extension Agreement (the "Second Extension
Agreement"), dated as of December 18, 1994, as further amended by a Third
Extension Agreement, dated as of January 18, 1995 (the "Third Extension
Agreement"), and as further amended by a Fourth Extension Agreement, dated as of
April 3, 1995 (the "Fourth Extension Agreement")(the Warrant Agency Agreement,
the Extension Agreement, the Second Extension Agreement, the Third Extension
Agreement and the Fourth Extension Agreement are collectively referred to as the
"Amended Warrant Agency Agreement") and now desire to further amend the same;
NOW, THEREFORE, it is agreed as follows:
1. All defined terms shall have the meaning given them in the Amended
Warrant Agency Agreement unless otherwise defined herein.
2. Section 5 of the Warrant Agency Agreement is amended to provide that
the period during which the Warrants may be exercised shall expire at 5:00 P.M.
New York City Time on June 15, 1995. The period from May 4, 1995 to June 14,
1995 shall be
<PAGE>
referred to as the Fifth Extension Period. The Warrant Agent is authorized to
affix a stamp to certificates for the Warrants indicating the Fifth Extension
Period.
3. The Warrant Price during the Fifth Extension Period shall be $2.375,
subject to adjustment as set forth in Section 4 of the Extension Agreement.
4. This Fifth Extension Agreement may only be changed by an instrument in
writing executed by the parties hereto. This Fifth Extension Agreement shall be
governed by the laws of the State of New York as they are applied to contracts
to be performed entirely within the State of New York.
5. Except as specifically amended hereby the Amended Warrant Agency
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
------------------------------------
Mark Beychok, President and Chief
Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Steven Nelson
------------------------------------
Steven Nelson, President
- 2 -
<PAGE>
EXHIBIT 4.19
SIXTH EXTENSION AGREEMENT
FIFTH EXTENSION AGREEMENT, dated as of June 15, 1995, by and between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY.
WHEREAS, the parties hereto are the parties to a Warrant Agency Agreement
(the Warrant Agency Agreement"), dated as of December 19, 1989, as amended by an
Extension Agreement (the "Extension Agreement"), dated as of December 18, 1992,
as further amended by a Second Extension Agreement (the "Second Extension
Agreement"), dated as of December 18, 1994, as further amended by a Third
Extension Agreement, dated as of January 18, 1995 (the "Third Extension
Agreement"), as further amended by a Fourth Extension Agreement, dated as of
April 3, 1995 (the "Fourth Extension Agreement"), and as further extended by a
Fifth Extension Agreement, dated as of May 3, 1995 (the "Fifth Extension
Agreement") (the Warrant Agency Agreement, the Extension Agreement, the Second
Extension Agreement, the Third Extension Agreement, the Fourth Extension
Agreement and the Fifth Extension Agreement are collectively referred to as the
"Amended Warrant Agency Agreement") and now desire to further amend the same;
NOW, THEREFORE, it is agreed as follows:
1. All defined terms shall have the meaning given them in the Amended
Warrant Agency Agreement unless otherwise defined herein.
<PAGE>
2. Section 5 of the Warrant Agency Agreement is amended to provide that
the period during which the Warrants may be exercised shall expire at 5:00 P.M.
New York City Time on July 17, 1995. The period from June 16, 1995 to July 17,
1995 shall be referred to as the Sixth Extension Period. The Warrant Agent is
authorized to affix a stamp to certificates for the Warrants indicating the
Sixth Extension Period.
3. The Warrant Price during the Sixth Extension Period shall be $2.375,
subject to adjustment as set forth in Section 4 of the Extension Agreement.
4. This Sixth Extension Agreement may only be changed by an instrument in
writing executed by the parties hereto. This Sixth Extension Agreement shall be
governed by the laws of the State of New York as they are applied to contracts
to be performed entirely within the State of New York.
5. Except as specifically amended hereby the Amended Warrant Agency
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
--------------------------------------
Mark Beychok, President and Chief
Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Steven Nelson
----------------------------------
Steven Nelson, President
- 2 -
<PAGE>
EXHIBIT 4.20
SEVENTH EXTENSION AGREEMENT
SEVENTH EXTENSION AGREEMENT, dated as of July 17, 1995, by and between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY.
WHEREAS, the parties hereto are the parties to a Warrant Agency Agreement
(the Warrant Agency Agreement"), dated as of December 19, 1989, as amended by an
Extension Agreement (the "Extension Agreement"), dated as of December 18, 1992,
as further amended by a Second Extension Agreement (the "Second Extension
Agreement"), dated as of December 18, 1994, as further amended by a Third
Extension Agreement, dated as of January 18, 1995 (the "Third Extension
Agreement"), as further amended by a Fourth Extension Agreement, dated as of
April 3, 1995 (the "Fourth Extension Agreement"), as further extended by a Fifth
Extension Agreement, dated as of May 3, 1995 (the "Fifth Extension Agreement"),
and as further extended by a Sixth Extension Agreement, dated as of June 15,
1995 (the Warrant Agency Agreement, the Extension Agreement, the Second
Extension Agreement, the Third Extension Agreement, the Fourth Extension
Agreement, the Fifth Extension Agreement and the Sixth Extension Agreement are
collectively referred to as the "Amended Warrant Agency Agreement") and now
desire to further amend the same;
NOW, THEREFORE, it is agreed as follows:
1. All defined terms shall have the meaning given them in the Amended
Warrant Agency Agreement unless otherwise defined herein.
<PAGE>
2. Section 5 of the Warrant Agency Agreement is amended to provide that
the period during which the Warrants may be exercised shall expire at 5:00 P.M.
New York City Time on August 16, 1995. The period from July 18, 1995 to August
16, 1995 shall be referred to as the Seventh Extension Period. The Warrant
Agent is authorized to affix a stamp to certificates for the Warrants indicating
the Seventh Extension Period.
3. The Warrant Price during the Seventh Extension Period shall be $2.375,
subject to adjustment as set forth in Section 4 of the Extension Agreement.
4. This Seventh Extension Agreement may only be changed by an instrument
in writing executed by the parties hereto. This Seventh Extension Agreement
shall be governed by the laws of the State of New York as they are applied to
contracts to be performed entirely within the State of New York.
5. Except as specifically amended hereby the Amended Warrant Agency
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
-------------------------------------
Mark Beychok, President and Chief
Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Steven Nelson
---------------------------------
Steven Nelson, Chairman
- 2 -
<PAGE>
EXHIBIT 4.21
EIGHTH EXTENSION AGREEMENT
EIGHTH EXTENSION AGREEMENT, dated as of August 16, 1995, by and between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY.
WHEREAS, the parties hereto are the parties to a Warrant Agency Agreement
(the Warrant Agency Agreement"), dated as of December 19, 1989, as amended by an
Extension Agreement (the "Extension Agreement"), dated as of December 18, 1992,
as further amended by a Second Extension Agreement (the "Second Extension
Agreement"), dated as of December 18, 1994, as further amended by a Third
Extension Agreement, dated as of January 18, 1995 (the "Third Extension
Agreement"), as further amended by a Fourth Extension Agreement, dated as of
April 3, 1995 (the "Fourth Extension Agreement"), as further extended by a Fifth
Extension Agreement, dated as of May 3, 1995 (the "Fifth Extension Agreement"),
as further extended by a Sixth Extension Agreement, dated as of June 15, 1995,
and as further extended by a Seventh Extension Agreement, dated as of July 17,
1995 (the "Seventh Extension Agreement (the Warrant Agency Agreement, the
Extension Agreement, the Second Extension Agreement, the Third Extension
Agreement, the Fourth Extension Agreement, the Fifth Extension Agreement, the
Sixth Extension Agreement and the Seventh Extension Agreement are collectively
referred to as the "Amended Warrant Agency Agreement") and now desire to further
amend the same;
NOW, THEREFORE, it is agreed as follows:
1. All defined terms shall have the meaning given them in the Amended
Warrant Agency Agreement unless otherwise defined herein.
2. Section 5 of the Warrant Agency Agreement is amended to provide that
the period during which the Warrants may be exercised shall expire at 5:00 P.M.
New York City Time on
<PAGE>
December 31, 1995. The period from August 16, 1995 to December 31, 1995 shall
be referred to as the Eighth Extension Period. The Warrant Agent is authorized
to affix a stamp to certificates for the Warrants indicating the Eighth
Extension Period.
3. The Warrant Price during the Eighth Extension Period shall be $2.375,
subject to adjustment as set forth in Section 4 of the Extension Agreement.
4. This Eighth Extension Agreement may only be changed by an instrument in
writing executed by the parties hereto. This Eighth Extension Agreement shall
be governed by the laws of the State of New York as they are applied to
contracts to be performed entirely within the State of New York.
5. Except as specifically amended hereby the Amended Warrant Agency
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ MARK BEYCHOK
----------------------------------
Mark Beychok, President and Chief
Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ STEVE NELSON
----------------------------------
Steven Nelson, Chairman
- 2 -
<PAGE>
EXHIBIT 4.22
NINTH EXTENSION AGREEMENT
NINTH EXTENSION AGREEMENT, dated as of December 31, 1995, by and between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY.
WHEREAS, the parties hereto are the parties to a Warrant Agency Agreement
(the Warrant Agency Agreement"), dated as of December 19, 1989, as amended by an
Extension Agreement (the "Extension Agreement"), dated as of December 18, 1992,
as further amended by a Second Extension Agreement (the "Second Extension
Agreement"), dated as of December 18, 1994, as further amended by a Third
Extension Agreement, dated as of January 18, 1995 (the "Third Extension
Agreement"), as further amended by a Fourth Extension Agreement, dated as of
April 3, 1995 (the "Fourth Extension Agreement"), as further extended by a Fifth
Extension Agreement, dated as of May 3, 1995 (the "Fifth Extension Agreement"),
as further extended by a Sixth Extension Agreement, dated as of June 15, 1995,
as further extended by a Seventh Extension Agreement, dated as of July 17, 1995
(the "Seventh Extension Agreement), and as further extended by an Eighth
Extension Agreement, dated as of August 16, 1995 (the "Eighth Extension
Agreement") (the Warrant Agency Agreement, the Extension Agreement, the Second
Extension Agreement, the Third Extension Agreement, the Fourth Extension
Agreement, the Fifth Extension Agreement, the Sixth Extension Agreement, the
Seventh Extension Agreement and the Eighth Extension Agreement are collectively
referred to as the "Amended Warrant Agency Agreement") and now desire to further
amend the same;
NOW, THEREFORE, it is agreed as follows:
1. All defined terms shall have the meaning given them in the Amended
Warrant Agency Agreement unless otherwise defined herein.
<PAGE>
2. Section 5 of the Warrant Agency Agreement is amended to provide that
the period during which the Warrants may be exercised shall expire at 5:00 P.M.
New York City Time on April 30, 1996. The period from January 1, 1996 to April
30, 1996 shall be referred to as the Ninth Extension Period. The Warrant Agent
is authorized to affix a stamp to certificates for the Warrants indicating the
Ninth Extension Period.
3. The Warrant Price during the Ninth Extension Period shall be $2.375,
subject to adjustment as set forth in Section 4 of the Extension Agreement.
4. This Ninth Extension Agreement may only be changed by an instrument in
writing executed by the parties hereto. This Ninth Extension Agreement shall be
governed by the laws of the State of New York as they are applied to contracts
to be performed entirely within the State of New York.
5. Except as specifically amended hereby the Amended Warrant Agency
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
--------------------------
Mark Beychok, President and Chief
Executive Officer
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Steven Nelson
--------------------------
Steven Nelson, Chairman
- 2 -
<PAGE>
EXHIBIT 5.01
FRANK J HARITON ESQ. ATTORNEY AT LAW
485 MADISON AVENUE, NEW YORK, NEW YORK 10022
TEL: (212) 752-7200 FAX: (212) 752-7058
January 22, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Vitafort International Corporation
Registration Statement on Form S-8
----------------------------------
Gentlemen:
I have been requested by Vitafort International Corporation, a Delaware
corporation (the "Company"), to furnish you with my opinion as to the matters
hereinafter set forth in connection with the above-captioned registration
statement (the "Registration Statement") covering an aggregate of 47,292,058
shares (the "Shares") of the Company's common stock, offered on behalf of the
Company in connection with the Company's: (i) 1995 Stock Option Plan; (ii) an
Amendment to Employment Agreement and Option Agreement with Mark Beychok; (iii)
a Consulting Agreement and Stock Option Agreement between the Company and Joff
Pollon; (iv) a Consulting Agreement and Stock Option Agreement between the
Company and John O'Neil; (v) a Consulting Agreement and Stock Option Agreement
between the Company and Nicholas Konstant; (vi) a Consulting Agreement, an
amendment thereto and a Stock Option Agreement between the Company and Chris
Furie; (vii) Agreement and Stock Option Agreements between the Company and each
of Frank J. Hariton, Larry Brucia, Eloy Ellis, John Coppolino and Mark Beychok;
and (viii) an Agreement between the Company and Joseph D. Kowal (each a "Plan"
and collectively the "Plans").
In connection with this opinion, I have examined the Registration Statement
and the Company's Certificate of Incorporation and By-laws, the Plans, copies of
the records of corporate proceedings of the Company, and such other documents as
I have deemed necessary to enable us to render the opinion hereinafter
expressed.
Based upon and subject to the foregoing, I am of the opinion that the
Shares, when sold in accordance with the Plans, will be legally issued, fully
paid and non-assessable.
I render no opinion as to the laws of any jurisdiction other than the
internal laws of the State of New York and the internal corporate law of the
State of Delaware.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to my name under the caption "Legal
Opinions" in the Registration Statement and in the prospectus included in the
Registration Statement.
Very truly yours,
/s/ Frank J. Hariton
Frank J. Hariton
<PAGE>
EXHIBIT 23.01
FRANK J HARITON ESQ. ATTORNEY AT LAW
485 MADISON AVENUE, NEW YORK, NEW YORK 10022
TEL: (212) 752-7200 FAX: (212) 752-7058
January 22, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Vitafort International Corporation
Registration Statement on Form S-8
----------------------------------
Gentlemen:
I have been requested by Vitafort International Corporation, a Delaware
corporation (the "Company"), to furnish you with my opinion as to the matters
hereinafter set forth in connection with the above-captioned registration
statement (the "Registration Statement") covering an aggregate of 47,292,058
shares (the "Shares") of the Company's common stock, offered on behalf of the
Company in connection with the Company's: (i) 1995 Stock Option Plan; (ii) an
Amendment to Employment Agreement and Option Agreement with Mark Beychok; (iii)
a Consulting Agreement and Stock Option Agreement between the Company and Joff
Pollon; (iv) a Consulting Agreement and Stock Option Agreement between the
Company and John O'Neil; (v) a Consulting Agreement and Stock Option Agreement
between the Company and Nicholas Konstant; (vi) a Consulting Agreement, an
amendment thereto and a Stock Option Agreement between the Company and Chris
Furie; (vii) Agreement and Stock Option Agreements between the Company and each
of Frank J. Hariton, Larry Brucia, Eloy Ellis, John Coppolino and Mark Beychok;
and (viii) an Agreement between the Company and Joseph D. Kowal (each a "Plan"
and collectively the "Plans").
In connection with this opinion, I have examined the Registration Statement
and the Company's Certificate of Incorporation and By-laws, the Plans, copies of
the records of corporate proceedings of the Company, and such other documents as
I have deemed necessary to enable us to render the opinion hereinafter
expressed.
Based upon and subject to the foregoing, I am of the opinion that the
Shares, when sold in accordance with the Plans, will be legally issued, fully
paid and non-assessable.
I render no opinion as to the laws of any jurisdiction other than the
internal laws of the State of New York and the internal corporate law of the
State of Delaware.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to my name under the caption "Legal
Opinions" in the Registration Statement and in the prospectus included in the
Registration Statement.
Very truly yours,
/s/ FRANK J. HARITON
--------------------------
Frank J. Hariton
<PAGE>
Exhibit 23.02
ACCOUNTANTS' CONSENT
The Board of Directors
Vitafort International Corporation and Subsidiaries:
We consent to incorporation by reference in the registration statement on
Form S-8 of Vitafort International Corporation and Subsidiaries of our report
dated March 23, 1995, relating to the consolidated balance sheets of Vitafort
International Corporation and Subsidiaries as of December 31, 1994 and 1993 and
the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for each of the years in the three-year period ended
December 31, 1994, which report appears in the December 31, 1994 annual report
on Form 10-KSB of Vitafort International Corporation and Subsidiaries.
Our report dated March 23, 1995, contains an explanatory paragraph that states
that the Company has suffered recurring losses from operations and has a net
capital deficiency, which raise substantial doubt about its ability to continue
as a going concern. The financial statements do not include any adjustments
that might result from the outcome of that uncertainty.
KPMG PEAT MARWICK LLP
Los Angeles, California
January 22, 1996
<PAGE>
EXHIBIT 99.01
VITAFORT INTERNATIONAL CORPORATION
1995 STOCK OPTION PLAN
----------
ADOPTED AS OF SEPTEMBER 1, 1995
1. THE PLAN. This 1995 Stock Option Plan (the "Plan") is intended to
provide an incentive to officers, directors, employees of Vitafort International
Corporation and its subsidiaries (the "Corporation") and third parties providing
services to the Corporation to acquire a proprietary interest in the Corporation
and to enable the Corporation to attract and retain such officers, directors,
employees and third persons providing services to the Corporation.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 15
hereof, the total number of shares of Common Stock of the Corporation ("Stock"
or "Shares") which may be issued pursuant to options, including Incentive Stock
Options (as hereinafter defined) and non-incentive stock options (collectively,
the "Options"), shall be Forty Million (40,000,000). Such shares of Stock may
be, in whole or in part, either authorized and unissued shares or treasury
shares as the Board of Directors of the Corporation (the "Board") shall from
time to time determine. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares covered thereby
shall (unless the Plan shall have been terminated) again be available for grant
under the Plan.
3. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Board or at the option of
the Board, by a committee of one or more members of the Board (the "Committee"),
each of whom may be eligible to participate in the Plan, but only to the extent
set forth below. The Committee shall be elected or appointed from time to time
by a majority of the whole Board. Within the express provisions of the Plan,
the Board and/or the Committee shall have plenary authority, in its discretion,
to determine the individuals to whom Options shall be granted ("Optionees"), the
time or times at which Options shall be granted, the type of Options, the
purchase price of the shares covered by each Option, the number of shares to be
subject to each Option (subject to the provisions of Paragraph 2) and the terms
of each Option. The Board and/or the Committee shall also have plenary
authority, subject to the express provisions of the Plan, to interpret the Plan,
to prescribe, amend and rescind any rules and regulations relating to the Plan
and to make all other determinations and take all other action in connection
with the Plan as it deems necessary or advisable. The interpretation and
construction by the Board and/or the Committee of any provisions of the Plan or
of any Option granted thereunder shall be conclusive, and no member of the Board
or the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option granted thereunder.
(b) Each member of the Board or the Committee shall be indemnified
and held harmless by the Corporation against any cost or expense (including
counsel fees) reasonably incurred by him or her, or liability (including any sum
paid in settlement of a claim with the approval of the Corporation) arising out
of any act or omission to act in connection with the Plan, unless arising out of
such member's own fraud or bad faith, to the extent permitted by applicable law.
Such indemnification shall be in addition to any rights of indemnification the
members may have as directors or otherwise under
B-1
<PAGE>
the Certificate of Incorporation or By-Laws of the Corporation, any agreement of
stockholders or disinterested directors or otherwise.
(c) (i) An option to purchase 5,000 shares of Common Stock shall
automatically be granted under the Plan to each individual who is appointed a
member of the Committee on each anniversary date of such appointment for so long
as such individual remains a member of the Committee.
(ii) The exercise price for options granted to members of the
Committee pursuant to Paragraph 3(c)(i) shall be the fair market value of the
shares covered thereby on the date the option is granted in accordance with the
provisions of Paragraph 3(c)(i). The fair market value of a share shall be:
(a) if the Common Stock is listed on a national securities
exchange, the closing price of such Common Stock on the principal national
securities exchange on which such Common Stock is traded on the date for which
such fair market value is determined (the "Determination Date"), or, if there
shall have been no sales on any such exchange on such Determination Date, the
average of the highest bid and lowest asked prices on such principal exchange on
such Determination Date; or
(b) if the Common Stock is not listed on a national securities
exchange, the closing price of such Common stock on the largest principal
securities exchange on which such Common Stock is traded on the Determination
Date, or, if the Common Stock is not listed on a securities exchange, such
closing price on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"), or, if there
shall have been no sales on such Determination Date on such exchange or the
NASDAQ National Market System, as the case may be, the average of the highest
bid and lowest asked prices on such Determination Date on such exchange or the
NASDAQ National Market System, as applicable; or
(c) if the Common Stock is not listed on a national securities
exchange or the NASDAQ National Market Stock as of the close of trading on the
Determination Date as quoted in the NASDAQ System; or
(d) if the Common Stock is not quoted in the NASDAQ System, the
average of the high bid and low asked prices on the Determination Date in the
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization.
(iii) Each option granted pursuant to Paragraph 3(c)(i) above (i)
shall be exercisable immediately as to none of the shares of Common Stock
covered thereby, shall become exercisable as to 20% of the shares covered
thereby on the first anniversary date of the grant thereof; and shall become
exercisable for an additional 20% of the number of shares of Common Stock
covered thereby on each of the four succeeding anniversaries of the grant of
such option, (ii) shall expire no more than ten years from the date of grant and
(iii) shall not be exercisable by the optionee until he or she executes and
delivers a written representation to the effect described in Paragraph 9(a)(iii)
below.
4. ELIGIBILITY. Subject to the limitations set forth in Paragraph 3(c)
above, options may be granted to directors, officers, consultants and other
persons employed or retained by the Corporation ("Eligible Persons"), except
that only those directors who are also salaried officers or employees of the
Corporation shall be eligible for the grant of Incentive Stock Options under the
Plan. Nothing contained in the Plan shall be construed to limit the right of
the Corporation to grant options otherwise than under the Plan for other
corporate purposes or to otherwise allocate shares of stock for grants to
employees. In making the determination as to persons to whom Options shall be
granted and as to the number of shares to be covered by such Options, the Board
and/or the Committee shall take into account the nature of their duties and the
value of their services, their present and potential contributions to the
success of the
B-2
<PAGE>
Corporation and such other factors as it shall deem relevant in connection with
accomplishing the purposes of the Plan.
5. TERM OF PLAN. The Plan shall terminate on, and no Options shall be
granted after, September 1, 2005, provided that the Board may at any time
terminate the Plan prior thereto.
6. MAXIMUM OPTION GRANT. With respect to Options which are intended to
qualify as Incentive Stock Options, the aggregate fair market value (determined
as of the time the Option is granted) of the Stock with respect to which
Incentive Stock Options granted to any Optionee (whether under this Plan or
under any other stock option plan of the Corporation) become exercisable for the
first time in any year may not exceed $100,000. The number of shares of Stock
for which any Optionee may be granted Options under the Plan not treated as
Incentive Stock Options shall be unlimited.
7. OPTION PRICE. Except as stated in Paragraph 3(c) hereof, the exercise
price under each Option shall be determined by the Board and/or the Committee;
provided, however, that, such exercise price shall not be less than of the fair
market value per Share at the time the Option is granted, nor less than 110% in
the case of an Incentive Stock Option granted to an individual who, at the time
the Option is granted, is a ten percent (10%) holder; and provided further,
however, that in the case of an Optionee who is an officer or director of the
Corporation, the exercise price shall be 100% (110% if such Optionee is also a
10% holder and the Option is an Incentive Stock Option) of the fair market value
per share at the time the Option is granted. The fair market value of shares of
Stock shall be determined in good faith by the Board and/or the Committee.
8. TERM OF OPTIONS. The term of each Option shall be for a maximum of
ten (10) years from the date of grant thereof, but may be for a lesser period or
be subject to earlier termination as hereinafter provided.
9. EXERCISE OF OPTIONS.
(a) An Option may be exercised from time to time as to any part or all of
the Stock to which the Optionee shall then be entitled, provided, however, that
an Option may not be exercised (i) except by an Optionee who was an Eligible
Person at all times beginning from the date of the grant of the Option to the
date three months before exercise of the Option (except as otherwise provided in
paragraphs 13 and 14), (ii) after termination of the Optionee's service by
reason of his or her dishonesty or wrongful conduct, and (iii) until such
Optionee executes and delivers, in form satisfactory to the Board and/or the
Committee, a written representation to the effect that he or she is acquiring
the stock for investment and not with the intent of distributing the same
(unless such stock shall be appropriately registered under the Securities Act of
1933 or exempt from registration).
(b) The purchase price of the Stock issuable upon exercise of an Option
shall be paid in full at the time of the exercise thereof (i) in cash or
certified or bank check or (ii) with the approval of the Board in its sole
discretion, by the transfer to the Corporation of shares of its Stock with a
fair market value (as determined by the Board) equal to the purchase price of
the Stock issuable upon exercise of such Option; provided, however, that in lieu
of payment in full in such manner, an optionee may with the approval of the
Board in its sole discretion, be entitled to pay for the shares purchased upon
exercise of the Option by payment to the Corporation in cash or by certified or
bank check a sum equal at least the par value of the Stock, with the remainder
of the purchase price satisfied by the issuance of an interest bearing
promissory note or notes (the "Note"), in a form and having terms, including
rate of interest, satisfactory to the Board in its sole discretion.
(c) The holder of an Option shall not have any rights as a stockholder
with respect to the Stock issuable upon exercise of an Option until certificates
for such Stock shall have been delivered to him after the exercise of the
Option.
B-3
<PAGE>
10. NON-TRANSFERABILITY OF OPTIONS. An Option granted under the Plan
shall not be transferable otherwise than by will or the laws of descent and
distribution and shall be exercisable only by the Optionee during his or her
lifetime. Upon any attempt to so transfer any such Option, or upon the levy or
attachment or similar process upon such Option, such Option shall automatically
become null and void.
11. FORM OF OPTION. Each Option granted pursuant to the Plan shall be
evidenced by an agreement (the "Option Agreement") which shall clearly identify
the status of the Options granted thereunder (i.e., whether an Incentive Stock
Option or non-incentive stock option) and which shall be in such form as the
Board and/or the Committee shall from time to time approve. The Option
Agreement shall comply in all respects with the terms and conditions of the Plan
and may contain such additional provisions, including, without limitation,
restrictions upon the exercise of the Option, as the Board and/or the Committee
shall deem advisable.
12. TERMINATION OF SERVICE. In the event that the services of an Optionee
shall be terminated (otherwise than by reason of death), such Option shall be
exercisable (to the extent that such Option was exercisable at the time of
termination of service) at any time prior to the expiration of a period of time
not exceeding three months after such termination, except that the Option shall
not be exercisable after termination of the Optionee's services by reason of his
or her dishonesty or wrongful conduct. In no event may such Option be
exercisable more than ten (10) years after the date on which such Option shall
have been granted. Nothing in the Plan or in the Option Agreement shall confer
upon the Optionee any right to be continued in the employ of the Corporation or
its subsidiaries or interfere in any way with the right of the Corporation or
any subsidiary to terminate or otherwise modify the terms of Optionee's
employment, provided, however, that a change in Optionee's duties or position
shall not affect such Optionee's Option so long as such Optionee is still an
employee of the Corporation or its subsidiaries.
13. DEATH OF OPTIONEE. In the event of the death of an Optionee, any
unexercised portion of his Option shall be exercisable (to the extent that such
Option was exercisable at the time of his death) at any time prior to the
expiration of the Option or of a period not exceeding six months after his
death, whichever shall occur first, but, in any event, not more than five (5)
years after the date on which such Option shall have been granted and shall be
exercisable only by his personal representative or such person or persons to
whom such deceased Optionee's rights shall pass under such Optionee's will or by
the laws of descent and distribution.
14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in the outstanding Stock of the Corporation by reason of stock dividends,
split-ups, recapitalizations, mergers, consolidations, combinations or exchanges
of shares, separations, reorganizations or liquidations, the number and class of
shares available under the Plan, the number and class of shares or the amount of
cash or other assets or securities available upon the exercise of any Option
granted hereunder and the maximum number of Shares as to which Options may be
granted to an Optionee shall be correspondingly adjusted, to the end that the
Optionee's proportionate interest in the Corporation, in any successor thereto
or in the cash, assets or other securities into which the shares are converted
or exchanged shall be maintained to the same extent, as near as may be
practicable, as immediately before the occurrence of any such event. All
references in this Plan to "Stock" from and after the occurrence of such event
shall be deemed for all purposes of this Plan to refer to such other class of
shares or securities issuable upon the exercise of Options granted pursuant
hereto.
15. SHAREHOLDER APPROVAL. This Plan is subject to and no Options shall be
exercisable hereunder until after approval by holders a majority of the shares
of the Stock of the Corporation within twelve months after the date of the
adoption of the Plan by the Board.
16. AMENDMENT OF THE PLAN. The Board may at any time and from time to
time, modify or amend the Plan (including the form of Option Agreement) in such
respects as it shall deem advisable,
B-4
<PAGE>
including modifications or amendments to comply with or take advantage of
changes in federal tax laws or regulations; except that without the requisite
shareholder approval, no such modification or amendment may (i) increase the
maximum number of shares of the Corporation's common stock which may be issued
under the Plan (except as provided by Paragraph 15), (ii) extend the term of the
Plan or the period during which Options may be granted or exercised, (iii)
reduce the Option price, in the case of Incentive Stock Options, below 100%
(110% in the case of an Incentive Stock Option granted to a 10% Holder) of the
fair market value of the Stock issuable upon exercise of Options at the time of
the granting thereof, other than to change the manner of determining the fair
market value thereof, (iv) materially increase the benefits accruing to
participants under the Plan, (v) alter in any way the class of persons eligible
to participate in the Plan, or (vi) with respect to options which are Incentive
Stock Options amend the plan in any respect which would cause such options to no
longer qualify for Incentive Stock Option treatment pursuant to the Internal
Revenue Code provided, however, that none of the provisions referred to in
Section (c)(2)(B) of Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended, may be amended more frequently than once every six months
other than to impact with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act or the rule thereunder. No termination or
amendment of the Plan shall, without the consent of the individual Optionee,
adversely affect the rights of such Optionee under an Option theretofore granted
to him or under such Optionee's Option Agreement.
17. TAXES. The Corporation may make such provisions as it may deem
appropriate for the withholding of any taxes which it determines is required in
connection with any Options granted under the Plan. The Corporation may further
require notification from the Optionees upon any disposition of Stock acquired
pursuant to the exercise of Options granted hereunder.
18. CODE REFERENCES AND DEFINITIONS. Whenever reference is made in this
Plan to a section of the Internal Revenue Code, the reference shall be to said
section as it is now in force or as it may hereafter be amended by any amendment
which is applicable to this Plan. The term "subsidiary" shall have the meaning
given to the term "subsidiary corporation" by Section 425(f) of the Internal
Revenue Code. The terms "Incentive Stock Option" and "ISO" shall have the
meanings given to them by Section 422A of the Internal Revenue Code. The term
"10% Holder" shall mean any person who, for purposes of Section 422A of the
Internal Revenue Code owns more than 10% of the total combined voting power of
all classes of stock of the employer corporation or of any subsidiary
corporation.
B-5
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EXHIBIT 99.02
FORM OF
STOCK OPTION AGREEMENT
NON-INCENTIVE STOCK OPTIONS
AGREEMENT made as of the day of November, 1995 between VITAFORT
INTERNATIONAL CORPORATION, a Delaware corporation (hereinafter referred to as
the "Company"), and _______________, an individual residing at _________________
(hereinafter referred to as the "Optionee").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has adopted the
Vitafort International Corporation 1995 Stock Option Plan (the "Plan"),
permitting the grant of stock options to officers, directors and other key
persons employed or retained by the Company or its subsidiaries or any parent
corporation of the Company. The stockholders of the Company have adopted the
Plan by the written consent of the holders of a majority of the issued and
outstanding shares of the Company's common stock, par value $.0001 per share,
("Common Stock") and an Information Statement, dated October 20, 1995 (the
"Information Statement"), has been mailed to the record holders of the Common
Stock. The Optionee is presently an officer, director, employee or consultant
of the Company. The Company is desirous of increasing the incentive of the
Optionee to exert Optionee's utmost efforts to improve the business and increase
the assets of the Company.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Company and the
Optionee hereby agree as follows:
1. GRANT OF OPTION. Pursuant to a determination by the Board of
Directors, the Company, subject to the terms of the Plan, a copy of which has
been delivered to the Optionee, completion of stockholder ratification of the
adoption of the Plan, the Company's satisfaction of certain equity financing
requirements set forth in its Information Statement, a copy of which has been
delivered to the undersigned, and this Agreement, hereby grants to the Optionee,
as a matter of separate inducement and agreement, and in addition to and not in
lieu of salary or other compensation for services, the right to purchase
(hereinafter referred to as the "Option") an aggregate of shares of
Common Stock of the Company, on the terms and conditions herein set forth,
subject to adjustment as provided in Section 8 hereof.
2. PURCHASE PRICE. The purchase price of the shares of Common Stock
covered by the Option will be $.15 per share, such being the average of the
closing bid and asked price of the Common Stock as reflected on the Electronic
Bulletin Board maintained by NASDAQ on the date of this grant, subject to
adjustment as provided in Section 8 hereof.
<PAGE>
3. EXERCISE OF OPTION.
(a) The Option shall become exercisable as follows: As to one-
third of the shares covered by this Option, on January 1, 1996 and as to an
additional one third on each succeeding January 1, provided that in no event
shall any portion of this option become exercisable unless a registration
statement covering the issuance of shares upon exercise of his Option, be made
effective in accordance with the rules of the Securities and Exchange
Commission.
(b) The Option may be exercised pursuant to the provisions of
this Section 3, by notice and payment to the Company as provided in Sections 9
and 14 hereof.
4. TERM OF OPTION.
(a) The term of the Option shall be a period expiring at 5:00
P.M. on ____________________ subject to earlier termination or cancellation as
provided herein. Except as otherwise provided in Sections 6 and 7 hereof, the
Option will not be exercisable unless the Optionee shall, at the time of
exercise, be an officer, director, employee or provider of services to the
Company or any of its subsidiaries.
(b) As used in this Agreement, the term "subsidiary" refers to
and includes each "subsidiary corporation" within the meaning of the term as
defined in Section 425(f) of the Internal Revenue Code of 1986, as amended.
(c) The holder of the Option will not have any rights to
dividends or any other rights of a stockholder with respect to any shares of
Common Stock subject to the Option until such shares shall have been issued to
such holder (as evidenced by the appropriate entry on the books of a duly
authorized transfer agent of the Company); provided that the date of issuance
shall not be earlier than the Closing Date (as hereinafter defined) with respect
to such shares pursuant to Section 9 hereof, upon purchase of such shares upon
exercise of the Option.
5. NON-TRANSFERABILITY OF OPTION. The Option shall not be
transferable otherwise than by will or by the laws of descent and distribution,
and the Option may be exercised during the lifetime of the Optionee only by him.
More particularly, but without limiting the generality of the foregoing, the
Option may not be assigned, transferred or otherwise disposed of, or pledged or
hypothecated in any way (whether by operation of law or otherwise), and shall
not be subject to execution, attachment or other process. Any assignment,
transfer, pledge, hypothecation or other disposition of the Option attempted
contrary to the provisions of this Agreement, or any levy of execution,
attachment or other process attempted upon the Option, shall be null and void
and without effect. Any attempt to make any such assignment, transfer, pledge,
hypothecation or other disposition of the Option or any attempt to make any such
levy of execution, attachment or other process shall cause the Option to
terminate immediately upon the happening of any such event if the Board of
Directors of the Company, at any time, should, in its sole discretion, so elect,
by written
2
<PAGE>
notice to the Optionee or to the person or persons then entitled to exercise the
Option under the provisions of Section 7 hereof; provided, however, that any
such termination of the Option under the foregoing provisions of this Section 5
will not prejudice any rights or remedies that the Company or any subsidiary
thereof may have under this Agreement or otherwise.
6. EXERCISES UPON CESSATION
OF EMPLOYMENT OR ASSOCIATION.
(a) If the Optionee ceases to serve as an employee or officer of
or provider of services to the Company or any of its subsidiaries by reason of
Optionee's discharge by reason of dishonesty or wrongful conduct, the Option
will forthwith terminate. If, however, the Optionee for any other reason (other
than death) ceases to serve as an employee, officer or provider of services of
or to the Company or its subsidiaries, the Option may, subject to the provisions
of Section 5 hereof, be exercised to the same extent the Optionee would have
been entitled under Section 3 hereof to exercise the Option on the date of such
cessation of employment or other association, at any time within three (3)
months after such cessation of employment or other association, at the end of
which period the Option shall terminate. In any event, the Option may not be
exercised after the expiration of the term provided in Section 4 hereof.
(b) The Option shall not be affected by any change of duties of
the Optionee so long as he continues to serve as an employee, officer, director
or provider of services to or of the Company or any subsidiary thereof. If the
Optionee is granted a temporary leave of absence, such leave of absence will be
deemed a continuation of his service to the Company or any subsidiary thereof
for the purposes of this Agreement, but only if and so long as the corporation
for which such service is rendered in its sole discretion consents thereto.
(c) Any termination of this Option by reason of cessation of
service, whether under this Section 6 or Section 7 hereof, shall be without
prejudice to any rights or remedies that the Company or any subsidiary thereof
may have against the Optionee hereunder or otherwise.
7. EXERCISE UPON DEATH OR DISABILITY. If the Optionee dies at a
time when this option is exercisable under the provisions of Section 6 hereof or
becomes incapacitated or incompetent and is not able to manage his affairs, the
Option may, subject to the provisions of Section 5 hereof, be exercised, to the
extent the Optionee would have been entitled under Section 3 hereof to exercise
the Option on the day preceding the date of Optionee's death, by the estate of
the Optionee or by the person or persons (including the estate of any such
person or persons who have died) who acquire the right to exercise the Option by
bequest or inheritance at any time within the period ending on the last to occur
of: (i) six (6) months after the death of the Optionee and (ii) three (3) months
after the appointment of an administrator executor or other fiduciary of the
estate or affairs of the Optionee, at the end of which period
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<PAGE>
the Option shall terminate. In any event, the Option may not be exercised after
the expiration of the term provided in Section 4 hereof.
8. ADJUSTMENTS. In the event of a stock dividend, stock split-up,
share combination, exchange of shares, re-capitalization, merger, consolidation,
acquisition or disposition of property or shares, reorganization, liquidation or
other similar changes or transactions of or by the Company, the Board of
Directors of the Company shall make (or shall undertake to have the Board of
Directors of any corporation that merges with, or acquires the stock or assets
of, the Company make) such adjustment of the number or class of shares then
covered by the Option, or of the option price, or both, as it shall, in its sole
discretion, deem appropriate to give proper effect to such event; provided,
however, that no such adjustment shall be made so as to constitute a
modification, extension or renewal of the Option within the meaning of Section
424(h) of the Internal Revenue Code of 1986, as amended (the "Code"), or so as
to prevent the Company or any other corporation or a subsidiary thereof, if the
Optionee shall become employed by such corporation by reason of the transaction
in respect of which such adjustment is made, from being a corporation issuing or
assuming the Option in a transaction to which Section 424(a) of the Code
applies.
9. METHOD OF EXERCISE OF OPTION.
(a) Subject to the terms and conditions of this Agreement, the
Option shall be exercisable by notice and payment to the Company in accordance
with the procedure prescribed herein. Each such notice shall:
(i) state the election to exercise the Option and the number of
shares in respect of which it is being exercised;
(ii) contain a representation and agreement as to investment intent
and other matters, if required by counsel to the Company with respect to
such shares, in form satisfactory to counsel for the Company; and
(iii) be signed by the person or persons entitled to exercise the
Option and, if the Option is being exercised by any person or persons other
than the Optionee, be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person or persons to exercise the Option.
(b) Upon receipt of such notice, the Company shall specify, by
written notice to the Optionee, a date and time (such date and time being herein
called the "Closing Date") and place for payment of the full purchase price of
such shares. The Closing Date shall be not more than fifteen (15) days from the
date the notice of exercise is received by the Company unless another date is
agreed upon by the Company and the Optionee or is required upon advice of
counsel for the Company in order to meet the requirements of Section 11 hereof.
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<PAGE>
(c) Payment of the purchase price of any shares of Common Stock,
in respect of which the Option shall be exercised, shall be made by the Optionee
at the place specified by the Company on or before the Closing Date by
delivering to the Company a certified or bank cashier's check in the amount of
such purchase price payable to the order of the Company. In lieu of the
foregoing method of payment, with the consent of the Board of Directors the
Optionee may elect to deliver either a bank or certified check equal to the
aggregate purchase price of the Shares. The Option shall be deemed to have been
exercised with respect to any particular shares of Common Stock if, and only if,
the preceding provisions of this Section 9 and the provisions of Section 10
hereof shall have been complied with, in which event the Option shall be deemed
to have been exercised on the Closing Date. Anything in this Agreement to the
contrary notwithstanding, any notice of exercise given pursuant to the
provisions of this Section 9 shall be void and of no effect if all the preceding
provisions of this Section 9 and the provisions of Section 11 hereof shall not
have been complied with. The certificate or certificates for shares of Common
Stock as to which the Option shall be exercised shall be registered in the name
of the Optionee or, if the Optionee so requests in the notice exercising the
Option, shall be registered in the name of the Optionee and another person
jointly, with right of survivorship, and shall be delivered on the Closing Date
to the Optionee at the place specified for the closing, but only upon compliance
with all of the provisions of this Agreement. If the Optionee fails to accept
delivery of and pay for all or any part of the number of shares specified in
such notice upon tender or delivery thereof on the Closing Date, Optionee's
right to exercise the Option with respect to such undelivered shares may be
terminated in the sole discretion of the Board of Directors of the Company. The
Option may be exercised only with respect to full shares.
10. APPROVAL OF COUNSEL. The exercise of the Option and the issuance
and delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Company's counsel of all legal matters in connection therewith,
including compliance with the requirements of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, and the requirements of any stock exchange upon which
the Common Stock may then be listed.
11. RESALE OF COMMON STOCK.
(a) Upon any sale or transfer of the Common Stock purchased upon
exercise of the Option, the Optionee shall deliver to the Company an opinion of
counsel satisfactory to the Company to the effect that either (i) the Common
Stock to be so sold or transferred has been registered under the Securities Act
of 1933, as amended, and that there is in effect a current prospectus meeting
the requirements of Subsection 10(a) of said Act, which is being or will be
delivered to the purchaser or transferee at or prior to the time of delivery of
the certificates evidencing the Common Stock to be sold or transferred, or (ii)
such Common Stock may then be sold without violating Section 5 of said Act.
(b) The Common Stock issued upon exercise of the Option shall
bear the following legend if required by counsel for the Company:
5
<PAGE>
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNLESS, IN THE OPINION OF
COUNSEL FOR THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.
12. RESERVATION OF SHARES. The Company shall at all times
during the term of the Option reserve and keep available such number of shares
of the class of stock then subject to the Option as will be sufficient to
satisfy the requirements of this Agreement.
13. LIMITATION OF ACTION. The Optionee and the Company each
acknowledge that every right of action accruing to the Optionee or Company, as
the case may be, and arising out of or in connection with this Agreement against
the Company or any subsidiary thereof, on the one hand, or against the Optionee,
on the other hand, shall, irrespective of the place where an action may be
brought, cease and be barred by the expiration of one (1) year from the date of
the act or omission in respect of which such right of action arises.
14. NOTICES. Each notice relating to this Agreement shall be in
writing and delivered in person or by certified or registered mail, return
receipt requested, or by nationally recognized overnight courier service
providing for a signed return receipt, to the proper address. All notices to
the Company shall be addressed to it at 1800 Avenue of the Stars - Suite 480,
Los Angeles, California 90067, Attn: Corporate Secretary. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect, effective upon actual receipt thereof. If the Company shall
file a periodic report on Form 10-Q or 10-K or any successor form with the
Securities and Exchange Commission which indicates a new address for its
principal office, such filing shall also be deemed a notice to the Optionee of
such new address.
15. SEVERABILITY. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal or unenforceable, such
illegality or unenforceability shall not affect the legality or enforceability
of the remaining legal and enforceable provisions hereof, which shall be
constructed as if such illegal or unenforceable provision or provisions had not
been inserted.
16. CONFLICTING PROVISIONS. In the event of any conflict
between any provision of this Agreement and the Plan, the relevant provision of
the Plan shall control. In the event of any conflict between the provisions of
this Agreement and any employment agreement (the "Employment Agreement") which
may exist between Optionee and the Company or a subsidiary of the Company, the
relevant provisions of the Employment Agreement shall control unless such
provisions are inconsistent with the provisions of the Plan.
6
<PAGE>
17. GOVERNING LAW. This Agreement will be construed and
governed in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
VITAFORT INTERNATIONAL CORPORATION
By:
------------------------------
Mark Beychok, President
------------------------------
Optionee
7
<PAGE>
SCHEDULE OF GRANTS
NAME NUMBER OF OPTIONS
Mark Beychok 3,000,000
Sheldon Schrager 4,000,000
Stanley J. Pasarell 3,000,000
Donald Wohl 3,000,000
Kenneth Berg 1,000,000
8
<PAGE>
EXHIBIT 99.03
EXCEPT AS PERMITTED BY SECTION 8 HEREOF, NO TRANSFER SHALL BE MADE AT
ANY TIME UNLESS THE COMPANY SHALL HAVE BEEN SUPPLIED WITH EVIDENCE
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
VITAFORT INTERNATIONAL CORPORATION
______________________
OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF DECEMBER 16, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: Mark Beychok
ADDRESS: 1800 Avenue of the Stars, Suite 480
Los Angeles, CA
90067
or registered assigns (the "Holder") are entitled, subject to the terms set
forth, to purchase from Vitafort International Corporation (the "Company"), a
Delaware corporation, having its offices at Suite 480, 1800 Avenue of the Stars,
Los Angeles, California 90067, up to TEN MILLION SEVEN HUNDRED FIFTY THOUSAND
(10,750,000) shares of the Company's common stock subject to adjustment as set
forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock including Underlying Securities, as more fully
set forth in Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be "EXERCISE PRICE" Cents
($ .15) per share.
(c) "Underlying Securities" or "Underlying Shares"or "Underlying Stock"
shall refer to the Common Shares or other securities or property
issuable or issued upon exercise of this Option.
(d) The options vest one third of the toal on each of 1/1/97, 1/1/98, and
1/1/99.
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<PAGE>
2. (a) The purchase rights represented by this Option may be exercised by the
Holder hereof, in whole or in part (but not as to less than a whole
Common Share), at any time, and from time to time, during the period
commencing this date, until DECEMBER 16, 2000 (the "Expiration Date"),
by the presentation of this Option, with the purchase form attached
duly executed, at the Company's office (or such office or agency of
the Company as it may designate in writing to the Holder hereof by
notice pursuant to Section 14 hereof), specifying the number of Common
Shares as to which the Option is being exercised, and upon payment by
the Holder to the Company in cash or by certified check or bank draft,
in an amount equal to the Option Price times the number of Common
Shares then being purchased hereunder.
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on the
date on which this Option shall have been presented and payment made
for such Underlying Securities as aforesaid. Certificates for the
Underlying Securities so obtained shall be delivered to the Holder
hereof within a reasonable time, not exceeding seven (7) days, after
the rights represented by this Option shall have been so exercised.
If this Option shall be exercised in part only or transferred in part
subject to the provisions herein, the Company shall, upon surrender of
this Option for cancellation or partial transfer, deliver a new Option
evidencing the rights of the Holder hereof to purchase the balance of
the Underlying Shares which such Holder is entitled to purchase
hereunder. Exercise in full of the rights represented by this Option
shall not extinguish the rights granted under Section 9 hereof.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Common Shares as
are purchasable hereunder; and (ii) this Option may be divided or combined
with other Options which carry the same rights, in either case, upon
presentation hereof at the aforesaid office of the Company together with a
written notice, signed by the Holder hereof, specifying the names and
denominations in which new Options are to be issued, and the payment of any
transfer tax due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option Price
and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, stock dividend, or
split-up thereof or other means, the number of Common Shares subject
to this Option immediately prior to such subdivision shall be
proportionately increased and the Option Price shall be
proportionately decreased, and if the Company shall at any time
combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof or other means, the number of
Common Shares subject to this Option immediately prior to such
combination shall be proportionately decreased and the Option Price
shall be proportionately increased. Any such adjustment and
adjustment to the Option Price shall become effective at the close of
business on the record date for such subdivision or combination.
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<PAGE>
(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not limited
to Common Shares, or other assets (other than a cash distribution made
as a dividend payable out of earnings or out of any earned surplus
legally available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Option Price and the
type and/or number of Underlying Securities in effect immediately
prior to the record date of such distribution as may be necessary to
preserve to the Holder of this Option rights substantially
proportionate to and economically equivalent to those enjoyed
hereunder by such Holder immediately prior to the happening of such
distribution. Any such adjustment made reasonably and in good faith
by the Board of Directors shall be final and binding upon the Holders
and shall become effective as of the record date for such
distribution.
(c) No adjustment in the number of Common Shares subject to this Option or
the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of
shares of at least 1% of the then adjusted number of Common Shares
issuable upon exercise of the Option, provided, however, that any
adjustments which by reason of the foregoing are not required at the
time to be made shall be carried forward and taken into account and
included in determining the amount of any subsequent adjustment. If
the Company shall make a record of the Holders of its Common Shares
for the purpose of entitling them to receive any dividend or
distribution and legally abandon its plan to pay or deliver such
dividend or distribution then no adjustment in the number of Common
Shares subject to the Option shall be required by reason of the making
of such record.
(d) In case of any capital reorganization or reclassification or change of
the outstanding Common Shares (exclusive of a change covered by
Section 4(a) hereof or which solely affects the par value of such
Common Shares) or in the case of any merger or consolidation of the
Company with or into another corporation (other than a consolidation
or merger in which the Company is the continuing corporation and which
does not result in any reclassification, change, capital
reorganization or change in the ownership of the outstanding Common
Shares), or in the case of any sale or conveyance or transfer of all
or substantially all of the property of the Company and in connection
with which the Company is dissolved, the Holder of this Option shall
have the right thereafter (until the expiration of the right of
exercise of this Option) to receive upon the exercise hereof, for the
same aggregate Option Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities
or property receivable upon such reclassification, change, capital
reorganization, merger or consolidation, or upon the dissolution
following any sale or other transfer, by a holder of the number of
Common Shares of the Company equal to the number of common shares
obtainable upon exercise of this Option immediately prior to such
event; and if any reorganization, reclassification, change, merger,
consolidation, sale or transfer also results in a change in Common
Shares covered by Section 4(a), then such adjustment shall be made
pursuant to both this Section 4(d) and Section 4(a). The provisions
of this Section 4(d) shall similarly apply to successive
reclassification, or capital reorganizations, mergers or
consolidations, changes, sales or other transfers.
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<PAGE>
(e) The Company shall not be required to issue fractional Common Shares
upon any exercise of this Option. As to any final fraction of a
Common Share which the Holder of this Option would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the
same fraction of the market value of a share of such stock on the
business day preceding the day of exercise or book value as determined
by the Company's independent public accountants if not publicly
traded. The Holder of this Option, by his acceptance hereof,
expressly waives any right to receive any fractional shares of stock
upon exercise of this Option.
(f) As used herein, the current market price ("Market Price") per share at
any date shall be the price of Common Shares on the business day
immediately preceding the event requiring an adjustment hereunder and
shall be (A) if the principal trading market for such securities is an
exchange, the closing price on such exchange on such day provided if
trading of such Common Shares is listed on any consolidated tape, the
price shall be the closing price set forth on such consolidated tape
or (B) if the principal market for such securities is the over-the-
counter market, the high bid price on such date as set forth by NASDAQ
or closing price if listed on NASDAQ NMS or, if the security is not
quoted on NASDAQ, the high bid price as set forth in the NATIONAL
QUOTATION BUREAU sheet listing such securities for such day.
Notwithstanding the foregoing, if there is no reported closing price
or high bid price, as the case may be, on a date prior to the event
requiring an adjustment hereunder, then the current market price shall
be determined as of the latest date prior to such day for which such
closing price or high bid price is available.
(g) Irrespective of any adjustments pursuant to this Section 4 in the
Option Price or in the number, or kind, or class of shares or other
securities or other property obtainable upon exercise of this Option,
and without impairing any such adjustment the certificate representing
this Option may continue to express the Option Price and the number of
Common Shares obtainable upon exercise at the same price and number of
Common Shares as are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the Option
Price shall be determined exclusively pursuant to the provisions
hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number of
Underlying Securities purchasable and the price per share upon
exercise of this Option and shall set forth in reasonable detail the
events which resulted in such adjustment.
5. For the purposes of this Option, the terms "Common Shares" or "Common
Stock" shall mean (i) the class of stock designated as the common stock of
the Company on the date set forth on the first page hereof or (ii) any
other class of stock resulting from successive changes or reclassification
of such Common Stock consisting solely of changes from par value to no par
value, or from no par value to par value or changes in par value. If at
any time, as a result of an adjustment made pursuant to Section 4, the
securities or other property obtainable upon exercise of this Option shall
include shares or other securities of another corporation or other
property, then thereafter, the number of such other shares or other
securities or property so obtainable shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
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<PAGE>
practicable to the provisions with respect to the Common Shares contained
in Section 4, and all other provisions of this Option with respect to
Common Shares shall apply on like terms to any such other shares or other
securities or property. Subject to the foregoing, and unless the context
requires otherwise, all references herein to Common Shares shall, in the
event of an adjustment pursuant to Section 4, be deemed to refer also to
any other shares or other securities or property when obtainable as a
result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this Option
may be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the purposes
of issuance upon exercise of this Option, such number of its Common
Shares as shall be issuable upon the exercise of this Option and at
its expense will obtain the listing thereof on all quotation systems
or national securities exchanges on which the Common Shares are then
listed; and if at any time the number of authorized Common Shares
shall not be sufficient to effect the exercise of this Option, the
Company will take such corporate action as may be necessary to
increase its authorized but unissued Common Shares to such number of
shares as shall be sufficient for such purpose; the Company shall have
analogous obligations with respect to any other securities or property
issuable upon exercise of this Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued,
fully paid, non-assessable and free from all taxes, liens and charges
with respect to the issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of Common
Shares upon the exercise of the rights represented by this Option
shall be borne by the Company, but in no event shall the Company be
responsible or liable for income taxes or transfer taxes upon the
transfer of any Options.
7. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
8. No transfer of all or a portion of the Option or Underlying Securities
shall be made at any time unless the Company shall have been supplied with
evidence reasonably satisfactory to it that such transfer is not in
violation of the Securities Act of 1933, as amended (the "Act"). Subject to
the satisfaction of the aforesaid condition and upon surrender of this
Option or certificates for any Underlying Securities at the office of the
Company, the Company shall deliver a new Option or Options or new
certificate or certificates for Underlying Securities to and in the name of
the assignee or assignees named therein. Any such certificate may bear a
legend reflecting the restrictions on transfer set forth herein.
9. If this Option is lost, stolen, mutilated or destroyed, the Company shall,
on such terms as to indemnity or otherwise as the Company may reasonably
impose, issue a new Option of like denomination, tenor and date. Any such
new Option shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Option shall be at any time enforceable by anyone.
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<PAGE>
10. Any Option issued pursuant to the provisions of Section 9 hereof, or upon
transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option or Options, shall set forth each
provision set forth in Sections 1 through 15, inclusive, of this Option as
each such provision is set forth herein, and shall be duly executed on
behalf of the Company by its chief executive officer or chief operating
officer.
11. Upon surrender of this Option for transfer or exchange or upon the exercise
hereof, this Option shall be cancelled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of a
partial exercise, Section 3 in case of an exchange or Section 8 in case of
a transfer, or Section 9 in case of mutilation. Any new Option certificate
shall be issued promptly but not later than fifteen (15) days after receipt
of the old Option certificate.
12. This Option shall inure to the benefit of and be binding upon the Holder
hereof, the Company and their respective successors, heirs, executors,
legal representatives and assigns.
13. All notices required hereunder shall be in writing and shall be deemed
given when telegraphed, delivered personally or within two (2) days after
mailing when mailed by certified or registered mail, return receipt
requested, to the party to whom such notice is intended, at the address of
such other party as set forth on the first page hereof, or at such other
address of which the Company or Holder has been advised by the notice
hereunder.
14. In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Holders shall be enforceable to the fullest extent permitted by law.
15. The validity, interpretation and performance of this Option and of the
terms and provisions hereof shall be governed by the laws of the State of
California applicable to agreements entered into and performed entirely in
such state.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of DECEMBER 30, 1995.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Eloy L. Ellis
------------------------------------------
Eloy L. Ellis, Acting Chief Financial Officer
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<PAGE>
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably elects to
exercise the right to purchase __________ Common Shares evidenced by the within
Option, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set forth
below.
________________________ , 19_____
__________________________________________
Signature
________________________________________
Print Name of Signatory
___________________________________
Name to whom certificates are to be issued if different from above
______________________________________
(Street Address)
_________________________________
(City, State Zipcode)
______________________________________
(Tax Payer I.D. Number)
If said number of shares and warrants shall not be all the shares purchasable
under the within Option, the undersigned requests that a new Option for the
unexercised portion shall be registered in the name of:
____________________________
(Please Print)
______________________________________
(Street Address)
______________________________
(City, State Zipcode)
____________________________________
(Tax Payer I.D. Number)
________________________
Signature
________________________________________
Print Name of Signatory
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<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED____________________________________, hereby sells,
assigns and transfers to ____________________________________ ,(Social
Security or I.D. No.________________________) the within Option, or
that portion of this Option purchasable for _______ common shares
together with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint __________________________________
attorney to transfer such Option on the register of the within named
Company, with full power of substitution.
____________________________
(Signature)
Dated:___________ , 19______
Signature Guaranteed:
________________________________________
(INTENTIONALLY BLANK)
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<PAGE>
EXHIBIT 99.04
VITAFORT INTERNATIONAL CORPORATION
Shares of Common Stock
($.0001 par value per share)
Issuable Pursuant to Options
Granted or Which May be Granted Under its
1995 STOCK OPTION PLAN
------------------------------
THIS DOCUMENT CONSTITUTES
PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES
ACT OF 1933.
------------------------------
<PAGE>
TABLE OF CONTENTS
HEADING Page
- ------- ----
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECURITIES OFFERED . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SUMMARY OF THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . 3
GENERAL INFORMATION REGARDING THE PLAN . . . . . . . . . . . . . . . . 3
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Administration and Duration . . . . . . . . . . . . . . . . . . . 4
Termination, Amendment and Modification . . . . . . . . . . . . . 5
Eligibility and Extent of Participation . . . . . . . . . . . . . 5
(Terms of Options)
Term of Options. . . . . . . . . . . . . . . . . . . . . . . 6
Option Exercise Price. . . . . . . . . . . . . . . . . . . . 6
Exercisability . . . . . . . . . . . . . . . . . . . . . . . 6
Payment on Exercise of Options . . . . . . . . . . . . . . . 7
Adjustments Upon Changes in Capitalization . . . . . . . . . 7
Withdrawal from Plan . . . . . . . . . . . . . . . . . . . . 7
Lack of Transferability of Options . . . . . . . . . . . . . 8
APPLICABILITY OF ERISA; QUALIFICATION UNDER CODE SECTION 401 (a) . . . 8
INCOME TAX CONSEQUENCES. . . . . . . . . . . . . . . . . . . . . . . . 8
Federal Income Tax Consequences:
Generally. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Non-Incentive Stock Options. . . . . . . . . . . . . . . . . 9
Incentive Stock Options. . . . . . . . . . . . . . . . . . . 9
State and Local Tax Consequences. . . . . . . . . . . . . . . . . 10
RESTRICTIONS ON RESALE . . . . . . . . . . . . . . . . . . . . . . . . 11
FURTHER INFORMATION ABOUT THE PLAN/INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . 11
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<PAGE>
THE COMPANY
Vitafort International Corporation (the "Company") is a Delaware
corporation whose principal executive offices are located at 1800 Avenue of the
Stars, Los Angeles California 90067 (telephone: (310) 552-6393.
SECURITIES OFFERED
The securities are offered pursuant to the Company's 1995 Stock Option Plan
(the "Plan") described below. The securities offered pursuant to the Plan are
shares of the Company's Common Stock Company having a par value of $.0001 per
share ("Common Stock"). Shares delivered upon exercise of options may be either
treasury stock or newly issued shares. The Plan authorizes the grant of options
to purchase up to 40,000,000 shares of the Company's Common Stock.
SUMMARY OF THE PLAN
The Plan was adopted by the Board of Directors of the Company (sometimes
hereinafter, the "Board") and approved by the stockholders of the Company on
during the period September to November 1995. The Plan is intended to comply
with the provisions of Section 16b-3 of the Securities Exchange Act of 1934, as
amended. No options granted under the Plan are "qualified" within the meaning
of the Internal Revenue Code of 1986, as amended (the "Code"). Certain of the
options granted under the Plan may be are eligible for treatment as Incentive
Stock Options ("ISO's") within the meaning of Section 422A of the Code. (See
heading hereunder entitled "Federal Income Tax Consequences.")
As of January , 1996, options to purchase all 40,000,000 shares of Common
Stock were outstanding under the Plan, all having expiration dates of in
November 199_, and all having an exercise price of $.15. As of January , 1996
no options granted under the Plan had been exercised.
If for any reason an option granted under the Plan is cancelled or expires
in whole or in part prior to termination or expiration of the Plan, any
unpurchased shares covered thereby shall again be available for grant under the
Plan provided that such later option is granted before termination of the Plan.
GENERAL INFORMATION REGARDING THE PLAN
The following statements include summaries of certain provisions of the
Plan and the options granted thereunder. These statements do not purport to be
complete and are
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<PAGE>
qualified in their entirety by reference to the provisions of the Plan, a
copy of which has been filed an exhibit to the Registration Statement of
which this Prospectus forms a part.
PURPOSE.
The purpose of the Plan is to encourage ownership of stock of the Company
by employees, officers, directors and other persons retained by and providing
services to the Company and its subsidiaries and to provide additional
incentives for them to promote the success of the Company.
ADMINISTRATION AND DURATION.
The Plan is administered by the Board of Directors of the Company. As of
the date of this Prospectus, the members of the Board and their addresses and
telephone numbers are as follows:
NAME ADDRESS AND TELEPHONE NUMBER
---- ----------------------------
Sheldon Schrager 1800 Avenue of the Stars - Suite 480
Los Angeles, California 90067
(310) 552-6393
Mark Beychok 1800 Avenue of the Stars - Suite 480
Los Angeles, California 90067
(310) 552-6393
Donald T. Wohl 1800 Avenue of the Stars - Suite 1114
Los Angeles, California 90067
(310) 551-1027
Stanley J. Passarel 5 Lindview
San Rafael, California 94901
(415) 459-3029
The Board of Directors is divided into three classes and one third of the
Board of directors is elected annually by shareholders and serve until their
successors are duly elected and qualify. Board members may be removed for cause
by the affirmative vote of the holders of a majority of shares outstanding and
entitled to vote for such purpose. Although the Plan may be administered by a
committee of the Board, the Board has not deemed it necessary to establish a
committee for that purpose. If the Board determines to establish a Committee to
administer the Plan, members of the Committee will be
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<PAGE>
appointed by the Board and serve until their successors are duly appointed. The
Committee members may be removed from office by a majority vote of the Board of
Directors of those present at a meeting at which a quorum is present. A
majority of directors constitutes a quorum for the transaction of business.
The Plan is due to expire on September 1, 2005. The Board may terminate
the Plan at any time prior to its scheduled expiration.
TERMINATION, AMENDMENT AND MODIFICATION.
The Board may modify or amend the Plan from time to time pursuant to its
power and authority thereunder, except that, without majority stockholder
approval, the Board may not (a) increase the maximum number of shares which in
the aggregate are subject to options under the Plan (except in cases of changes
in capitalization); (b) extend the terms of the Plan or the periods during which
options may be granted or exercised; (c) in the case of any ISO granted under
the Plan, reduce the option price below 100% (or below 110% in the case of an
ISO granted to a "10% Holder", as such term is defined, under the Plan) of the
fair market value of the stock issuable upon exercise of an option at the time
of such option's grant (except that the Board may change the manner of
determining the fair market value of the stock); (d) modify the requirements as
to eligibility for participation in the Plan; (e) materially increase the
benefits accruing to participants under the Plan; or (f) with respect to amend
the Plan in any respect which would cause such options to no longer qualify for
ISO treatment under the Code. No termination or amendment of the Plan can,
without the consent of an individual option holder, adversely affect the rights
of such option under an option previously granted to such option under any of
the Plans. A "10% Holder" is a person who owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company.
ELIGIBILITY AND EXTENT OF PARTICIPATION.
All employees, officers, directors and other key persons retained by and
providing services to the Company or its subsidiaries are eligible to
participate under the Plan. The Board determines which of such persons shall be
granted options and the number of shares subject to such options. In making
such determinations, the Board may consider a person's duties, present and
potential contributions to the success of the Company and such other factors as
the Board may deem relevant in accomplishing the purposes of the Plan. Other
than the limitations as to the total number of shares that may be subject to
options under the Plans, there are no restrictions on the number of shares that
may be subject to options which remain available for grant by the Company.
However, the number of options granted to any individual during any calendar
year
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<PAGE>
which may be eligible for treatment under each of the Plans as ISO's is limited
as described in this Prospectus under the heading "Federal Income Tax
Consequences." As of January , 1996, employees and four directors were
participants in the Plan, and all of the Company's approximately employees
were eligible to participate in the Plans.
TERM OF OPTIONS.
Each option that has been granted has a term of ___ years commencing from
the date of its grant. Options granted in the future shall have a term as set
forth in the option, but in no event shall such term be more than ten years.
OPTION EXERCISE PRICE.
The exercise price of (a) any option and ISO granted under the Plan may not
be less than the 85% of the fair market value of the Company Stock at the time
of its grant. The exercise price, however, of an ISO granted under the Plan to
a 10% Holder may not be less than 110% of such fair market value. The exercise
price of non-ISO options shall be as determined by the Board of Directors or by
the Committee.
EXERCISABILITY.
The Board of Directors or, if one is appointed, the Committee determines
the time at which options may be exercised. Except in cases of an employee's
death or termination of employment as discussed below, no option may be
exercised by or on behalf of an employee to whom an option has been granted
unless such employee has been in the continuous employ of the Company or its
subsidiaries from the date of such option's grant to a date which is three
months before its exercise. Each option granted under any of the Plans to an
employee who subsequently dies but who was entitled to exercise such option at
the time of his death, may be exercised only by such employee's heirs or
devisees prior to the first to occur of: (i) six months after the death of such
employee or (ii) three months after the appointment of an executor or
administrator, but in no event later than the expiration of the term of the
option. Similarly, any option granted under the Plan to an employee whose
employment with the Company or its subsidiaries is terminated, other than for
cause, after the date of such grant but who would have been entitled to exercise
his option at the time of termination of his employment, may be exercised within
three months after such employee's termination of employment but in no event
later than the expiration of the term of the option.
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<PAGE>
PAYMENT ON EXERCISE OF OPTIONS.
The Plan provides that the purchase price of the stock issuable upon
exercise of an option shall be paid in full at the time of such exercise in
cash, by payment to the Corporation in United States dollars in currency or by
certified or bank check, or postal or express money order.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of changes in the outstanding capital stock of the Company by
reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations or
reorganizations, the number and class of shares available under the Plan, the
number and class of shares or the amount of cash or other assets or securities
available upon the exercise of any options granted under the Plan, and the
maximum number of shares as to which options may be granted, shall be
correspondingly adjusted, to the end that an optionee's proportionate interest
in the Company, any successor thereto, or in the cash, assets or other
securities into which shares are converted or exchanged, shall be maintained to
the same extent, as near as may be practicable, as immediately before the
occurrence of such event.
WITHDRAWAL FROM PLAN.
The unexercised portion of any option granted under the Plan automatically
terminates upon the earliest to occur of the stated termination date of the
option or the following:
(a) in the event the optionee's service with the Company or its
subsidiaries is terminated by reason of the optionee's death or disability,
then upon the first to occur of: (i) six months from the date of death or
termination of employment or (ii) three months from the date an
administrator, executor or other fiduciary is appointed for the estate of
such decedent;
(b) in the event the optionee's service with the Company or its
subsidiaries is terminated by the Company without cause or due to the
optionee's disability, or by the optionee with the Company's prior consent,
three months from the effective date of termination; or
(c) in the event the optionee's service with the Company or its
subsidiaries is terminated for any other reason, including the optionee's
voluntary
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<PAGE>
resignation or retirement without the Company's prior consent or a
termination for cause, immediately upon termination of service.
LACK OF TRANSFERABILITY OF OPTIONS.
Options granted under the Plan are not transferable otherwise than by will
or the laws of descent and distribution and, except as expressly provided above
under the heading "Exercisability", are exercisable only during the optionee's
lifetime.
REPORTS.
Reports regarding the amounts and status of the accounts of the
participants in the Plans, will be made with respect to an individual
participant upon the request of such participant.
APPLICABILITY OF ERISA; QUALIFICATION UNDER CODE SECTION 401(A)
The Plans are not subject to any provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") and are not qualified under Section 401(a)
of the Code. There will be no fees, commissions or other charges in connection
with the purchase of Common Stock pursuant to the Plans other than payment of
the option exercise price.
INCOME TAX CONSEQUENCES
FEDERAL INCOME TAX CONSEQUENCES.
GENERALLY. The Company recommends that each person granted an option under
either of the Plan (hereinafter an "Optionee") consult with his personal tax
advisor with respect to the specific tax aspects of option grants, exercises and
subsequent dispositions of shares acquired on option exercises.
The Plans is not a "qualified" stock bonus, pension or profit-sharing plan
within the meaning of Section 401 of the Code, nor will any of the options to be
granted under the Plans constitute a "qualified stock option" within the meaning
of Section 422(b) of the Code.
The Company will designate, at the time of an option grant, whether an
option granted under the Plan will be a non-ISO or an ISO.
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<PAGE>
NON-INCENTIVE STOCK OPTIONS. In general, the federal income tax
consequences of any Plan option which is not an ISO are as follows: The
Optionee is not considered to have received taxable compensation upon the grant
of the option nor is the Company or employing subsidiary then entitled to any
deduction for compensation attributable to the option. On exercise of the
option, the Optionee is deemed to receive compensation includable in his gross
income for tax purposes and the employing company is entitled to a corresponding
deduction (assuming the compensation is reasonable in amount and the employing
company satisfies its obligation to withhold income taxes), each in an amount
equal to the difference between the option exercise price and the fair market
value, at the date of option exercise, of the shares purchased on such exercise.
Any difference between the fair market value of the option shares at the date of
option exercise and the price at which the Optionee subsequently sells or
otherwise disposes of the shares in a disposition which is a sale or exchange is
treated as a capital gain or loss (assuming the shares are a capital asset in
the Optionee's hands).
INCENTIVE STOCK OPTIONS. With respect to options which are designated by
the Company as ISO's, the Plan provides that the aggregate fair market value
(determined at the time of option grant) of stock with respect to which ISO's
become exercisable by the Optionee for the first time in any calendar year under
all of the Company's stock option plans cannot exceed $100,000. ISO tax
treatment is denied by the Code to any options in excess of this dollar limit.
In general, the federal income tax consequences to the Optionee of the
grant and exercise of an ISO and the resale of stock purchased on the exercise
of an ISO are as follows: The granting of an ISO results in no federal income
tax consequences to the Optionee. No income is recognized by the Optionee upon
the exercise of an ISO. However, for purposes of the alternative minimum tax
only, stock acquired pursuant to the exercise of an ISO will be subject to the
rules applicable to non-ISO's. Thus, in general, the amount by which the fair
market value of the option shares at the time of ISO exercise exceeds the option
exercise price (the "Option Spread") will be an item of adjustment for purposes
of the federal alternative minimum tax and thus the Option Spread may be subject
to the alternative minimum tax. If the Optionee is subject to the alternative
minimum tax in the year of the option exercise, the shares purchased upon the
exercise of the ISO will generally have a tax basis equal to their fair market
value at the time of ISO exercise only for purposes of computing gain or loss on
a subsequent disposition of the option shares under the alternative minimum tax.
If the Option Shares are sold in the same taxable year as the option exercise,
the maximum amount that will be included in income for alternative maximum tax
purposes will be the gain on the sale of the shares. If instead the Optionee is
subject to the regular tax in the year of the disposition of his option shares,
the shares purchased upon the exercise of an ISO will have a tax basis (for
purposes of calculating gain or loss on such disposition under the
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<PAGE>
regular tax) equal to their ISO exercise price. Each Optionee should consult
his tax advisor as to the application of the alternative minimum tax to the
exercise of ISO's and the disposition of shares acquired thereby.
If the shares purchased upon the exercise of an ISO are disposed of by the
Optionee (other than by transfer to his estate, executor, administrator or heir
by reason of his death), neither
(a) within the two-year period following the grant of the option nor (b) within
the one-year period following the acquisition of the shares by the Optionee,
then upon such disposition, any excess of the sale price of the shares over the
option exercise price will constitute capital gain to the Optionee (assuming the
shares are a capital asset in his hands). If the Optionee sells the shares
within such two-year period or one-year period (other than by transfer to his
estate, executor, administrator or heir by reason of his death), the Optionee
will generally recognize ordinary income to the extent that his tax basis in the
shares is exceeded by the lesser of (i) the fair market value of the shares on
the date the option was exercised, and (ii) the amount realized on the
disposition of the shares, and the ordinary income will be added to the basis of
the option shares for purposes of determining gain or loss on the sale of the
option shares. If such sale occurs within the same taxable year as the option
exercise and such sale would result in a tax loss to the Optionee (after the
basis adjustment of the previous sentence), then the ordinary income to be
recognized by the Optionee with respect to the exercise of the Option will be
the excess (if any) of the amount realized on the sale over the basis of the
stock (prior to the basis adjustment of the previous sentence).
In general, the federal income tax consequences to the Company of the grant
and exercise of ISO's under the Plans and the resale of shares purchased on the
exercise of ISO's are as follows: The grant of an ISO results in no federal
income tax consequences to the Company. In any year in which the Optionee
recognizes ordinary income (as a result of a sale or other transfer of the
shares within the two-year period or one-year period referred to above), the
Company is entitled to a corresponding tax deduction assuming such compensation
to the Optionee is reasonable in amount.
STATE AND LOCAL TAX CONSEQUENCES.
State and local income tax consequences may, depending on the jurisdiction,
differ from the federal income tax consequences of the granting and exercise of
an option and any later sale by the Optionee of his option stock. There may
also be, again depending on the jurisdiction, transfer or other taxes imposed in
connection with a disposition, by sale, bequest or otherwise, of options and
option stock. Optionees should consult their personal tax advisors with respect
to the specific state, local and other tax effects on them of option grants,
exercises and stock dispositions.
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<PAGE>
RESTRICTIONS ON RESALE
Any purchaser of Common Stock who is an "control person" of the Company, as
defined in Rule 405 under the Securities Act of 1933, as amended, may only
reoffer or resell such shares pursuant to a separate prospectus under the
provisions of Rule 415 promulgated under such Act or under the provisions of
Rule 144 promulgated under such Act.
As discussed above under the caption "Federal Income Tax
Consequences-Incentive Stock Options," the resale of shares acquired upon the
exercise of ISO's within one year from the date of acquisition or two years from
the date of option grant may have certain adverse federal tax consequences.
Officers, Directors and beneficial owners of more than 10% of the Company's
Common Stock acquiring options pursuant to the Plan are subject to Section 16 of
the Securities Exchange Act of 1934, amended (the "34 Act"). Section 16(a) of
the 34 Act requires all officers, directors and beneficial owners of more than
ten percent of any class of the Company's equity securities to report on Forms
3, 4 and 5 to the Securities and Exchange Commission (the "Commission") all
changes in the ownership of any of the Company's equity securities that are held
by such individuals. This includes acquisitions and dispositions of shares of
Common Stock and stock options issued under the Plans to officers, directors and
greater-than ten percent beneficial owners of Common Stock. Any profit realized
by an officer, director or greater- than ten percent beneficial owner on any
acquisition and disposition, or any disposition and then acquisition, of shares
of Common Stock or stock options issued under the Plans, which occurs within a
six-month period is recoverable by the Company (or a stockholder suing on behalf
of the Company) under Section 16(b) of the Exchange Act.
FURTHER INFORMATION REGARDING THE PLAN/
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Additional information about the Plans and the administrators of the Plans
may be obtained from Vitafort International Corporation, Corporate Secretary,
1800 Avenue of the Stars - Suite 480, Los Angeles, California 90067. The
following documents filed by the Company with the Commission are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-KSB filed pursuant to
Section 13(a) or 15(d) of the Exchange Act that contains audited
financial statements for the Company's latest fiscal year for which
such statements have been filed and also contains a description of the
Company's Common Stock.
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<PAGE>
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the document
referred to in (a) above.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.
Copies of all documents incorporated by reference shall be made available
to plan participants without charge upon a written request addressed to
Corporate Secretary, Vitafort International Corporation, 1800 Avenue of the
Stars - Suite 480, Los Angeles, California 90067.
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<PAGE>
Exhibit 99.06
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement") is made and executed as of the
First day of January 1996, by and between VITAFORT INTERNATIONAL CORPORATION, a
Delaware corporation located at 1800 Avenue of the Stars, Suite 400, Los
Angeles, California, 90067("Company"), and JOFF POLLON of 2286 Betty Lane,
Beverly Hills, California 90210 ("Consultant"), and is made with respect to the
following facts:
A. Consultant represents that he possesses the knowledge and ability to
successfully assist the Company in its strategic planning, capitalization and
acquisition program.
B. The parties have entered into this Agreement for the purpose of setting
forth the terms of consultancy of Consultant by the Company.
C. Company and Consultant believe that it is in their mutual best interests to
enter into a consultant agreement pursuant to the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. SCOPE OF REPRESENTATION. Company grants Consultant permission to act
on Company's behalf in assisting Company in its strategic planning,
capitalization and acquisition program. Consultant's services shall be provided
on a non-exclusive basis. Consultant shall provide his services on a best
efforts basis.
2. CONSULTANT'S EXPENSES. Subject to prior approval of the Company,
Consultant shall provide his services at the Company's expense and at his own
place of business. Consultant agrees that at the expense and prior approval of
the Company, he may be required to travel to assist and advise the Company with
respect to his efforts on behalf of the Company.
3. INDEPENDENT CONTRACTOR; NO POWER TO BIND. Consultant is not an
employee of Company for any purpose whatsoever, but is an independent
contractor. Company is interested only in the results obtained by the
Consultant, who shall have, subject to the terms of this Agreement, sole control
of the manner and means of performing under this Agreement. Consultant does not
have the right or
<PAGE>
authority to create a contract or obligation either express or implied, on
behalf of, in the name of or binding upon Company, or to pledge Company's
credit, or to extend credit in the Company's name unless otherwise agreed in
writing. Consultant shall have no right or authority to commit Company in any
manner without the prior written consent of Company.
4. COMPENSATION.
(a) Fee.-- During the first TWO MONTHS of this Agreement,
Company shall pay a monthly fee of two thousand five hundred dollars ($2,500)
per month payable in full on or before the fifth day of each month. Company may
pay Consultant an additional fee or bonus at the sole and absolute discretion of
Company's Board of Directors.
(b) Option.-- Consultant shall be granted a one year option to
purchase shares of the Company in the amount of TWO HUNDRED THOUSAND SHARES
(200,000) at an excercise price of FIFTEEN CENTS ($.15) per share. The option
to purchase shares shall be registered under the Securities Act of 1933 or
pursuant to an exemption thereunder as soon as practicable but in no event later
than 90 days from the date of this agreement.
(c) Contingent Fee.-- Consultant shall receive a contingent fee for
materially assisting the Company in any transaction which is undertaken during
the term. The amount of the contingent fee shall be negotiated in good faith on
a case by case basis, may be paid in cash and registered securities and based
upon a "Lehman's Formula" (i.e. a fee of 5% of the first million dollars of
consideration paid or received pursuant to a transaction, 4% for the next
million dollars of the transaction, 3% for the next million, 2% for next million
and 1% for each million dollars thereafter).
5. TERM. This Agreement shall continue in full force and effect for a
period of SIX MONTHS from the date of this agreement; provided that the
provisions and agreements relating to confidentiality and non-circumvention
shall continue in full force and effect for a period of two (2) years from the
date of termination.
6. WARRANTIES AND REPRESENTATIONS. Consultants' advisory services are
provided on a best efforts basis and are based on his personal experience and
expertise. There are no guarantees, warranties or representations of any kind
that Consultant's advise or services will produce any specific results for the
benefit of the Company. Actual results may substantially and materially differ
from those suggested by Consultant. Consultant represents and warrants to
Company that (a) he is under no contractual restriction or other restrictions or
obligations that are inconsistent with the execution of this Agreement, the
performance of his duties and the covenants hereunder, and (b) he is under no
physical or mental disability that would interfere with his keeping and
performing all of the agreements, covenants and conditions to be kept or
performed hereunder.
7. NOTICE. Except as otherwise specifically provided, any notices to be given
hereunder shall be deemed given upon personal delivery, upon the next business
2
<PAGE>
day immediately following the day sent if sent by overnight express carrier, or
upon the third business day following the day sent if sent postage prepaid by
certified or registered mail, return receipt requested, to the following
addresses (or to such other address or addresses as shall be specified in any
notice given):
In case of Company: Vitafort International Corporation
1800 Avenue of the Stars, Suite 400
Los Angeles, Ca. 90067
Attn.: Mark Beychok
In case of Consultant: Joff Pollon
2286 Betty Lane
Beverly Hills, California
90210
8. WAIVER OF BREACH. The waiver by a party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of this Agreement.
9. ASSIGNMENT. Except as otherwise provided herein, the rights and benefits
of the parties contained in this Agreement shall inure to the benefit of and be
binding upon the successors, assigns, administrators, and personal
representatives of the parties hereto.
10. COMPLIANCE WITH LAW. During the Term, Consultant shall comply with all
laws and regulations applicable to Consultant in the conduct of his business.
11. INCORPORATION BY REFERENCE. The Confidentiality Agreement attached hereto
as an exhibit is incorporated herein by reference in its entirety.
12. ARBITRATION. Any controversy or claim arising out of or relating to
any interpretation, breach or dispute concerning any of the terms or provisions
of this Agreement, which disagreement is not settled within thirty days after it
arises, shall be settled by binding arbitration in Los Angeles California in
accordance with the laws of the State of California and under the rules then
obtaining of the American Arbitration Association and judgment upon the award
rendered in said arbitration shall be final and may be entered in any court of
the State of California having jurisdiction thereof. Any party hereto may apply
for such arbitration. The parties incorporate the provisions of California Code
of Civil Procedure, Sections 1283.05 and 1283.1 (relating to discovery) into
this agreement and make those provisions a part of and applicable to any
proceedings, including arbitration arising under the terms of this Agreement.
13. ATTORNEYS FEES. In the event that an action at law or in equity is
brought to enforce the provisions of this Agreement or to prevent a breach
thereof, the successful party in such action or arbitration proceeding shall be
entitled to an award
3
<PAGE>
of attorney's fees and other costs as shall be established by the court or
pursuant to a binding arbitration proceeding.
14. HOLD HARMLESS & INDEMNIFICATION.-- The Company shall hold Consultant
harmless from and against and shall indemnify the other for any liability, loss,
cost, expenses or damages howsoever caused by reason of any injury or loss
sustained by or to any person or property by reason of any alleged wrongful act,
misrepresentation or omission and it shall pay all sums to be paid or discharged
in case of any action or any such damages or injuries relating to the subject
matter of this Agreement or services or obligations rendered hereunder.
15. APPLICABLE LAW. This Agreement shall be construed as a whole and in
accordance with its fair meaning. This Agreement shall be interpreted in
accordance with the laws of the State of California.
16. ENTIRE AGREEMENT. This Agreement, together with the documents and exhibits
referred to herein, embodies the entire understanding among the parties and
merges all prior discussions or communications among them, and no party shall be
bound by any definitions, conditions, warranties, or representations other than
as expressly stated in this Agreement, or as subsequently set forth in writing,
signed by the duly authorized representatives of all of the parties hereto.
17. NO ORAL CHANGE; WAIVER. This Agreement may only be changed, modified, or
amended in writing by the mutual consent of the parties hereto. The provisions
of this Agreement may only be waived in or by a writing signed by the party
against whom enforcement of any waiver is sought.
18. CONFLICT OF INTEREST. Company acknowledges that, in the course of
Consultant's non-exclusive services and the term, Consultant may now or in the
future have certain potential or actual conflicts of interest. Any such actual
or potential conflicts are hereby waived.
19. SEVERABILITY. If any provision of this Agreement shall be held or deemed
to be, or shall in fact be, inoperative or unenforceable as applied in any
particular case because it conflicts with any other provision or provisions
hereof, or any constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable to any extent whatsoever.
The invalidity of any one or more phrases, sentences, clauses, sections or
subsections of this Agreement shall not affect the remaining portions of this
Agreement.
20. INTERPRETATION. Each of the parties acknowledge that it has been
represented by independent counsel of its choice throughout all negotiations
that have preceded the execution of this Agreement, and that it has executed the
same with consent and upon the advice of said independent counsel. Each party
and its counsel cooperated in the drafting and preparation of this Agreement and
the documents referred to
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<PAGE>
herein, and any and all drafts relating thereto shall be deemed the work product
of the parties and may not be construed against any party by reason of its
preparation. Accordingly, any rule of law, including but not limited to any
decision that would require interpretation of any ambiguities in this Agreement
against the party that drafted it, is of no application and is hereby expressly
waived. The provisions of this Agreement shall be construed as a whole and in
accordance with its fair meaning to affect the intentions of the parties and
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
COMPANY: VITAFORT INTERNATIONAL CORPORATION
By /s/ Mark Beychok
----------------
MARK BEYCHOK
CONSULTANT: JOFF POLLON
/s/ Joff Pollon
----------------
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<PAGE>
EXHIBIT 99.07
EXCEPT AS PERMITTED BY SECTION 8 HEREOF, NO TRANSFER SHALL BE MADE AT
ANY TIME UNLESS THE COMPANY SHALL HAVE BEEN SUPPLIED WITH EVIDENCE
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
VITAFORT INTERNATIONAL CORPORATION
______________________
OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF JANUARY 6, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: Joff Pollon
ADDRESS: 2286 Betty Lane
Beverly Hills, CA
90210
or registered assigns (the "Holder") are entitled, subject to the terms set
forth herein and in the Consulting Contract between Mr. Pollon and Vitafort
executed in January, 1996 (incorporated by reference), to purchase from Vitafort
International Corporation (the "Company"), a Delaware corporation, having its
offices at Suite 480, 1800 Avenue of the Stars, Los Angeles, California 90067,
up to TWO HUNDRED Thousand (200,000) shares of the Company's common stock
subject to adjustment as set forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock including Underlying Securities, as more fully
set forth in Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be "EXERCISE PRICE" Cents
($ .15) per share.
(c) "Underlying Securities" or "Underlying Shares"or "Underlying Stock"
shall refer to the Common Shares or other securities or property
issuable or issued upon exercise of this Option.
(d) The options vest based upon mutual agreement based upon assigned
projects and approved time & expenses.
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<PAGE>
2. (a) The purchase rights represented by this Option may be exercised by the
Holder hereof, in whole or in part (but not as to less than a whole
Common Share), at any time, and from time to time, during the period
commencing this date, until DECEMBER 31, 1997 (the "Expiration Date"),
by the presentation of this Option, with the purchase form attached
duly executed, at the Company's office (or such office or agency of
the Company as it may designate in writing to the Holder hereof by
notice pursuant to Section 14 hereof), specifying the number of Common
Shares as to which the Option is being exercised, and upon payment by
the Holder to the Company in cash or by certified check or bank draft,
in an amount equal to the Option Price times the number of Common
Shares then being purchased hereunder.
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on the
date on which this Option shall have been presented and payment made
for such Underlying Securities as aforesaid. Certificates for the
Underlying Securities so obtained shall be delivered to the Holder
hereof within a reasonable time, not exceeding seven (7) days, after
the rights represented by this Option shall have been so exercised.
If this Option shall be exercised in part only or transferred in part
subject to the provisions herein, the Company shall, upon surrender of
this Option for cancellation or partial transfer, deliver a new Option
evidencing the rights of the Holder hereof to purchase the balance of
the Underlying Shares which such Holder is entitled to purchase
hereunder. Exercise in full of the rights represented by this Option
shall not extinguish the rights granted under Section 9 hereof.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Common Shares as
are purchasable hereunder; and (ii) this Option may be divided or combined
with other Options which carry the same rights, in either case, upon
presentation hereof at the aforesaid office of the Company together with a
written notice, signed by the Holder hereof, specifying the names and
denominations in which new Options are to be issued, and the payment of any
transfer tax due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option Price
and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, stock dividend, or
split-up thereof or other means, the number of Common Shares subject
to this Option immediately prior to such subdivision shall be
proportionately increased and the Option Price shall be
proportionately decreased, and if the Company shall at any time
combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof or other means, the number of
Common Shares subject to this Option immediately prior to such
combination shall be proportionately decreased and the Option Price
shall be proportionately increased. Any such adjustment and
adjustment to the Option Price shall become effective at the close of
business on the record date for such subdivision or combination.
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(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not limited
to Common Shares, or other assets (other than a cash distribution made
as a dividend payable out of earnings or out of any earned surplus
legally available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Option Price and the
type and/or number of Underlying Securities in effect immediately
prior to the record date of such distribution as may be necessary to
preserve to the Holder of this Option rights substantially
proportionate to and economically equivalent to those enjoyed
hereunder by such Holder immediately prior to the happening of such
distribution. Any such adjustment made reasonably and in good faith
by the Board of Directors shall be final and binding upon the Holders
and shall become effective as of the record date for such
distribution.
(c) No adjustment in the number of Common Shares subject to this Option or
the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of
shares of at least 1% of the then adjusted number of Common Shares
issuable upon exercise of the Option, provided, however, that any
adjustments which by reason of the foregoing are not required at the
time to be made shall be carried forward and taken into account and
included in determining the amount of any subsequent adjustment. If
the Company shall make a record of the Holders of its Common Shares
for the purpose of entitling them to receive any dividend or
distribution and legally abandon its plan to pay or deliver such
dividend or distribution then no adjustment in the number of Common
Shares subject to the Option shall be required by reason of the making
of such record.
(d) In case of any capital reorganization or reclassification or change of
the outstanding Common Shares (exclusive of a change covered by
Section 4(a) hereof or which solely affects the par value of such
Common Shares) or in the case of any merger or consolidation of the
Company with or into another corporation (other than a consolidation
or merger in which the Company is the continuing corporation and which
does not result in any reclassification, change, capital
reorganization or change in the ownership of the outstanding Common
Shares), or in the case of any sale or conveyance or transfer of all
or substantially all of the property of the Company and in connection
with which the Company is dissolved, the Holder of this Option shall
have the right thereafter (until the expiration of the right of
exercise of this Option) to receive upon the exercise hereof, for the
same aggregate Option Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities
or property receivable upon such reclassification, change, capital
reorganization, merger or consolidation, or upon the dissolution
following any sale or other transfer, by a holder of the number of
Common Shares of the Company equal to the number of common shares
obtainable upon exercise of this Option immediately prior to such
event; and if any reorganization, reclassification, change, merger,
consolidation, sale or transfer also results in a change in Common
Shares covered by Section 4(a), then such adjustment shall be made
pursuant to both this Section 4(d) and Section 4(a). The provisions
of this Section 4(d) shall similarly apply to successive
reclassification, or capital reorganizations, mergers or
consolidations, changes, sales or other transfers.
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<PAGE>
(e) The Company shall not be required to issue fractional Common Shares
upon any exercise of this Option. As to any final fraction of a
Common Share which the Holder of this Option would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the
same fraction of the market value of a share of such stock on the
business day preceding the day of exercise or book value as determined
by the Company's independent public accountants if not publicly
traded. The Holder of this Option, by his acceptance hereof,
expressly waives any right to receive any fractional shares of stock
upon exercise of this Option.
(f) As used herein, the current market price ("Market Price") per share at
any date shall be the price of Common Shares on the business day
immediately preceding the event requiring an adjustment hereunder and
shall be (A) if the principal trading market for such securities is an
exchange, the closing price on such exchange on such day provided if
trading of such Common Shares is listed on any consolidated tape, the
price shall be the closing price set forth on such consolidated tape
or (B) if the principal market for such securities is the over-the-
counter market, the high bid price on such date as set forth by NASDAQ
or closing price if listed on NASDAQ NMS or, if the security is not
quoted on NASDAQ, the high bid price as set forth in the NATIONAL
QUOTATION BUREAU sheet listing such securities for such day.
Notwithstanding the foregoing, if there is no reported closing price
or high bid price, as the case may be, on a date prior to the event
requiring an adjustment hereunder, then the current market price shall
be determined as of the latest date prior to such day for which such
closing price or high bid price is available.
(g) Irrespective of any adjustments pursuant to this Section 4 in the
Option Price or in the number, or kind, or class of shares or other
securities or other property obtainable upon exercise of this Option,
and without impairing any such adjustment the certificate representing
this Option may continue to express the Option Price and the number of
Common Shares obtainable upon exercise at the same price and number of
Common Shares as are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the Option
Price shall be determined exclusively pursuant to the provisions
hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number of
Underlying Securities purchasable and the price per share upon
exercise of this Option and shall set forth in reasonable detail the
events which resulted in such adjustment.
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<PAGE>
5. For the purposes of this Option, the terms "Common Shares" or "Common
Stock" shall mean (i) the class of stock designated as the common stock of
the Company on the date set forth on the first page hereof or (ii) any
other class of stock resulting from successive changes or reclassification
of such Common Stock consisting solely of changes from par value to no par
value, or from no par value to par value or changes in par value. If at
any time, as a result of an adjustment made pursuant to Section 4, the
securities or other property obtainable upon exercise of this Option shall
include shares or other securities of another corporation or other
property, then thereafter, the number of such other shares or other
securities or property so obtainable shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Shares contained in Section 4,
and all other provisions of this Option with respect to Common Shares shall
apply on like terms to any such other shares or other securities or
property. Subject to the foregoing, and unless the context requires
otherwise, all references herein to Common Shares shall, in the event of an
adjustment pursuant to Section 4, be deemed to refer also to any other
shares or other securities or property when obtainable as a result of such
adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this Option
may be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the purposes
of issuance upon exercise of this Option, such number of its Common
Shares as shall be issuable upon the exercise of this Option and at
its expense will obtain the listing thereof on all quotation systems
or national securities exchanges on which the Common Shares are then
listed; and if at any time the number of authorized Common Shares
shall not be sufficient to effect the exercise of this Option, the
Company will take such corporate action as may be necessary to
increase its authorized but unissued Common Shares to such number of
shares as shall be sufficient for such purpose; the Company shall have
analogous obligations with respect to any other securities or property
issuable upon exercise of this Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued,
fully paid, non-assessable and free from all taxes, liens and charges
with respect to the issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of Common
Shares upon the exercise of the rights represented by this Option
shall be borne by the Company, but in no event shall the Company be
responsible or liable for income taxes or transfer taxes upon the
transfer of any Options.
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<PAGE>
7. The Company may issue a call of this Warrant ("Call Notice") at any time
after the Effective Registration Date, but prior to the expiration of this
Warrant, by written notice to Warrant Holder, provided only that the
Closing Price (hereinafter defined) of the Company's Common Stock has
theretofore equalled or exceeded Forty-five Cents ($0.45) per Share for ten
(10) consecutive Trading Days after the Effective Registration Date. This
Warrant shall expire and become null and void thirty (30) days after the
issuance of the Call Notice. The Warrant Holder may exercise this Warrant
and purchase some or all of the Shares then subject to this Warrant within
said thirty (30)-day period, but may not thereafter exercise this Option or
purchase any of the Shares. If the Warrant is not exercised within said
thirty (30) day period, the Company will have the right to redeem any or
all outstanding and unexercised Options at a redemption price of $0.0001
per Warrant. For purposes of this Section 7.3, "Closing Price" means (a)
if the Common Stock is then listed on an established stock exchange or
exchanges, the average bid and ask price per share for each Trading Day on
the principal exchange on which the Common Stock is traded, as reported in
The Wall Street Journal; or (b) if the Common Stock is not then listed on
an exchange, the price per share for the Common Stock in the over-the-
counter market as quoted on NASDAQ (either National Market System or Small
Cap Issues or the OTC Electronic Bulletin Board), for each Trading Day, as
reported in The Wall Street Journal. If the Common Stock is not then
listed on an exchange or quoted on NASDAQ or the OTC Electronic Bulletin
Board, the Common Stock shall be deemed to have a Closing Price of less
Forty-five Cents ($0.45) per share on such Trading Day. For purposes of
this Section 7.3, the term "Trading Day" shall mean a day on which the New
York Stock Exchange is open for trading.
8. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
9. No transfer of all or a portion of the Option or Underlying Securities
shall be made at any time unless the Company shall have been supplied with
evidence reasonably satisfactory to it that such transfer is not in
violation of the Securities Act of 1933, as amended (the "Act"). Subject to
the satisfaction of the aforesaid condition and upon surrender of this
Option or certificates for any Underlying Securities at the office of the
Company, the Company shall deliver a new Option or Options or new
certificate or certificates for Underlying Securities to and in the name of
the assignee or assignees named therein. Any such certificate may bear a
legend reflecting the restrictions on transfer set forth herein.
10. If this Option is lost, stolen, mutilated or destroyed, the Company shall,
on such terms as to indemnity or otherwise as the Company may reasonably
impose, issue a new Option of like denomination, tenor and date. Any such
new Option shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Option shall be at any time enforceable by anyone.
11. Any Option issued pursuant to the provisions of Section 9 hereof, or upon
transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option or Options, shall set forth each
provision set forth in Sections 1 through 15, inclusive, of this Option as
each such provision is set forth herein, and shall be duly executed on
behalf of the Company by its chief executive officer or chief operating
officer.
-6-
<PAGE>
12. Upon surrender of this Option for transfer or exchange or upon the exercise
hereof, this Option shall be cancelled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of a
partial exercise, Section 3 in case of an exchange or Section 8 in case of
a transfer, or Section 9 in case of mutilation. Any new Option certificate
shall be issued promptly but not later than fifteen (15) days after receipt
of the old Option certificate.
13. This Option shall inure to the benefit of and be binding upon the Holder
hereof, the Company and their respective successors, heirs, executors,
legal representatives and assigns.
14. All notices required hereunder shall be in writing and shall be deemed
given when telegraphed, delivered personally or within two (2) days after
mailing when mailed by certified or registered mail, return receipt
requested, to the party to whom such notice is intended, at the address of
such other party as set forth on the first page hereof, or at such other
address of which the Company or Holder has been advised by the notice
hereunder.
15. In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Holders shall be enforceable to the fullest extent permitted by law.
16. The validity, interpretation and performance of this Option and of the
terms and provisions hereof shall be governed by the laws of the State of
California applicable to agreements entered into and performed entirely in
such state.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of JANUARY 6, 1996.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
----------------------------------
Mark Beychok, Chief Executive Officer
-7-
<PAGE>
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably elects to
exercise the right to purchase __________ Common Shares evidenced by the within
Option, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set forth
below.
_______________, 19__
---------------------------------------
Signature
---------------------------------------
Print Name of Signatory
---------------------------------------
Name to whom certificates are to be issued if different from above
---------------------------------------
(Street Address)
---------------------------------------
(City, State Zipcode)
---------------------------------------
(Tax Payer I.D. Number)
If said number of shares and warrants shall not be all the shares purchasable
under the within Option, the undersigned requests that a new Option for the
unexercised portion shall be registered in the name of:
---------------------------------------
(Please Print)
---------------------------------------
(Street Address)
---------------------------------------
(City, State Zipcode)
---------------------------------------
(Tax Payer I.D. Number)
---------------------------------------
Signature
---------------------------------------
Print Name of Signatory
-8-
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED _______________________, hereby sells, assigns and transfers
to ______________________,(Social Security or I.D. No.______________________)
the within Option, or that portion of this Option purchasable for _______ common
shares together with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint ___________________________________ attorney
to transfer such Option on the register of the within named Company, with full
power of substitution.
---------------------------------------
(Signature)
Dated: ___________, 19__
Signature Guaranteed:
---------------------------------------
(INTENTIONALLY BLANK)
-9-
<PAGE>
EXHIBIT 99.08
[VITAFORT - Letterhead]
November 8, 1995
John M. O'Neil
322 West 57th Street
Apartment 35K
New York, NY 10019
Re: Vitafort International Corporation
Dear John,
Please accept this letter as confirmation of our telephone discussions
today. Specifically, Vitafort would like to thank you for your timely advice
and counsel over the last several weekends relative to our product marketing
strategies,. We found your input especially helpful in fine tuning the
positioning of our new product lines in order to maximize their appeal to both
the consumer and the grocer. While we at Vitafort are, obviously, very excited
about our new product offerings, it was invaluable to receive clear and direct
constructive criticism of our approach to the marketplace.
As we discussed, we all believe that the grant of 2 year options to
purchase 250,000 shares of Vitafort common stock at today's market price ($0.14
per share) in lieu any cash payment for your past services is preferred by all
concerned. This proposal will be submitted to the Board of Directors of
Vitafort International Corporation for ratification. Upon ratification, we will
have our lawyer draft the appropriate documents.
We also agree that it would be helpful in the long term for you to have a
clear understanding of company and its progress in the marketplace. In order to
accelerate your understanding of our company, and assuming you'll return a
signed copy of enclosed Confidentiality Agreement, we have also enclosed our
financial forecast, a DRAFT copy of our 3rd quarter 10-Q, as well as the rest of
this years 10-K & Q's.
We look forward to your expert assistance in building Vitafort to its true
potential. Please feel free to call directly if you have any questions.
Sincerely,
/s/ Mark Beychok
Mark Beychok
President & CEO
<PAGE>
EXHIBIT 99.09
EXCEPT AS PERMITTED BY SECTION 8 HEREOF, NO TRANSFER SHALL BE MADE AT
ANY TIME UNLESS THE COMPANY SHALL HAVE BEEN SUPPLIED WITH EVIDENCE
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
VITAFORT INTERNATIONAL CORPORATION
______________________
OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF DECEMBER 18, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: JOHN O'NEIL
ADDRESS: 322 WEST 57TH STREET, APARTMENT 35K
NEW YORK, NY 10019
or registered assigns (the "Holder") are entitled, subject to the terms set
forth herein, to purchase from Vitafort International Corporation (the
"Company"), a Delaware corporation, having its offices at Suite 480, 1800 Avenue
of the Stars, Los Angeles, California 90067, up to TWO HUNDRED FIFTY Thousand
(250,000) shares of the Company's common stock subject to adjustment as set
forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock including Underlying Securities, as more fully
set forth in Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be "EXERCISE PRICE" Cents
($.14) per share.
(c) "Underlying Securities" or "Underlying Shares" or "Underlying Stock"
shall refer to the Common Shares or other securities or property
issuable or issued upon exercise of this Option.
(d) "Effect Registration Date" shall be the date the registration of the
Underlying Shares is declared effective by the Securities Exchange
Commission. The Underlying Shares for this option will be included in
the first S-3 or S-1 type registration submitted by the coming
following the date of execution of this Option.
-1-
<PAGE>
2. (a) The purchase rights represented by this Option may be exercised by the
Holder hereof, in whole or in part (but not as to less than a whole
Common Share), at any time, and from time to time, during the
period commencing this date, until NOVEMBER 8, 1997 (the
"Expiration Date"), by the presentation of this Option, with the
purchase form attached duly executed, at the Company's office (or
such office or agency of the Company as it may designate in writing
to the Holder hereof by notice pursuant to Section 14 hereof),
specifying the number of Common Shares as to which the Option is
being exercised, and upon payment by the Holder to the Company in
cash or by certified check or bank draft, in an amount equal to the
Option Price times the number of Common Shares then being purchased
hereunder.
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on
the date on which this Option shall have been presented and payment
made for such Underlying Securities as aforesaid. Certificates for
the Underlying Securities so obtained shall be delivered to the
Holder hereof within a reasonable time, not exceeding seven (7)
days, after the rights represented by this Option shall have been
so exercised. If this Option shall be exercised in part only or
transferred in part subject to the provisions herein, the Company
shall, upon surrender of this Option for cancellation or partial
transfer, deliver a new Option evidencing the rights of the Holder
hereof to purchase the balance of the Underlying Shares which such
Holder is entitled to purchase hereunder. Exercise in full of the
rights represented by this Option shall not extinguish the rights
granted under Section 9 hereof.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Common Shares as are
purchasable hereunder; and (ii) this Option may be divided or combined with
other Options which carry the same rights, in either case, upon presentation
hereof at the aforesaid office of the Company together with a written
notice, signed by the Holder hereof, specifying the names and denominations
in which new Options are to be issued, and the payment of any transfer tax
due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option Price
and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, stock dividend, or
split-up thereof or other means, the number of Common Shares
subject to this Option immediately prior to such subdivision shall
be proportionately increased and the Option Price shall be
proportionately decreased, and if the Company shall at any time
combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof or other means, the number
of Common Shares subject to this Option immediately prior to such
combination shall be proportionately decreased and the Option Price
shall be proportionately increased. Any such adjustment and
adjustment to the Option Price shall become effective at the close
of business on the record date for such subdivision or combination.
-2-
<PAGE>
(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not
limited to Common Shares, or other assets (other than a cash
distribution made as a dividend payable out of earnings or out of
any earned surplus legally available for dividends under the laws
of the jurisdiction of incorporation of the Company), the Board of
Directors shall be required to make such equitable adjustment in
the Option Price and the type and/or number of Underlying
Securities in effect immediately prior to the record date of such
distribution as may be necessary to preserve to the Holder of this
Option rights substantially proportionate to and economically
equivalent to those enjoyed hereunder by such Holder immediately
prior to the happening of such distribution. Any such adjustment
made reasonably and in good faith by the Board of Directors shall
be final and binding upon the Holders and shall become effective as
of the record date for such distribution.
(c) No adjustment in the number of Common Shares subject to this Option or
the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of
shares of at least 1% of the then adjusted number of Common Shares
issuable upon exercise of the Option, provided, however, that any
adjustments which by reason of the foregoing are not required at
the time to be made shall be carried forward and taken into account
and included in determining the amount of any subsequent
adjustment. If the Company shall make a record of the Holders of
its Common Shares for the purpose of entitling them to receive any
dividend or distribution and legally abandon its plan to pay or
deliver such dividend or distribution then no adjustment in the
number of Common Shares subject to the Option shall be required by
reason of the making of such record.
(d) In case of any capital reorganization or reclassification or change of
the outstanding Common Shares (exclusive of a change covered by
Section 4(a) hereof or which solely affects the par value of such
Common Shares) or in the case of any merger or consolidation of the
Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification,
change, capital reorganization or change in the ownership of the
outstanding Common Shares), or in the case of any sale or
conveyance or transfer of all or substantially all of the property
of the Company and in connection with which the Company is
dissolved, the Holder of this Option shall have the right
thereafter (until the expiration of the right of exercise of this
Option) to receive upon the exercise hereof, for the same aggregate
Option Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property
receivable upon such reclassification, change, capital
reorganization, merger or consolidation, or upon the dissolution
following any sale or other transfer, by a holder of the number of
Common Shares of the Company equal to the number of common shares
obtainable upon exercise of this Option immediately prior to such
event; and if any reorganization, reclassification, change, merger,
consolidation, sale or transfer also results in a change in Common
Shares covered by Section 4(a), then such adjustment shall be made
pursuant to both this Section 4(d) and Section 4(a). The
provisions of this Section 4(d) shall similarly apply to successive
reclassification, or capital reorganizations, mergers or
consolidations, changes, sales or other transfers.
-3-
<PAGE>
(e) The Company shall not be required to issue fractional Common Shares
upon any exercise of this Option. As to any final fraction of a
Common Share which the Holder of this Option would otherwise be
entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount
equal to the same fraction of the market value of a share of such
stock on the business day preceding the day of exercise or book
value as determined by the Company's independent public accountants
if not publicly traded. The Holder of this Option, by his
acceptance hereof, expressly waives any right to receive any
fractional shares of stock upon exercise of this Option.
(f) As used herein, the current market price ("Market Price") per share at
any date shall be the price of Common Shares on the business day
immediately preceding the event requiring an adjustment hereunder
and shall be (A) if the principal trading market for such
securities is an exchange, the closing price on such exchange on
such day provided if trading of such Common Shares is listed on any
consolidated tape, the price shall be the closing price set forth
on such consolidated tape or (B) if the principal market for such
securities is the over-the-counter market, the high bid price on
such date as set forth by NASDAQ or closing price if listed on
NASDAQ NMS or, if the security is not quoted on NASDAQ, the high
bid price as set forth in the NATIONAL QUOTATION BUREAU sheet
listing such securities for such day. Notwithstanding the
foregoing, if there is no reported closing price or high bid price,
as the case may be, on a date prior to the event requiring an
adjustment hereunder, then the current market price shall be
determined as of the latest date prior to such day for which such
closing price or high bid price is available.
(g) Irrespective of any adjustments pursuant to this Section 4 in the
Option Price or in the number, or kind, or class of shares or other
securities or other property obtainable upon exercise of this
Option, and without impairing any such adjustment the certificate
representing this Option may continue to express the Option Price
and the number of Common Shares obtainable upon exercise at the
same price and number of Common Shares as are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the Option
Price shall be determined exclusively pursuant to the provisions
hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number of
Underlying Securities purchasable and the price per share upon
exercise of this Option and shall set forth in reasonable detail the
events which resulted in such adjustment.
5. For the purposes of this Option, the terms "Common Shares" or "Common Stock"
shall mean (i) the class of stock designated as the common stock of the
Company on the date set forth on the first page hereof or (ii) any other
class of stock resulting from successive changes or reclassification of
such Common Stock consisting solely of changes from par value to no par
value, or from no par value to par value or changes in par value. If at
any time, as a result of an adjustment made pursuant to Section 4, the
securities or other property obtainable upon exercise of this Option
shall include shares or other securities of another corporation or
other property, then thereafter, the number of such other shares or
other securities or property so obtainable shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as
-4-
<PAGE>
practicable to the provisions with respect to the Common Shares
contained in Section 4, and all other provisions of this Option with
respect to Common Shares shall apply on like terms to any such other
shares or other securities or property. Subject to the foregoing, and
unless the context requires otherwise, all references herein to Common
Shares shall, in the event of an adjustment pursuant to Section 4, be
deemed to refer also to any other shares or other securities or property
when obtainable as a result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this Option
may be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the
purposes of issuance upon exercise of this Option, such number of
its Common Shares as shall be issuable upon the exercise of this
Option and at its expense will obtain the listing thereof on all
quotation systems or national securities exchanges on which the
Common Shares are then listed; and if at any time the number of
authorized Common Shares shall not be sufficient to effect the
exercise of this Option, the Company will take such corporate
action as may be necessary to increase its authorized but unissued
Common Shares to such number of shares as shall be sufficient for
such purpose; the Company shall have analogous obligations with
respect to any other securities or property issuable upon exercise
of this Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued,
fully paid, non-assessable and free from all taxes, liens and
charges with respect to the issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of Common
Shares upon the exercise of the rights represented by this Option
shall be borne by the Company, but in no event shall the Company be
responsible or liable for income taxes or transfer taxes upon the
transfer of any Options.
7. The Company may issue a call of this Warrant ("Call Notice") at any time
after the Effective Registration Date, but prior to the expiration of
this Warrant, by written notice to Warrant Holder, provided only that
the Closing Price (hereinafter defined) of the Company's Common Stock
has theretofore equalled or exceeded FIFTY TWO CENTS ($0.52) per Share
for ten (10) consecutive Trading Days after the Effective Registration
Date. This Warrant shall expire and become null and void thirty (30)
days after the issuance of the Call Notice. The Warrant Holder may
exercise this Warrant and purchase some or all of the Shares then
subject to this Warrant within said thirty (30)-day period, but may not
thereafter exercise this Option or purchase any of the Shares. If the
Warrant is not exercised within said thirty (30) day period, the Company
will have the right to redeem any or all outstanding and unexercised
Options at a redemption price of $0.0001 per Warrant. For purposes of
this Section 7.3, "Closing Price" means (a) if the Common Stock is then
listed on an established stock exchange or exchanges, the average bid
and ask price per share for each Trading Day on the principal exchange
on which the Common Stock is traded, as reported in The Wall Street
Journal; or (b) if the Common Stock is not then listed on an exchange,
the price per share for the Common Stock in the over-the-counter market
as quoted on NASDAQ (either National Market System or Small Cap Issues
or the OTC Electronic Bulletin Board), for each Trading Day, as reported
in The Wall Street Journal. If the Common Stock is not then listed on
an exchange or quoted on NASDAQ or the OTC Electronic Bulletin Board, the
-5-
<PAGE>
Common Stock shall be deemed to have a Closing Price of less than
FIFTY TWO CENTS ($0.52) per share on such Trading Day. For purposes of
this Section 7.3, the term "Trading Day" shall mean a day on which the
New York Stock Exchange is open for trading.
8. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
9. No transfer of all or a portion of the Option or Underlying Securities
shall be made at any time unless the Company shall have been supplied
with evidence reasonably satisfactory to it that such transfer is not in
violation of the Securities Act of 1933, as amended (the "Act"). Subject
to the satisfaction of the aforesaid condition and upon surrender of
this Option or certificates for any Underlying Securities at the office
of the Company, the Company shall deliver a new Option or Options or new
certificate or certificates for Underlying Securities to and in the name
of the assignee or assignees named therein. Any such certificate may
bear a legend reflecting the restrictions on transfer set forth herein.
10. If this Option is lost, stolen, mutilated or destroyed, the Company shall,
on such terms as to indemnity or otherwise as the Company may reasonably
impose, issue a new Option of like denomination, tenor and date. Any
such new Option shall constitute an original contractual obligation of
the Company, whether or not the allegedly lost, stolen, mutilated or
destroyed Option shall be at any time enforceable by anyone.
11. Any Option issued pursuant to the provisions of Section 9 hereof, or upon
transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option or Options, shall set forth each
provision set forth in Sections 1 through 15, inclusive, of this Option
as each such provision is set forth herein, and shall be duly executed
on behalf of the Company by its chief executive officer or chief
operating officer.
12. Upon surrender of this Option for transfer or exchange or upon the exercise
hereof, this Option shall be cancelled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of
a partial exercise, Section 3 in case of an exchange or Section 8 in
case of a transfer, or Section 9 in case of mutilation. Any new Option
certificate shall be issued promptly but not later than fifteen (15)
days after receipt of the old Option certificate.
13. This Option shall inure to the benefit of and be binding upon the Holder
hereof, the Company and their respective successors, heirs, executors,
legal representatives and assigns.
14. All notices required hereunder shall be in writing and shall be deemed given
when telegraphed, delivered personally or within two (2) days after
mailing when mailed by certified or registered mail, return receipt
requested, to the party to whom such notice is intended, at the address
of such other party as set forth on the first page hereof, or at such
other address of which the Company or Holder has been advised by the
notice hereunder.
15. In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being
-6-
<PAGE>
intended that all of the rights and privileges of the
Holders shall be enforceable to the fullest extent permitted by law.
16. The validity, interpretation and performance of this Option and of the terms
and provisions hereof shall be governed by the laws of the State of
California applicable to agreements entered into and performed entirely in
such state.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of DECEMBER 18, 1995.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
--------------------------------------
Mark Beychok, Chief Executive Officer
<PAGE>
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably elects to
exercise the right to purchase ____________ Common Shares evidenced by the
within Option, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set forth
below.
____________, 19__
_______________________
Signature
_______________________
Print Name of Signatory
_______________________
Name to whom certificates are to be issued if different from above
_______________________
(Street Address)
_______________________
(City, State Zipcode)
_______________________
(Tax Payer I.D. Number)
If said number of shares and warrants shall not be all the shares purchasable
under the within Option, the undersigned requests that a new Option for the
unexercised portion shall be registered in the name of:
_______________________
(Please Print)
_______________________
(Street Address)
_______________________
(City, State Zipcode)
_______________________
(Tax Payer I.D. Number)
_______________________
Signature
_______________________
Print Name of Signatory
-8-
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED ___________________, hereby sells, assigns and transfers
to _______________________,(Social Security or I.D. No.____________) the
within Option, or that portion of this Option purchasable for _______ common
shares together with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint _________________________ attorney to
transfer such Option on the register of the within named Company, with full
power of substitution.
_______________________
(Signature)
Dated: _______, 19__
Signature Guaranteed:
_______________________
(INTENTIONALLY BLANK)
-9-
<PAGE>
EXHIBIT 99.10
[VITAFORT INTERNATIONAL CORPORATION letterhead]
December 16, 1995
Mr. Mark Beychok
Vitafort International Corp.
1800 Avenue of the Stars
Suite 480
Los Angeles, CA 90067
Dear Mark:
This will confirm that the Board has agreed to rewrite and update your
employment agreement in the near future. In recognition of your extraordinary
efforts, including, but not limited to: (i) deferring all of your salary for a
period of six months; (ii) your efforts to successfully bring new products to
market, we also confirm that your contract is amended to grant you an
additional 1,250,000 options at $.15 per share which options shall expire on
December 16, 2000 and shall be fully vested.
Very truly yours,
/s/ Sheldon Schrager
Sheldon Schrager
SS/ld
<PAGE>
EXHIBIT 99.11
EXCEPT AS PERMITTED BY SECTION 8 HEREOF, NO TRANSFER SHALL BE MADE AT
ANY TIME UNLESS THE COMPANY SHALL HAVE BEEN SUPPLIED WITH EVIDENCE
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
VITAFORT INTERNATIONAL CORPORATION
______________________
OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF DECEMBER 16, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: Mark Beychok
ADDRESS: 1800 Avenue of the Stars, Suite 480
Los Angeles, CA
90067
or registered assigns (the "Holder") are entitled, subject to the terms set
forth, to purchase from Vitafort International Corporation (the "Company"), a
Delaware corporation, having its offices at Suite 480, 1800 Avenue of the Stars,
Los Angeles, California 90067, up to ONE MILLION TWO HUNDRED FIFTY THOUSAND
(1,250,000) shares of the Company's common stock subject to adjustment as set
forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock including Underlying Securities, as more fully
set forth in Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be "EXERCISE PRICE" Cents
($ .15) per share.
(c) "Underlying Securities" or "Underlying Shares"or "Underlying Stock"
shall refer to the Common Shares or other securities or property
issuable or issued upon exercise of this Option.
-1-
<PAGE>
2. (a) The purchase rights represented by this Option may be exercised by the
Holder hereof, in whole or in part (but not as to less than a whole
Common Share), at any time, and from time to time, during the period
commencing this date, until DECEMBER 16, 2000 (the "Expiration Date"),
by the presentation of this Option, with the purchase form attached
duly executed, at the Company's office (or such office or agency of
the Company as it may designate in writing to the Holder hereof by
notice pursuant to Section 14 hereof), specifying the number of Common
Shares as to which the Option is being exercised, and upon payment by
the Holder to the Company in cash or by certified check or bank draft,
in an amount equal to the Option Price times the number of Common
Shares then being purchased hereunder.
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on the
date on which this Option shall have been presented and payment made
for such Underlying Securities as aforesaid. Certificates for the
Underlying Securities so obtained shall be delivered to the Holder
hereof within a reasonable time, not exceeding seven (7) days, after
the rights represented by this Option shall have been so exercised.
If this Option shall be exercised in part only or transferred in part
subject to the provisions herein, the Company shall, upon surrender of
this Option for cancellation or partial transfer, deliver a new Option
evidencing the rights of the Holder hereof to purchase the balance of
the Underlying Shares which such Holder is entitled to purchase
hereunder. Exercise in full of the rights represented by this Option
shall not extinguish the rights granted under Section 9 hereof.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Common Shares as
are purchasable hereunder; and (ii) this Option may be divided or combined
with other Options which carry the same rights, in either case, upon
presentation hereof at the aforesaid office of the Company together with a
written notice, signed by the Holder hereof, specifying the names and
denominations in which new Options are to be issued, and the payment of any
transfer tax due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option Price
and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, stock dividend, or
split-up thereof or other means, the number of Common Shares subject
to this Option immediately prior to such subdivision shall be
proportionately increased and the Option Price shall be
proportionately decreased, and if the Company shall at any time
combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof or other means, the number of
Common Shares subject to this Option immediately prior to such
combination shall be proportionately decreased and the Option Price
shall be proportionately increased. Any such adjustment and
adjustment to the Option Price shall become effective at the close of
business on the record date for such subdivision or combination.
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<PAGE>
(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not limited
to Common Shares, or other assets (other than a cash distribution made
as a dividend payable out of earnings or out of any earned surplus
legally available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be
required to make such equitable adjustment in the Option Price and the
type and/or number of Underlying Securities in effect immediately
prior to the record date of such distribution as may be necessary to
preserve to the Holder of this Option rights substantially
proportionate to and economically equivalent to those enjoyed
hereunder by such Holder immediately prior to the happening of such
distribution. Any such adjustment made reasonably and in good faith
by the Board of Directors shall be final and binding upon the Holders
and shall become effective as of the record date for such
distribution.
(c) No adjustment in the number of Common Shares subject to this Option or
the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of
shares of at least 1% of the then adjusted number of Common Shares
issuable upon exercise of the Option, provided, however, that any
adjustments which by reason of the foregoing are not required at the
time to be made shall be carried forward and taken into account and
included in determining the amount of any subsequent adjustment. If
the Company shall make a record of the Holders of its Common Shares
for the purpose of entitling them to receive any dividend or
distribution and legally abandon its plan to pay or deliver such
dividend or distribution then no adjustment in the number of Common
Shares subject to the Option shall be required by reason of the making
of such record.
(d) In case of any capital reorganization or reclassification or change of
the outstanding Common Shares (exclusive of a change covered by
Section 4(a) hereof or which solely affects the par value of such
Common Shares) or in the case of any merger or consolidation of the
Company with or into another corporation (other than a consolidation
or merger in which the Company is the continuing corporation and which
does not result in any reclassification, change, capital
reorganization or change in the ownership of the outstanding Common
Shares), or in the case of any sale or conveyance or transfer of all
or substantially all of the property of the Company and in connection
with which the Company is dissolved, the Holder of this Option shall
have the right thereafter (until the expiration of the right of
exercise of this Option) to receive upon the exercise hereof, for the
same aggregate Option Price payable hereunder immediately prior to
such event, the kind and amount of shares of stock or other securities
or property receivable upon such reclassification, change, capital
reorganization, merger or consolidation, or upon the dissolution
following any sale or other transfer, by a holder of the number of
Common Shares of the Company equal to the number of common shares
obtainable upon exercise of this Option immediately prior to such
event; and if any reorganization, reclassification, change, merger,
consolidation, sale or transfer also results in a change in Common
Shares covered by Section 4(a), then such adjustment shall be made
pursuant to both this Section 4(d) and Section 4(a). The provisions
of this Section 4(d) shall similarly apply to successive
reclassification, or capital reorganizations, mergers or
consolidations, changes, sales or other transfers.
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<PAGE>
(e) The Company shall not be required to issue fractional Common Shares
upon any exercise of this Option. As to any final fraction of a
Common Share which the Holder of this Option would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the
same fraction of the market value of a share of such stock on the
business day preceding the day of exercise or book value as determined
by the Company's independent public accountants if not publicly
traded. The Holder of this Option, by his acceptance hereof,
expressly waives any right to receive any fractional shares of stock
upon exercise of this Option.
(f) As used herein, the current market price ("Market Price") per share at
any date shall be the price of Common Shares on the business day
immediately preceding the event requiring an adjustment hereunder and
shall be (A) if the principal trading market for such securities is an
exchange, the closing price on such exchange on such day provided if
trading of such Common Shares is listed on any consolidated tape, the
price shall be the closing price set forth on such consolidated tape
or (B) if the principal market for such securities is the over-the-
counter market, the high bid price on such date as set forth by NASDAQ
or closing price if listed on NASDAQ NMS or, if the security is not
quoted on NASDAQ, the high bid price as set forth in the NATIONAL
QUOTATION BUREAU sheet listing such securities for such day.
Notwithstanding the foregoing, if there is no reported closing price
or high bid price, as the case may be, on a date prior to the event
requiring an adjustment hereunder, then the current market price shall
be determined as of the latest date prior to such day for which such
closing price or high bid price is available.
(g) Irrespective of any adjustments pursuant to this Section 4 in the
Option Price or in the number, or kind, or class of shares or other
securities or other property obtainable upon exercise of this Option,
and without impairing any such adjustment the certificate representing
this Option may continue to express the Option Price and the number of
Common Shares obtainable upon exercise at the same price and number of
Common Shares as are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the Option
Price shall be determined exclusively pursuant to the provisions
hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number of
Underlying Securities purchasable and the price per share upon
exercise of this Option and shall set forth in reasonable detail the
events which resulted in such adjustment.
5. For the purposes of this Option, the terms "Common Shares" or "Common
Stock" shall mean (i) the class of stock designated as the common stock of
the Company on the date set forth on the first page hereof or (ii) any
other class of stock resulting from successive changes or reclassification
of such Common Stock consisting solely of changes from par value to no par
value, or from no par value to par value or changes in par value. If at
any time, as a result of an adjustment made pursuant to Section 4, the
securities or other property obtainable upon exercise of this Option shall
include shares or other securities of another corporation or other
property, then thereafter, the number of such other shares or other
securities or property so obtainable shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
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<PAGE>
practicable to the provisions with respect to the Common Shares contained
in Section 4, and all other provisions of this Option with respect to
Common Shares shall apply on like terms to any such other shares or other
securities or property. Subject to the foregoing, and unless the context
requires otherwise, all references herein to Common Shares shall, in the
event of an adjustment pursuant to Section 4, be deemed to refer also to
any other shares or other securities or property when obtainable as a
result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this Option
may be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the purposes
of issuance upon exercise of this Option, such number of its Common
Shares as shall be issuable upon the exercise of this Option and at
its expense will obtain the listing thereof on all quotation systems
or national securities exchanges on which the Common Shares are then
listed; and if at any time the number of authorized Common Shares
shall not be sufficient to effect the exercise of this Option, the
Company will take such corporate action as may be necessary to
increase its authorized but unissued Common Shares to such number of
shares as shall be sufficient for such purpose; the Company shall have
analogous obligations with respect to any other securities or property
issuable upon exercise of this Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued,
fully paid, non-assessable and free from all taxes, liens and charges
with respect to the issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of Common
Shares upon the exercise of the rights represented by this Option
shall be borne by the Company, but in no event shall the Company be
responsible or liable for income taxes or transfer taxes upon the
transfer of any Options.
7. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
8. No transfer of all or a portion of the Option or Underlying Securities
shall be made at any time unless the Company shall have been supplied with
evidence reasonably satisfactory to it that such transfer is not in
violation of the Securities Act of 1933, as amended (the "Act"). Subject to
the satisfaction of the aforesaid condition and upon surrender of this
Option or certificates for any Underlying Securities at the office of the
Company, the Company shall deliver a new Option or Options or new
certificate or certificates for Underlying Securities to and in the name of
the assignee or assignees named therein. Any such certificate may bear a
legend reflecting the restrictions on transfer set forth herein.
9. If this Option is lost, stolen, mutilated or destroyed, the Company shall,
on such terms as to indemnity or otherwise as the Company may reasonably
impose, issue a new Option of like denomination, tenor and date. Any such
new Option shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Option shall be at any time enforceable by anyone.
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<PAGE>
10. Any Option issued pursuant to the provisions of Section 9 hereof, or upon
transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option or Options, shall set forth each
provision set forth in Sections 1 through 15, inclusive, of this Option as
each such provision is set forth herein, and shall be duly executed on
behalf of the Company by its chief executive officer or chief operating
officer.
11. Upon surrender of this Option for transfer or exchange or upon the exercise
hereof, this Option shall be cancelled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of a
partial exercise, Section 3 in case of an exchange or Section 8 in case of
a transfer, or Section 9 in case of mutilation. Any new Option certificate
shall be issued promptly but not later than fifteen (15) days after receipt
of the old Option certificate.
12. This Option shall inure to the benefit of and be binding upon the Holder
hereof, the Company and their respective successors, heirs, executors,
legal representatives and assigns.
13. All notices required hereunder shall be in writing and shall be deemed
given when telegraphed, delivered personally or within two (2) days after
mailing when mailed by certified or registered mail, return receipt
requested, to the party to whom such notice is intended, at the address of
such other party as set forth on the first page hereof, or at such other
address of which the Company or Holder has been advised by the notice
hereunder.
14. In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Holders shall be enforceable to the fullest extent permitted by law.
15. The validity, interpretation and performance of this Option and of the
terms and provisions hereof shall be governed by the laws of the State of
California applicable to agreements entered into and performed entirely in
such state.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of DECEMBER 30, 1995.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Eloy L. Ellis
----------------------------------------
Eloy L. Ellis, Acting Chief Financial Officer
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<PAGE>
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably elects to
exercise the right to purchase __________ Common Shares evidenced by the within
Option, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set forth
below.
___________________ , 19___
_____________________________________
Signature
_____________________________________
Print Name of Signatory
_____________________________________
Name to whom certificates are to be issued if different from above
_____________________________________
(Street Address)
_____________________________________
(City, State Zipcode)
_____________________________________
(Tax Payer I.D. Number)
If said number of shares and warrants shall not be all the shares purchasable
under the within Option, the undersigned requests that a new Option for the
unexercised portion shall be registered in the name of:
____________________________________
(Please Print)
____________________________________
(Street Address)
____________________________________
(City, State Zipcode)
____________________________________
(Tax Payer I.D. Number)
____________________________________
Signature
____________________________________
Print Name of Signatory
-7-
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED _______________________________, hereby sells,
assigns and transfers to ________________________________,(Social
Security or I.D. No.__________________) the within Option, or that
portion of this Option purchasable for _______ common shares together
with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint __________________________________
attorney to transfer such Option on the register of the within named
Company, with full power of substitution.
_____________________________
(Signature)
Dated: _____________ , 19___
Signature Guaranteed:
____________________________
(INTENTIONALLY BLANK)
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<PAGE>
EXHIBIT 99.12
INVESTMENT BANKING
CONSULTING AGREEMENT
BETWEEN
VITAFORT INTERNATIONAL CORPORATION
AND
NICHOLAS KONSTANT
<PAGE>
INVESTMENT BANKING
CONSULTING AGREEMENT
BETWEEN
VITAFORT INTERNATIONAL CORPORATION
AND
NICHOLAS KONSTANT
TABLE OF CONTENTS
PARAGRAPH NO. PAGE NO.
- ------------- --------
1 Engagement and Description of Services............ 1
2 Term.............................................. 2
3 Compensation...................................... 2
4 Independent Contractor............................ 2
5 Assignment........................................ 2
6 Non-Competition................................... 3
7 Confidentiality................................... 3
8 Termination....................................... 3
9 Disclaimer of Responsibility for Acts of Company.. 4
10 General Provisions................................ 5
10.1 Governing Law and Jurisdiction............. 5
10.2 Notices.................................... 5
10.3 Attorneys' Fees............................ 6
10.4 Complete Agreement......................... 6
10.5 Binding.................................... 6
10.6 Unenforceable Terms........................ 6
10.7 Execution in Counterparts.................. 6
10.8 Further Assurance.......................... 6
10.9 Incorporation by Reference................. 7
10.10 Acknowledgement of Attorney Representation. 7
10.11 Miscellaneous Provisions................... 7
Signatures
<PAGE>
INVESTMENT BANKING
CONSULTING AGREEMENT
THIS INVESTMENT BANKING CONSULTING AGREEMENT ("Agreement"), is made
and entered into as of the 4th day of January, 1996 ("Effective Date") by and
between Vitafort International Corporation, a Delaware corporation ("Company")
and Nicholas Konstant ("Consultant").
RECITALS
Company desires to engage Consultant to perform certain investment
banking and financial consulting services for it and Consultant desires, subject
to the terms and conditions of this Agreement, to perform such consulting
services for Company.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND
UNDERTAKINGS HEREIN CONTAINED AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO
AGREE AS FOLLOWS:
1. ENGAGEMENT AND DESCRIPTION OF SERVICES.
Company hereby retains Consultant as a consultant, and Consultant
hereby agrees to act as such consultant and to furnish such consulting services
to Company as requested from time to time by Company. Such consulting services
shall include, but not be limited to, consultation regarding identifying sources
of funding for Company (both debt and equity), analysis of the business
operations, properties, financial condition and prospects of Company, and
assistance in negotiating and effecting financing transactions. Consultant's
role shall be to advise and review only, it being understood that the management
of Company will have final authority with respect to all managerial decisions.
It is further understood and acknowledged by the parties hereto that the value
of Consultant's advice is not measurable in any qualitative manner and
Consultant shall be obligated to render advice upon the request of Company in
good faith, but shall not be obligated to spend any specific amount of time in
doing so.
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<PAGE>
2. TERM.
The term of this Agreement ("Term") shall begin as of the Effective
Date and shall terminate twenty-four (24) months thereafter, unless terminated
or extended in accordance with provisions of this Agreement.
3. COMPENSATION.
As compensation for all services rendered by Consultant pursuant to
this Agreement, Company shall issue to Consultant a warrant entitling Consultant
to purchase up to One Million (1,000,000) shares ("Warrant Shares") of Company's
common stock at an exercise price of $.15 per share ("Warrant"). The Warrant
shall vest in full as of the Effective Date and shall have a term of sixty (60)
months commencing on the Effective Date. The Warrant shall be substantially in
the form of Exhibit A hereto. The Warrant shall provide that the holder thereof
shall have piggyback registration rights with respect to any registration
statement filed by Company with the Securities and Exchange Commission on a form
which may include the Warrant Shares.
2
<PAGE>
4. INDEPENDENT CONTRACTOR.
It is expressly agreed that Consultant is acting as an independent
contractor in performing his services hereunder, and this Agreement is not
intended to, nor does it create, an employer- employee relationship nor shall it
be construed as creating any joint venture or partnership between Company and
Consultant. Consultant shall be responsible for all applicable federal, state
and other taxes related to Consultant's consulting fee and Company shall not
withhold or pay any such taxes on behalf of Consultant, including without
limitation social security, federal, state and other local income taxes. Since
Consultant is acting solely as an independent contractor under this Agreement,
Consultant shall not be entitled to insurance or other benefits normally
provided by Company to its employees.
5. ASSIGNMENT.
This Agreement is a personal one being entered into in reliance upon
and in consideration of the singular personal skill and qualifications of
Consultant. Consultant shall not voluntarily, or by operation of law assign or
otherwise transfer the obligations incurred on his part pursuant to terms of
this Agreement without the prior written consent of Company. Any attempt at
assignment or transfer by Consultant of his obligations hereunder, without such
consent, shall be null and void.
6. NON-COMPETITION.
Consultant agrees that during the Term he shall not, directly or
indirectly (whether for compensation or otherwise), alone or as an agent,
principal, partner, officer, employee, trustee, director, shareholder,
consultant or in any other capacity own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or furnish
any capital to, or be connected in any manner with, or provide any services as a
consultant for any business which has any activities or products directly
competitive with the activities and products of Company. Subject to the
foregoing, Company hereby acknowledges that Consultant is in the business of
providing consulting advice of the nature contemplated by this Agreement to
others and nothing herein contained shall be construed to limit or restrict
Consultant in conducting such business with respect to rendering such advice to
others.
7. CONFIDENTIALITY.
Consultant recognizes that during the course of Consultant's
activities on behalf of Company, he will accumulate certain proprietary and
confidential information and trade secrets used in Company's business and will
have divulged to him certain confidential and proprietary information and trade
secrets about
3
<PAGE>
the business, operations and prospects of Company, which constitute valuable
business assets of Company. Consultant hereby acknowledges and agrees that such
information ("Proprietary Information") is confidential and proprietary and
constitutes trade secrets and that the Proprietary Information belongs to
Company and not to Consultant. Consultant agrees, to the extent not prohibited
by law, that he shall not, at any time subsequent to the execution of this
Agreement, whether during or after the Term, disclose, divulge or make known,
directly or indirectly, to any person, or otherwise use or exploit in any manner
any Proprietary Information obtained by Consultant under this Agreement, except
in connection with and to the extent required by his performance of his duties
hereunder for Company. Upon termination of this Agreement Consultant shall
deliver to Company all tangible displays and repositories of Proprietary
Information.
8. TERMINATION.
This Agreement may be terminated on the occurrence of any one of the
following events:
8.1 The expiration of the Term hereof;
8.2 The mutual agreement of the parties;
8.3 At Company's option, on the last day of the month in which
Consultant dies or becomes permanently incapacitated. "Permanent incapacity" as
used herein shall mean mental or physical incapacity, or both, reasonably
determined by Company's Board of Directors based upon a certification of such
incapacity by, in the discretion of Company's Board of Directors, either
Consultant's regularly attending physician or a duly licensed physician selected
by Company's Board of Directors, rendering Consultant unable to perform
substantially all of his duties hereunder and which appears reasonably certain
to continue for at least six consecutive months without substantial improvement.
Consultant shall be deemed to have "become permanently incapacitated" on the
date Company's Board of Directors has determined that Consultant is permanently
incapacitated and so notifies Consultant;
8.4 By Company "with cause," effective upon delivery of written
notice to Consultant given at any time (without any necessity for prior notice)
if any of the following shall occur:
(a) a material breach of this Agreement by Consultant, which
breach has not been cured within thirty (30) days after a written demand
for such performance is delivered to Consultant by Company that
specifically identifies the manner in which Company believes that
Consultant has breached this Agreement;
4
<PAGE>
(b) any material acts or events which inhibit Consultant from
fully performing his responsibilities to Company in good faith, such as (i)
a felony criminal conviction; (ii) any other criminal conviction involving
Consultant's lack of honesty or Consultant's moral turpitude; (iii) drug or
alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
misconduct.
9. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY.
The obligations of the Consultant described in this Agreement consist
solely of the furnishing of information and advice to Company. In no event
shall Consultant be required by this Agreement to act as the agent of Company or
otherwise to represent or make decisions for Company. All final decisions with
respect to acts of Company or its affiliates, whether or not made pursuant to or
in reliance on information or advice furnished by Consultant hereunder, shall be
those of Company or such affiliates and Consultant shall under no circumstances
be liable for any expenses incurred or loss suffered by Company as a consequence
of such decisions.
10. GENERAL PROVISIONS.
10.1 GOVERNING LAW AND JURISDICTION. This Agreement shall be
governed by and interpreted in accordance with the laws of the State of
California. Each of the Parties hereto consents to such jurisdiction for the
enforcement of this Agreement and matters pertaining to the transaction and
activities contemplated hereby.
10.2 NOTICES. All notices and other communications provided for
or permitted hereunder shall be made by hand delivery, first class mail, telex
or telecopied, addressed as follows:
PARTY ADDRESS
----- -------
Company Vitafort International Corporation
1800 Avenue of the Stars, Suite 480
Los Angeles, California 90067
Attn: Mark Beychok
Telecopier No.: 310-556-1227
with a copy, which shall not constitute notice, to:
Harry S. Stahl, Esq.
McKenna & Stahl
2603 Main Street, Suite 1010
Irvine, California 92714
Telecopier No.: 714-752-6723
5
<PAGE>
Consultant Nicholas Konstant
c/o Nightengale-Conant
7300 North Lehigh Avenue
Niles, Illinois 60714
Telecopier No.: 708-674-2476
with a copy, which shall not constitute notice, to:
______________________________
______________________________
______________________________
______________________________
Telecopier No.: ______________
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five (5) business days
after deposit in any United States Post Office in the continental United States,
postage prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged or confirmed, if telecopied.
10.3 ATTORNEYS' FEES. In the event a dispute arises with
respect to this Agreement, the party prevailing in such dispute shall be
entitled to recover all expenses, including, without limitation, reasonable
attorneys' fees and expenses incurred in ascertaining such party's rights, in
preparing to enforce or in enforcing such party's rights under this Agreement,
whether or not it was necessary for such party to institute suit.
10.4 COMPLETE AGREEMENT. This Agreement supersedes any and all
of the other agreements, either oral or in writing, between the Parties with
respect to the subject matter hereof and contains all of the covenants and
agreements between the Parties with respect to such subject matter in any manner
whatsoever. Each Party to this Agreement acknowledges that no representations,
inducements, promises or agreements, oral or otherwise, have been made by any
Party, or anyone herein, and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding. This Agreement may be
changed or amended only by an amendment in writing signed by all of the Parties
or their respective successors-in-interest.
10.5 BINDING. This Agreement shall be binding upon and inure to
the benefit of the successors-in-interest, assigns and personal representatives
of the respective Parties, except that this Agreement may not be assigned by
Consultant without the prior written consent of Company.
10.6 UNENFORCEABLE TERMS. Any provision hereof prohibited by
law or unenforceable under the law of any jurisdiction in which such provision
is applicable shall as to such jurisdiction only be ineffective without
affecting any other
6
<PAGE>
provision of this Agreement. To the full extent, however, that such applicable
law may be waived to the end that this Agreement be deemed to be a valid and
binding agreement enforceable in accordance with its terms, the Parties hereto
hereby waive such applicable law knowingly and understanding the effect of such
waiver.
10.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in several counterparts and when so executed shall constitute one agreement
binding on all the Parties, notwithstanding that all the Parties are not
signatory to the original and same counterpart.
10.8 FURTHER ASSURANCE. From time to time each Party will
execute and deliver such further instruments and will take such other action as
any other Party may reasonable request in order to discharge and perform their
obligations and agreements hereunder and to give effect to the intentions
expressed in this Agreement.
10.9 INCORPORATION BY REFERENCE. All exhibits referred to in
this Agreement are incorporated herein in their entirety by such reference.
10.10 ACKNOWLEDGEMENT OF ATTORNEY REPRESENTATION. Consultant
acknowledges that McKenna & Stahl has acted only as attorneys for Company in
connection with the negotiation and execution of this Agreement; that he has
been advised by McKenna & Stahl to seek independent representation by counsel of
his own choice; and that he is not relying upon the said law firm to act as his
attorney in connection with any matter relating to this Agreement.
10.11 MISCELLANEOUS PROVISIONS. The various headings and numbers
herein and the grouping of provisions of this Agreement into separate articles
and paragraphs are for the purpose of convenience only and shall not be
considered a party hereof. The language in all parts of this agreement shall in
all cases by construed in accordance with its fair meaning as if prepared by all
Parties to the Agreement and not strictly for or against any of the Parties.
(Signature page on page 8)
7
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
"COMPANY"
VITAFORT INTERNATIONAL CORPORATION
A Delaware corporation
By: /s/ Mark Beychok
-----------------------------------
Mark Beychok, President
"CONSULTANT"
/s/ Nicholas Konstant
-----------------------------------
Nicholas Konstant, an individual
(Signature page to Strategic Services Consulting Agreement between Vitafort
International Corporation and Nicholas Konstant)
8
<PAGE>
EXHIBIT 99.13
EXCEPT AS PERMITTED BY SECTION 8 HEREOF, NO TRANSFER SHALL BE MADE AT
ANY TIME UNLESS THE COMPANY SHALL HAVE BEEN SUPPLIED WITH EVIDENCE
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
VITAFORT INTERNATIONAL CORPORATION
______________________
OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF JANUARY 6, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: Nicolas Konstant
ADDRESS: 400 North McClurg Court, #3810
Chicago, IL
60611
or registered assigns (the "Holder") are entitled, subject to the terms set
forth herein and in the Consulting Contract, as amended in January 1996
(incorporated by reference), to purchase from Vitafort International Corporation
(the "Company"), a Delaware corporation, having its offices at Suite 480, 1800
Avenue of the Stars, Los Angeles, California 90067, up to TWO MILLION ONE
HUNDRED FIFTEEN Thousand (2,115,000) shares of the Company's common stock
subject to adjustment as set forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the
Company's common stock including Underlying Securities, as more
fully set forth in Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be "EXERCISE PRICE"
Cents ($.15) per share.
(c) "Underlying Securities" or "Underlying Shares"or "Underlying Stock"
shall refer to the Common Shares or other securities or property
issuable or issued upon exercise of this Option.
(d) The options vest based upon mutual agreement based upon assigned
projects and approved time & expenses.
- 1 -
<PAGE>
2. (a) The purchase rights represented by this Option may be exercised by the
Holder hereof, in whole or in part (but not as to less than a whole
Common Share), at any time, and from time to time, during the period
commencing this date, until JUNE 30, 1997 (the "Expiration Date"),
by the presentation of this Option, with the purchase form attached
duly executed, at the Company's office (or such office or agency of
the Company as it may designate in writing to the Holder hereof by
notice pursuant to Section 14 hereof), specifying the number of
Common Shares as to which the Option is being exercised, and upon
payment by the Holder to the Company in cash or by certified check
or bank draft, in an amount equal to the Option Price times the
number of Common Shares then being purchased hereunder.
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on
the date on which this Option shall have been presented and payment
made for such Underlying Securities as aforesaid. Certificates for
the Underlying Securities so obtained shall be delivered to the
Holder hereof within a reasonable time, not exceeding seven (7)
days, after the rights represented by this Option shall have been so
exercised. If this Option shall be exercised in part only or
transferred in part subject to the provisions herein, the Company
shall, upon surrender of this Option for cancellation or partial
transfer, deliver a new Option evidencing the rights of the Holder
hereof to purchase the balance of the Underlying Shares which such
Holder is entitled to purchase hereunder. Exercise in full of the
rights represented by this Option shall not extinguish the rights
granted under Section 9 hereof.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Common Shares as are
purchasable hereunder; and (ii) this Option may be divided or combined with
other Options which carry the same rights, in either case, upon presentation
hereof at the aforesaid office of the Company together with a written
notice, signed by the Holder hereof, specifying the names and denominations
in which new Options are to be issued, and the payment of any transfer tax
due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option Price
and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common
Shares by recapitalization, reclassification, stock dividend, or
split-up thereof or other means, the number of Common Shares
subject to this Option immediately prior to such subdivision shall
be proportionately increased and the Option Price shall be
proportionately decreased, and if the Company shall at any time
combine the outstanding Common Shares by recapitalization,
reclassification or combination thereof or other means, the number
of Common Shares subject to this Option immediately prior to such
combination shall be proportionately decreased and the Option Price
shall be proportionately increased. Any such adjustment and
adjustment to the Option Price shall become effective at the close
of business on the record date for such subdivision or combination.
- 2 -
<PAGE>
(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not
limited to Common Shares, or other assets (other than a cash
distribution made as a dividend payable out of earnings or out of
any earned surplus legally available for dividends under the laws
of the jurisdiction of incorporation of the Company), the Board of
Directors shall be required to make such equitable adjustment in
the Option Price and the type and/or number of Underlying
Securities in effect immediately prior to the record date of such
distribution as may be necessary to preserve to the Holder of this
Option rights substantially proportionate to and economically
equivalent to those enjoyed hereunder by such Holder immediately
prior to the happening of such distribution. Any such adjustment
made reasonably and in good faith by the Board of Directors shall
be final and binding upon the Holders and shall become effective as
of the record date for such distribution.
(c) No adjustment in the number of Common Shares subject to this Option or
the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of
shares of at least 1% of the then adjusted number of Common Shares
issuable upon exercise of the Option, provided, however, that any
adjustments which by reason of the foregoing are not required at
the time to be made shall be carried forward and taken into account
and included in determining the amount of any subsequent
adjustment. If the Company shall make a record of the Holders of
its Common Shares for the purpose of entitling them to receive any
dividend or distribution and legally abandon its plan to pay or
deliver such dividend or distribution then no adjustment in the
number of Common Shares subject to the Option shall be required by
reason of the making of such record.
(d) In case of any capital reorganization or reclassification or change of
the outstanding Common Shares (exclusive of a change covered by
Section 4(a) hereof or which solely affects the par value of such
Common Shares) or in the case of any merger or consolidation of the
Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification,
change, capital reorganization or change in the ownership of the
outstanding Common Shares), or in the case of any sale or
conveyance or transfer of all or substantially all of the property
of the Company and in connection with which the Company is
dissolved, the Holder of this Option shall have the right
thereafter (until the expiration of the right of exercise of this
Option) to receive upon the exercise hereof, for the same aggregate
Option Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property
receivable upon such reclassification, change, capital
reorganization, merger or consolidation, or upon the dissolution
following any sale or other transfer, by a holder of the number of
Common Shares of the Company equal to the number of common shares
obtainable upon exercise of this Option immediately prior to such
event; and if any reorganization, reclassification, change, merger,
consolidation, sale or transfer also results in a change in Common
Shares covered by Section 4(a), then such adjustment shall be made
pursuant to both this Section 4(d) and Section 4(a). The
provisions of this Section 4(d) shall similarly apply to successive
reclassification, or capital reorganizations, mergers or
consolidations, changes, sales or other transfers.
- 3 -
<PAGE>
(e) The Company shall not be required to issue fractional Common Shares
upon any exercise of this Option. As to any final fraction of a
Common Share which the Holder of this Option would otherwise be
entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount
equal to the same fraction of the market value of a share of such
stock on the business day preceding the day of exercise or book
value as determined by the Company's independent public accountants
if not publicly traded. The Holder of this Option, by his
acceptance hereof, expressly waives any right to receive any
fractional shares of stock upon exercise of this Option.
(f) As used herein, the current market price ("Market Price") per share at
any date shall be the price of Common Shares on the business day
immediately preceding the event requiring an adjustment hereunder
and shall be (A) if the principal trading market for such
securities is an exchange, the closing price on such exchange on
such day provided if trading of such Common Shares is listed on any
consolidated tape, the price shall be the closing price set forth
on such consolidated tape or (B) if the principal market for such
securities is the over-the-counter market, the high bid price on
such date as set forth by NASDAQ or closing price if listed on
NASDAQ NMS or, if the security is not quoted on NASDAQ, the high
bid price as set forth in the NATIONAL QUOTATION BUREAU sheet
listing such securities for such day. Notwithstanding the
foregoing, if there is no reported closing price or high bid price,
as the case may be, on a date prior to the event requiring an
adjustment hereunder, then the current market price shall be
determined as of the latest date prior to such day for which such
closing price or high bid price is available.
(g) Irrespective of any adjustments pursuant to this Section 4 in the
Option Price or in the number, or kind, or class of shares or other
securities or other property obtainable upon exercise of this
Option, and without impairing any such adjustment the certificate
representing this Option may continue to express the Option Price
and the number of Common Shares obtainable upon exercise at the
same price and number of Common Shares as are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the Option
Price shall be determined exclusively pursuant to the provisions
hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number
of Underlying Securities purchasable and the price per share upon
exercise of this Option and shall set forth in reasonable detail
the events which resulted in such adjustment.
- 4 -
<PAGE>
5. For the purposes of this Option, the terms "Common Shares" or "Common Stock"
shall mean (i) the class of stock designated as the common stock of the
Company on the date set forth on the first page hereof or (ii) any other
class of stock resulting from successive changes or reclassification of
such Common Stock consisting solely of changes from par value to no par
value, or from no par value to par value or changes in par value. If
at any time, as a result of an adjustment made pursuant to Section 4,
the securities or other property obtainable upon exercise of this
Option shall include shares or other securities of another corporation
or other property, then thereafter, the number of such other shares or
other securities or property so obtainable shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Shares contained in Section 4, and all other provisions of this Option
with respect to Common Shares shall apply on like terms to any such
other shares or other securities or property. Subject to the
foregoing, and unless the context requires otherwise, all references
herein to Common Shares shall, in the event of an adjustment pursuant
to Section 4, be deemed to refer also to any other shares or other
securities or property when obtainable as a result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this Option
may be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the
purposes of issuance upon exercise of this Option, such number of
its Common Shares as shall be issuable upon the exercise of this
Option and at its expense will obtain the listing thereof on all
quotation systems or national securities exchanges on which the
Common Shares are then listed; and if at any time the number of
authorized Common Shares shall not be sufficient to effect the
exercise of this Option, the Company will take such corporate
action as may be necessary to increase its authorized but unissued
Common Shares to such number of shares as shall be sufficient for
such purpose; the Company shall have analogous obligations with
respect to any other securities or property issuable upon exercise
of this Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued,
fully paid, non-assessable and free from all taxes, liens and
charges with respect to the issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of Common
Shares upon the exercise of the rights represented by this Option
shall be borne by the Company, but in no event shall the Company be
responsible or liable for income taxes or transfer taxes upon the
transfer of any Options.
- 5 -
<PAGE>
7. The Company may issue a call of this Warrant ("Call Notice") at any time
after the Effective Registration Date, but prior to the expiration of
this Warrant, by written notice to Warrant Holder, provided only that
the Closing Price (hereinafter defined) of the Company's Common Stock
has theretofore equalled or exceeded Forty-five Cents ($0.45) per Share
for ten (10) consecutive Trading Days after the Effective Registration
Date. This Warrant shall expire and become null and void thirty (30)
days after the issuance of the Call Notice. The Warrant Holder may
exercise this Warrant and purchase some or all of the Shares then
subject to this Warrant within said thirty (30)-day period, but may not
thereafter exercise this Option or purchase any of the Shares. If the
Warrant is not exercised within said thirty (30) day period, the
Company will have the right to redeem any or all outstanding and
unexercised Options at a redemption price of $0.0001 per Warrant. For
purposes of this Section 7.3, "Closing Price" means (a) if the Common
Stock is then listed on an established stock exchange or exchanges, the
average bid and ask price per share for each Trading Day on the
principal exchange on which the Common Stock is traded, as reported in
The Wall Street Journal; or (b) if the Common Stock is not then listed
on an exchange, the price per share for the Common Stock in the
over-the-counter market as quoted on NASDAQ (either National Market
System or Small Cap Issues or the OTC Electronic Bulletin Board), for
each Trading Day, as reported in The Wall Street Journal. If the
Common Stock is not then listed on an exchange or quoted on NASDAQ or
the OTC Electronic Bulletin Board, the Common Stock shall be deemed to
have a Closing Price of less Forty-five Cents ($0.45) per share on such
Trading Day. For purposes of this Section 7.3, the term "Trading Day"
shall mean a day on which the New York Stock Exchange is open for
trading.
8. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
9. No transfer of all or a portion of the Option or Underlying Securities
shall be made at any time unless the Company shall have been supplied
with evidence reasonably satisfactory to it that such transfer is not
in violation of the Securities Act of 1933, as amended (the "Act").
Subject to the satisfaction of the aforesaid condition and upon
surrender of this Option or certificates for any Underlying Securities
at the office of the Company, the Company shall deliver a new Option or
Options or new certificate or certificates for Underlying Securities to
and in the name of the assignee or assignees named therein. Any such
certificate may bear a legend reflecting the restrictions on transfer
set forth herein.
10. If this Option is lost, stolen, mutilated or destroyed, the Company shall,
on such terms as to indemnity or otherwise as the Company may
reasonably impose, issue a new Option of like denomination, tenor and
date. Any such new Option shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen,
mutilated or destroyed Option shall be at any time enforceable by
anyone.
11. Any Option issued pursuant to the provisions of Section 9 hereof, or upon
transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option or Options, shall set forth
each provision set forth in Sections 1 through 15, inclusive, of this
Option as each such provision is set forth herein, and shall be duly
executed on behalf of the Company by its chief executive officer or
chief operating officer.
- 6 -
<PAGE>
12. Upon surrender of this Option for transfer or exchange or upon the exercise
hereof, this Option shall be cancelled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of
a partial exercise, Section 3 in case of an exchange or Section 8 in
case of a transfer, or Section 9 in case of mutilation. Any new Option
certificate shall be issued promptly but not later than fifteen (15)
days after receipt of the old Option certificate.
13. This Option shall inure to the benefit of and be binding upon the Holder
hereof, the Company and their respective successors, heirs, executors,
legal representatives and assigns.
14. All notices required hereunder shall be in writing and shall be deemed given
when telegraphed, delivered personally or within two (2) days after
mailing when mailed by certified or registered mail, return receipt
requested, to the party to whom such notice is intended, at the address
of such other party as set forth on the first page hereof, or at such
other address of which the Company or Holder has been advised by the
notice hereunder.
15. In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Holders shall be enforceable to the fullest extent permitted by law.
16. The validity, interpretation and performance of this Option and of the terms
and provisions hereof shall be governed by the laws of the State of
California applicable to agreements entered into and performed entirely in
such state.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of JANUARY 6, 1996.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ MARK BEYCHOK
_________________________________
Mark Beychok, Chief Executive Officer
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<PAGE>
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably elects to
exercise the right to purchase __________ Common Shares evidenced by the within
Option, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set forth
below.
______________, 19___
_________________________________
Signature
_________________________________
Print Name of Signatory
_________________________________
Name to whom certificates are to be issued if different from above
_________________________________
(Street Address)
_________________________________
(City, State Zipcode)
_________________________________
(Tax Payer I.D. Number)
If said number of shares and warrants shall not be all the shares purchasable
under the within Option, the undersigned requests that a new Option for the
unexercised portion shall be registered in the name of:
_________________________________
(Please Print)
_________________________________
(Street Address)
_________________________________
(City, State Zipcode)
_________________________________
(Tax Payer I.D. Number)
_________________________________
Signature
_________________________________
Print Name of Signatory
- 8 -
<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED ________________________________, hereby sells,
assigns and transfers to ________________________________,(Social
Security or I.D. No. ______________________) the within Option, or that
portion of this Option purchasable for _______ common shares together
with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint ____________________________________
attorney to transfer such Option on the register of the within named
Company, with full power of substitution.
_________________________________
(Signature)
Dated: ______________, 19___
Signature Guaranteed:
_________________________________
(INTENTIONALLY BLANK)
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<PAGE>
EXHIBIT 99.14
VITAFORT INTERNATIONAL CORPORATION
1800 AVENUE OF THE STARS
LOS, ANGELES, CALIFORNIA 90067
December 22, 1995
Frank J. Hariton, Esq.
485 Madison Avenue - 9th Floor
New York, New York 10022
Re: Account Balance/Conversion and Payment Plan
Dear Frank:
Please accept this letter as confirmation of our discussions regarding the
conversion of a portion of the amounts due you for services provided to Vitafort
International Corporation, and a payment plan for the remaining balance. Our
discussions have been as follows:
1. Through November 30, 1995, as reflected on your December 8, 1995 bill to
us, the total amount due to you was $43,079.75.
2. You desire to convert $20,000 of the amount due to you into Vitafort
International Corporation equity securities on the same terms and prices as
are being offered in our current private placement and Vitafort agrees to
allow you to do so. This agreement will be reflected in a more formal
consulting agreement which will be filed as an exhibit to Vitafort's next
S-8 Registration Statement, which Registration Statement will include your
securities and be filed no later than June 30, 1996.
3. We have mutually agreed to retire the remaining balance due to you of
$23,079.75 in monthly payments commencing on January 6, 1996 and no later
than the sixth day of each month thereafter, with eleven payments of
$1,923.25 and a twelfth payment of $1,924 in December 1996.
4. Vitafort commits that all future billings for services after November 30,
1995 will be paid under typical thirty day terms, except that on January 6,
1996 Vitafort will also pay you the sum of $3,000, in addition to the
$1,923.25 referred to in paragraph 3, such $3,000 to be applied against the
statement you deliver to Vitafort during January 1996.
5. You confirm to Vitafort that you have read and understand the Private
Placement Memorandum and Subscription agreements in the current private
placement.
If the foregoing meets with your approval, please sign this letter in the
appropriate place below.
Very truly yours,
/s/ Eloy Ellis
Eloy Ellis
Agreed and Accepted:
/s/Frank J. Hariton
Frank J. Hariton
<PAGE>
EXHIBIT 99.15
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND
UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK
WARRANT AGREEMENT
THIS CLASS A COMMON STOCK WARRANT AGREEMENT is made as of
December 30, 1995 ("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a
Delaware corporation ("Company"), in favor of Frank Hariton ("Warrant Holder"
or "Holder").
WHEREAS, the Company proposes to issue and sell in a non-public offering
("Offering") pursuant to Section 4(2) of the Securities Act of 1933, as amended
("Securities Act") up to 200 Units ("Unit"), each Unit consisting of 100,000
shares of the Company's common stock, $.0001 par value, ("Common Stock"), 50,000
Class A Common Stock Purchase Warrants ("A Warrants") and 50,000 Class B Common
Stock Purchase Warrants ("B Warrants"). Each A Warrant and each B Warrant
entitles the holder to purchase one share of the Common Stock; and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants,
and the rights and obligations of the Company and the Warrant Holder with
respect thereto, the Company hereby provides as follows:
Section 1. CERTIFICATION. For value received, the Warrant Holder or
its registered assign ("Holder") is entitled to purchase from the Company,
subject to the provisions of this Warrant Agreement, fully paid, validly issued
and nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a
1
<PAGE>
registration statement covering the Warrant Shares (as defined herein) under the
Securities Act is declared effective by the Securities and Exchange Commission
("Effective Registration Date"), and terminating at 5:00 P.M. Los Angeles time
15 months thereafter. The number of shares of Common Stock to be received upon
the exercise of the Warrant and the price to be paid for each share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, and as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the
Purchase Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant
Certificate may be exchanged for another Certificate entitling the Holder
thereof to purchase a like aggregate number of shares as the Certificate
surrendered then entitled such Holder to purchase. Any Holder desiring to
exchange a Warrant Certificate shall make such request in writing delivered
to the Company, and shall surrender, properly endorsed, the Certificate to be
so exchanged. Thereupon, the Company shall countersign and deliver to the
person entitled thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this
Agreement, each Holder shall have the right, which may be exercised
commencing on the Effective Registration Date and terminating at 5:00 PM. Los
Angeles time 15 months thereafter, to purchase from the Company the number of
fully paid and nonassessable shares which the Holder may at the time be
entitled to purchase on exercise of such Warrants.
4.2 EXERCISE OF WARRANTS. A Warrant may be exercised
upon surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the
2
<PAGE>
Warrant Agent shall promptly issue and cause to be delivered to or as
directed by the Holder, and in such name or names as the Holder may
designate, a Certificate for the number of full shares purchased upon the
exercise of the Warrant, together with cash as provided in Section 8 hereof;
for any fractional shares otherwise issuable upon such exercise. Such
Certificate shall be deemed to have been issued, and any person so designated
to be named therein shall be deemed to have become a holder of record of such
shares, as of the date of the surrender of such Warrant and payment of the
Aggregate Exercise Price; provided, however, that if, at the date of
surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares
with respect to which such Warrant is then exercised shall be issuable as of
the date on which such books shall next be opened and until such date the
Company shall be under no duty to deliver any certificate for such shares;
provided further, however, that the transfer books of record, unless
otherwise required by law, shall not be closed at any one time for a period
longer than twenty (20) days. The rights of purchase represented by the
Warrants shall be exercisable, at the election of the Holders thereof, either
in full or from time to time in part, and in the event that a Warrant
Certificate is exercised to purchase less than all of the shares purchasable
on such exercise at any time prior to the date of expiration of the Warrants,
a new Certificate evidencing the remaining shares available for purchase will
be issued, and the Company is hereby irrevocably authorized to sign and to
deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of shares upon the
exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable with respect to any
transfer involved in the issue or delivery of any Warrants or certificates
for shares in a name other than that of the registered Holder of Warrants
with respect to which such shares are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent right or interest; but only upon receipt of evidence to the
reasonable satisfaction of the Company of such mutilation, loss, theft or
destruction of such Certificate and indemnity, if requested, also to the
reasonable satisfaction of the Company. An applicant for such a substitute
Warrant Certificate shall also comply with such other reasonable regulations
and pay such other reasonable charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved,
and the Company shall at all times keep reserved, out of its authorized
Common Stock, a number of shares of Common Stock sufficient to provide for
the exercise of the rights of purchase represented by the outstanding
Warrants.
3
<PAGE>
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The
Company shall have the right, except as limited by law, other agreement or
herein, to purchase or otherwise acquire Warrants at such times, in such
manner and for such consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may
issue a call of this Warrant ("Call Notice") at any time after the Effective
Registration Date, but prior to the expiration of this Warrant, by written
notice to Warrant Holder, provided only that the Closing Price (hereinafter
defined) of the Company's Common Stock has theretofore equalled or exceeded
Thirty-Three and three-fourths Cents ($0.3375) per Share for ten (10)
consecutive Trading Days after the Effective Registration Date. This Warrant
shall expire and become null and void thirty (30) days after the issuance of
the Call Notice. The Warrant Holder may exercise this Warrant and purchase
some or all of the Shares then subject to this Warrant within said thirty
(30)-day period, but may not thereafter exercise this Warrant or purchase any
of the Shares. If the Warrant is not exercised within said thirty (30) day
period, the Company will have the right to redeem any or all outstanding and
unexercised Warrants at a redemption price of $0.0001 per Warrant. For
purposes of this Section 7.3, "Closing Price" means (a) if the Common Stock
is then listed on an established stock exchange or exchanges, the average bid
and ask price per share for each Trading Day on the principal exchange on
which the Common Stock is traded, as reported in The Wall Street Journal; or
(b) if the Common Stock is not then listed on an exchange, the price per
share for the Common Stock in the over-the-counter market as quoted on NASDAQ
(either National Market System or Small Cap Issues or the OTC Electronic
Bulletin Board), for each Trading Day, as reported in The Wall Street
Journal. If the Common Stock is not then listed on an exchange or quoted on
NASDAQ or the OTC Electronic Bulletin Board, the Common Stock shall be deemed
to have a Closing Price of less than Thirty-Three and three-fourths Cents
($0.3375) per share on such Trading Day. For purposes of this Section 7.3,
the term "Trading Day" shall mean a day on which the New York Stock Exchange
is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may
be purchased upon exercise of Warrants in effect at any time, and as adjusted
from time to time as provided in Section 11 of this Agreement, is referred to
herein as the "Exercise Price." Subject to adjustment, the Exercise Price
shall be $0.225 per share. The product of the Exercise Price times the
number of shares the Holder then elects to purchase is herein referred to as
the "Aggregate Exercise Price."
Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at
law or in equity, and the rights of the Holder are limited to those expressed
herein and in the Warrant Certificate and are not enforceable against the
Company except to the extent set forth herein and therein.
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Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number
and kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock
as interest on preferred stock), subdivide (split) its outstanding shares of
Common Stock, combine (reverse split) its outstanding shares of Common Stock,
issue by reclassification of its shares of Common Stock any shares or other
securities of the Company, or distribute as a stock dividend to holders of
its Common Stock any securities of the Company or of another entity, the
number of shares of Common Stock or other securities the Holder hereof is
entitled to purchase pursuant to the Warrants immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive upon exercise the
number of shares of Common Stock or other securities which he, she or it
would have owned or would have been entitled to receive after the happening
of any of the events described above had the Warrant been exercised
immediately prior to the happening of such event, and the Exercise Price
shall be correspondingly adjusted; provided, however, that no adjustment in
the number of shares and/or the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%)
in such number and/or price; and provided further, however, that any
adjustments which by reason of this Section 11 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
An adjustment made pursuant to this Section 11 shall become effective
immediately after the record date in the case of a stock dividend or other
distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or reclassification. The Holder
shall be entitled to participate in any subscription or other rights offering
made to holders of Common Stock as if he, she or it had purchased the full
number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or
adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made
during the term of a Warrant or upon the exercise of a Warrant.
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11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or
merger of the Company into another corporation or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute an agreement that
each Holder shall have the right thereafter upon payment of the Warrant Price
in effect immediately prior to such action to purchase upon exercise of each
Warrant the kind and amount of shares and other securities and property which
he, she or it would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had such Warrant
been exercised immediately prior to such action. The Company shall mail by
first class mail, postage prepaid, to each Holder, notice of the execution of
any such agreement. Such agreement shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Section 11. The provisions of this subsection 11.5 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any
adjustments in the Exercise Price or the number or kind of shares purchasable
upon the exercise of the Warrants, Warrants theretofore or thereafter issued
may continue to express the same price and number and kind of shares as are
stated in the Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights
and obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all actions
necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this
Section 13 shall be binding upon any transferee of the Warrants and upon each
holder of Warrant Shares. As used in this Section 13, the term "Warrant
Shares" includes any shares of the Company's Common Stock or other
securities, issued in respect of the Warrant Shares pursuant to any stock
split, stock dividend, recapitalization or otherwise; and the term "Warrant"
includes any Warrant Certificate or Certificates issued in exchange for the
original Warrant Certificate.
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13.1 RESTRICTED SECURITIES. The Warrants and
Warrant Shares have not been registered under the Securities Act of 1933, as
amended, ("Securities Act") or the securities laws of any states and will be
offered and sold in reliance on exemptions from the registration requirement
of such laws. The Warrants and Warrant Shares are deemed to be "restricted
securities" as that term is defined under Rule 144 promulgated under the
Securities Act, because the Warrants will be issued and sold by the Company
in private transactions not involving a public offering. In general, under
Rule 144 as currently in effect, subject to the satisfaction of certain other
conditions, a person, including an affiliate of the Company (or persons whose
shares are aggregated), who has owned restricted shares of Common Stock
beneficially for at least two years is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1%
of the total number of outstanding shares of the same class or, if the Common
Stock is quoted on NASDAQ, the average weekly trading volume during the four
calendar weeks preceding the sale. A person who has held the securities for
at least three years and who has not been an affiliate of the Company for at
least three months immediately prior to a proposed sale is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above.
13.2 LEGEND RESTRICTION. The Company shall cause
the following legend to be set forth on each Warrant Certificate and
certificates representing the Warrant Shares unless counsel for the Company
is of the opinion as to any such certificates that such legend is unnecessary:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION THEREUNDER AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY
OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
13.3 NOTICE OF PROPOSED TRANSFER. Prior to any
proposed transfer of the Warrants or of the Warrant Shares, the Holder
thereof shall give written notice to the Company stating such Holder's
intention to effect such transfer and describing the circumstances of the
proposed transfer in sufficient detail, accompanied by either (i) an opinion
of counsel reasonably satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities
Act, or (ii) a "no action" letter from the staff of the Securities and
Exchange Commission ("Commission") to the effect that the staff will not
recommend that enforcement action be taken if the proposed transfer is
effected without registration. Subject to evidence of compliance with any
applicable state securities or "blue sky" law or laws, the Company shall
promptly notify the Holder in writing that such Holder may proceed with its
transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against
the Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of
its officers, directors and partners, legal counsel, and accountants and each
person controlling such Holder within the meaning of Section 18 of the
Securities Act, with respect to which registration, qualification, or
compliance has been effected pursuant to this Agreement, and each
underwriter, if any, and each person who controls within the meaning of
Section 18 of the Securities Act any underwriter, against all expenses,
claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder, each of
its officers, directors, partners, legal counsel, and accountants and each
person controlling such Holder, each such underwriter, and each person who
controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability, or action, provided that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability, or expense arises out of or is based on any
untrue statement or
8
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omission in reliance upon written information furnished to the Company by
such Holder or underwriter and stated to be specifically for use therein. It
is agreed that the indemnity agreement contained in this Section 16.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of
the Company (which consent has not been unreasonably withheld).
14.2 Each Holder will, if Warrant Shares held by
him, her or it are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each
of its directors, officers, partners, legal counsel, and accountants and each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of Section 18 of the Securities Act, each
other such Holder and Other Stockholder, and each of their officers,
directors, and partners, and each person controlling such Holder or Other
Stockholder, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular, or other document, or
any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other
Stockholders, directors, officers, partners, legal counsel, and accountants,
persons, underwriters, or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided that
in no event shall any indemnity under this Section 16 exceed the gross
proceeds from the offering received by such Holder.
14.3 Each party entitled to indemnification under
this Section 16 ("Indemnified Party") shall give notice to the party required
to provide indemnification ("Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of
such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefore, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 16, to the extent such failure is not prejudicial. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such
9
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claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
14.4 If the indemnification provided for in this
Section 16 is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of
the Indemnified Party on the other in connection with the statement or
omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations; provided, however that
in no event shall any contribution by a Holder under this Section 16.4 exceed
the gross proceeds from the offering received from such Holder. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be
determined by 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 Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or omission.
14.5 Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available
the benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the
Company available as those terms are understood and defined in Rule 144 under
the Securities Act; and
(b) File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Securities Exchange Act of 1934 at any time after it has become
subject to such reporting requirements.
Section 16. DELAY OF REGISTRATION. No Holder shall have any right
to take any action to restrain, enjoin, or otherwise delay any registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time
to time supplement or amend this Agreement, without the approval of any
Holder, in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or
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inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company may
deem necessary or desirable and which shall not be inconsistent with the
provisions of the Warrants and which shall not adversely affect the interest
of the Holders, or as provided herein. The Company will notify Warrant
Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall
bind and inure to the benefit of the Company and the Warrant Holders, and
their respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any
Holder to the Company, shall be in writing and shall be mailed or delivered
to the Company at its office at 1800 Avenue of the Stars, Suite 480, Los
Angeles, California 90067. Any notice mailed pursuant to this Agreement by
the Company to the Holders shall be in writing and shall be mailed or
delivered to such Holders at their respective addresses on the books of the
Warrant Agent. Each party hereto may from time to time change the address to
which notices to it are to be delivered or mailed hereunder by notice in
writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company
will not merge or consolidate with or into any other corporation unless the
corporation resulting from such merger or consolidation (if not the Company)
shall expressly assume, by supplemental agreement satisfactory in form to the
Warrant Agent and executed and delivered to the Company, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
Section 21. APPLICABLE LAW. This Agreement and each Warrant
issued hereunder shall be governed by and construed in accordance with the
laws of the State of Delaware, without giving effect to principles of
conflict of laws.
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Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company and the Warrant Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Mark Beychok
---------------------------
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
Frank Hariton
/s/ Frank Hariton
- ------------------------------------
Signature
By: ____________________________
Its: ____________________________
By: ____________________________
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CERTIFICATE NO. VPS-1A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK WARRANT
TO PURCHASE 66,667 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Frank Hariton or registered
assigns ("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL
CORPORATION, INC. a Delaware corporation, ("Company"), up to Sixty-Six Thousand
Six Hundred Sixty-Seven (66,667), fully paid and nonassessable shares of common
stock of the Company ("Common Stock"), at any time commencing one year after a
registration statement covering the Warrant Shares (as defined in the Warrant
Agreement referred to herein) under the Securities Act of 1933, as amended, has
been declared effective by the Securities and Exchange Commission and
terminating at 5:00 P.M. Los Angeles time 15 months thereafter, at the purchase
price of $0.225 per share ("Exercise Price") (pending adjustment), as provided
in Section 1 of a the Warrant Agreement. This Warrant is issued pursuant to the
Warrant Agreement made by the Company dated November 30, 1995 in favor of all
Warrant Holders ("Warrant Agreement") and is subject to all the terms thereof,
including the limitations on transferability set forth in Section 13 thereof.
The Holder accepts the terms and provisions of the Warrant Agreement by
acceptance of this Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ MARK BEYCHOK
___________________________________
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated _________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VPS-1B to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _____________________________________________________________________
(please type or print in block letters)
Address: _____________________________________________________________________
Signature:_____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: _____________________________________________________________________
Address: _____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VPS-1B to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature:________________________
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EXHIBIT 99.16
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE
WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE WARRANTS NOR
THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES MAY BE SOLD,
OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER APPLICABLE
STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK
WARRANT AGREEMENT
THIS CLASS B COMMON STOCK WARRANT AGREEMENT is made as of December 30,1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of Frank Hariton ("Warrant Holder" or "Holder").
WHEREAS, the Company proposes to issue and sell in a non-public offering
("Offering") pursuant to Section 4(2) of the Securities Act of 1933, as amended
("Securities Act") up to 200 Units ("Unit"), each Unit consisting of 100,000
shares of the Company's common stock, $.0001 par value ("Common Stock"), 50,000
Class A Common Stock Purchase Warrants ("A Warrants") and 50,000 Class B Common
Stock Purchase Warrants ("B Warrants"). Each A Warrant and each B Warrant
entitles the holder to purchase one share of the Company's Common Stock; and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
Section 1. CERTIFICATION. For value received, the Warrant Holder or
its registered assign ("Holder") is entitled to purchase from the Company,
subject to the provisions of this Warrant Agreement, fully paid, validly issued
and nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a
<PAGE>
registration statement covering the Warrant Shares (as defined herein) under the
Securities Act is declared effective by the Securities and Exchange Commission
("Effective Registration Date"), and terminating at 5:00 P.M. Los Angeles time
21 months thereafter. The number of shares of Common Stock to be received upon
the exercise of the Warrant and the price to be paid for each share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares of
Common Stock deliverable upon such exercise, and as adjusted from time to time,
are hereinafter sometimes referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the
Purchase Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this
Agreement, each Holder shall have the right, which may be exercised commencing
on the Effective Registration Date and terminating at 5:00 PM. Los Angeles time
21 months thereafter, to purchase from the Company the number of fully paid and
nonassessable shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants.
4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the
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Warrant Agent shall promptly issue and cause to be delivered to or as directed
by the Holder, and in such name or names as the Holder may designate, a
Certificate for the number of full shares purchased upon the exercise of the
Warrant, together with cash as provided in Section 8 hereof; for any fractional
shares otherwise issuable upon such exercise. Such Certificate shall be deemed
to have been issued, and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares, as of the date of the
surrender of such Warrant and payment of the Aggregate Exercise Price; provided,
however, that if, at the date of surrender of such Warrant and payment of such
Aggregate Exercise Price, the transfer books for the shares or other class of
stock purchasable upon the exercise of such Warrant shall be closed, the
certificates for the shares with respect to which such Warrant is then exercised
shall be issuable as of the date on which such books shall next be opened and
until such date the Company shall be under no duty to deliver any certificate
for such shares; provided further, however, that the transfer books of record,
unless otherwise required by law, shall not be closed at any one time for a
period longer than twenty (20) days. The rights of purchase represented by the
Warrants shall be exercisable, at the election of the Holders thereof, either in
full or from time to time in part, and in the event that a Warrant Certificate
is exercised to purchase less than all of the shares purchasable on such
exercise at any time prior to the date of expiration of the Warrants, a new
Certificate evidencing the remaining shares available for purchase will be
issued, and the Company is hereby irrevocably authorized to sign and to deliver
the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of shares upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable with respect to any transfer
involved in the issue or delivery of any Warrants or certificates for shares in
a name other than that of the registered Holder of Warrants with respect to
which such shares are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction of
the Company of such mutilation, loss, theft or destruction of such Certificate
and indemnity, if requested, also to the reasonable satisfaction of the Company.
An applicant for such a substitute Warrant Certificate shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and
the Company shall at all times keep reserved, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the rights of purchase represented by the outstanding Warrants.
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7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall
have the right, except as limited by law, other agreement or herein, to purchase
or otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a
call of this Warrant ("Call Notice") at any time after the Effective
Registration Date, but prior to the expiration of this Warrant, by written
notice to Warrant Holder, provided only that the Closing Price (hereinafter
defined) of the Company's Common Stock has theretofore equalled or exceeded
Forty-Five Cents ($0.45) per Share for ten (10) consecutive Trading Days after
the Effective Registration Date. This Warrant shall expire and become null and
void thirty (30) days after the issuance of the Call Notice. The Warrant Holder
may exercise this Warrant and purchase some or all of the Shares then subject to
this Warrant within said thirty (30)-day period, but may not thereafter exercise
this Warrant or purchase any of the Shares. If the Warrant is not exercised
within said thirty (30) day period, the Company will have the right to redeem
any or all outstanding and unexercised Warrants at a redemption price of $0.001
per Warrant. For purposes of this Section 7.3, "Closing Price" means (a) if the
Common Stock is then listed on an established stock exchange or exchanges, the
average bid and ask price per share for each Trading Day on the principal
exchange on which the Common Stock is traded, as reported in The Wall Street
Journal; or (b) if the Common Stock is not then listed on an exchange, the price
per share for the Common Stock in the over-the-counter market as quoted on
NASDAQ (either National Market System or Small Cap Issues or the OTC Electronic
Bulletin Board), for each Trading Day, as reported in The Wall Street Journal.
If the Common Stock is not then listed on an exchange or quoted on NASDAQ or the
OTC Electronic Bulletin Board, the Common Stock shall be deemed to have a
Closing Price of less than Forty-Five Cents ($0.45) per share on such Trading
Day. For purposes of this Section 7.3, the term "Trading Day" shall mean a day
on which the New York Stock Exchange is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment, the Exercise Price shall be
$0.30 per share. The product of the Exercise Price times the number of shares
the Holder then elects to purchase is herein referred to as the "Aggregate
Exercise Price."
Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or in equity, and the rights of the Holder are limited to those expressed herein
and in the Warrant Certificate and are not enforceable against the Company
except to the extent set forth herein and therein.
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Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock as
interest on preferred stock), subdivide (split) its outstanding shares of Common
Stock, combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute as a stock dividend to holders of its Common Stock
any securities of the Company or of another entity, the number of shares of
Common Stock or other securities the Holder hereof is entitled to purchase
pursuant to the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive upon exercise the number of shares of Common
Stock or other securities which he, she or it would have owned or would have
been entitled to receive after the happening of any of the events described
above had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The Holder shall be entitled to participate in any subscription or other rights
offering made to holders of Common Stock as if he, she or it had purchased the
full number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
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11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all actions
necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
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13.1 RESTRICTED SECURITIES. The Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or
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omission in reliance upon written information furnished to the Company by such
Holder or underwriter and stated to be specifically for use therein. It is
agreed that the indemnity agreement contained in this Section 16.1 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent has not been unreasonably withheld).
14.2 Each Holder will, if Warrant Shares held by him, her or
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this
Section 16 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefor, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 16, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
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claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.
14.4 If the indemnification provided for in this Section 16
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
Section 16. DELAY OF REGISTRATION. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Agreement, without the approval of any Holder, in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or
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inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrants and which shall not adversely affect the interest of the
Holders, or as provided herein. The Company will notify Warrant Holder of any
such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any
Holder to the Company, shall be in writing and shall be mailed or delivered to
the Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will
not merge or consolidate with or into any other corporation unless the
corporation resulting from such merger or consolidation (if not the Company)
shall expressly assume, by supplemental agreement satisfactory in form to the
Warrant Agent and executed and delivered to the Company, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
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Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Mark Beychok
______________________________
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
Frank Hariton
______________________________
Signature
By: ________________________
Its: ________________________
By: ________________________
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CERTIFICATE NO. VPS-1B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK WARRANT
TO PURCHASE 66,667 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Frank Hariton or registered
assigns ("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL
CORPORATION, INC. a Delaware corporation, ("Company"), up to Sixty-Six Thousand
Six Hundred Sixty-Seven (66,667), fully paid and nonassessable shares of common
stock of the Company ("Common Stock"), at any time commencing one year after a
registration statement covering the Warrant Shares (as defined in the Warrant
Agreement referred to herein) under the Securities Act of 1933, as amended, has
been declared effective by the Securities and Exchange Commission and
terminating at 5:00 P.M. Los Angeles time 21 months thereafter, at the purchase
price of $0.30 per share ("Exercise Price") (pending adjustment), as provided in
Section 1 of a the Warrant Agreement. This Warrant is issued pursuant to the
Warrant Agreement made by the Company dated November 30, 1995 in favor of all
Warrant Holders ("Warrant Agreement") and is subject to all the terms thereof,
including the limitations on transferability set forth in Section 13 thereof.
The Holder accepts the terms and provisions of the Warrant Agreement by
acceptance of this Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ MARK BEYCHOK
___________________________________
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated _________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VPS-1B to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _____________________________________________________________________
(please type or print in block letters)
Address: _____________________________________________________________________
Signature:_____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: _____________________________________________________________________
Address: _____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VPS-1B to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature:________________________
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EXHIBIT 99.17
AGREEMENT
THIS AGREEMENT is made as of this twenty-second day of December 1995, between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, with its principal
offices at 1800 Avenue of the Stars, Suite 480, Los Angeles, California
90067 (hereinafter "Vitafort" or the "Company"), and LARRY BRUCIA, an
individual (hereinafter "Brucia")
RECITALS
WHEREAS, Brucia is employed as an executive of Vitafort in the normal
course of business (hereinafter the "Employment Relationship") ; and
WHEREAS, Brucia has voluntarily deferred a portion of his salary since
April 1995, the accrued total of deferred wages as of November 2, 1995 being
$13,200 and
WHEREAS, the Board of Directors has ratified and approved an offer for
Management to convert all deferred wages as of November 2, 1995 into equity at
the same rate as the recent Bridge Equity Offering (One share of Vitafort
International Corporation common stock for each 12CENTS of deferred salary, plus
1/2 warrant to purchase a share of common stock at 22 1/2CENTS and 1/2 warrant
to purchase a share of common stock at 30CENTS).
WHEREAS, Brucia and Vitafort desire to pay the deferred wages by
offsetting the amount due Brucia against a comparable purchase of equity in
Vitafort.
NOW THEREFORE, and in consideration for the foregoing facts and mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. INCORPORATION OF RECITALS
The Recitals above stated are incorporated by reference as if fully set
forth herein.
2. PURCHASE OF EQUITY/PAYMENT OF DEFERRED WAGES
The parties agree that the purchase of 110,000 shares of common stock,
55,000 A warrants, and 55,000 B warrants identical to those issued in the
Bridge Equity Offering shall be fully paid in all respects (a) by
offsetting the purchase against the salary Vitafort owes Brucia as of
November 2, 1995, and (b) Brucia shall have no further liability under and
pursuant to payment.
3. ACKNOWLEDGMENT OF PAYMENT AND RELEASE
Vitafort acknowledges that it has been paid the full for the equity
purchase amount and Brucia acknowledges that he has been paid an equal
amount to be applied against salary owed Brucia for 1995. Vitafort
releases and discharges Brucia and his successors, executors,
administrators, heirs and assigns from any liability with respect to the
purchase cost. It is expressly understood and agreed by Vitafort that the
release referred to in this paragraph extends to all claims, whether known
or unknown or suspected. Vitafort hereby waives the provisions of Civil
Code Section 1542 which provides:
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"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release which, if known by him,
must have materially affected the settlement with the
debtor."
4. REPRESENTATIONS BY THE PARTIES
Each of the parties warrants and represents to the other party that neither
of them has assigned, sold or transferred, or purported to assign, sell or
transfer, to any person not a party to this agreement any matter, or part
of any matter, covered by this Agreement. Each of the parties agrees to
indemnify and hold harmless the other party from and against any claim,
demand, damage, debt, liability, cost, expense, lien, action or cause of
action, including attorneys' fees and costs based upon or arising out of
any breach of any warranty or representation.
Larry Brucia confirms he has read and understands the content of the
subscription agreement prepared for the Bridge Equity Offering.
Vitafort agrees to register the shares purchased, and the shares underlying
the warrants, as part of the very next registration using S1, S3, or S8
filings with the SEC.
5. MODIFICATION
No variation, amendment or modification of this Agreement or waiver of any
of the terms or provisions thereof shall be deemed valid unless in writing
as an amendment hereto signed by the parties hereto.
6. NO ASSIGNMENT OF CLAIMS
Each releasing party represents and warrants to each released party that it
has not heretofore voluntarily, by operation of law or otherwise, assigned,
transferred, encumbered or conveyed or purported to assign, transfer,
encumber or convey to any person or entity any claim, debt, demand,
liability, obligation, account, reckoning, cost, expense, lien, action
or cause of action purportedly released pursuant to Paragraph 7 of this
Agreement. Each party hereto shall defend and indemnify the other party
hereto for any breach of the aforementioned representations and
warranties.
7. INTEGRATION
This Agreement constitutes the entire agreement and sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, covenants, arrangements,
communications, correspondence, representations or warranties, whether oral
or written, and this Agreement may not be modified, amended or terminated
except by a writing signed by Vita fort, Brucia, and any other party to be
charged.
8. EXECUTION OF ADDITIONAL DOCUMENTS
The parties hereto agree to execute such additional documents as may be
necessary to implement the terms of this Agreement
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9. INTEGRITY OF AGREEMENT
(a) The terms of this Agreement are contractual and not mere recital.
This Agreement is the result of negotiation between the parties, each of
whom has participated in the drafting hereof through its or his respective
attorneys.
(b) This Agreement has been carefully reviewed by each party, with full
understanding thereof, and voluntary execution thereof without duress or
coercion is hereby acknowledged.
(c) Each party hereto agrees that it or he will not take any action which
would interfere with the performance of this Agreement by any other party
hereto or which would adversely affect any of the rights provided for
herein.
(d) Each party hereto covenants and agrees not to bring any claim,
action, suit or proceeding against any other party hereto, directly or
indirectly, regarding any of the released claims, and each party further
covenants and agrees that this Agreement is a bar to any such claim,
action, suit or proceeding. However, this subparagraph shall not bar any
claim, action, suit or proceeding to enforce or interpret, on this
Agreement arising out of the obligations of any party provided herein.
10. HEIRS, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of, and shall be binding upon the
heirs, successors and assigns of the parties hereto, and each of them.
11. SEVERABILITV
In the event that any material provision of this Agreement should be held
to be voidable or unenforceable, the remaining portions hereof shall remain
in force and effect.
12. GOVERNING LAW/VENUE/SERVICE JURISDICTION
(a) This Agreement shall be construed in accordance with, and shall be
governed by the laws of the State of California.
(b) Venue for any litigation or arbitration arising out of any claim or
dispute to enforce or interpret this Agreement shall be in the County of
Los Angeles, State of California.
(c) Vitafort and Brucia each agrees to submit to the jurisdiction of all
Federal and State Courts in the State of California.
13. ATTORNEYS' FEES AND COSTS
In the event of any dispute arising out this Agreement or to enforce any of
its terms, the prevailing party in any legal proceeding shall be entitled
to recover all costs incurred in connection therewith, including but not
limited to reasonable attorneys' fees.
14. INDEMNIFICATION
The parties agree to defend and indemnify each other from any claims made,
arising out of or in connection with any breach of the representations or
agreements contained in this Agreement.
15. GENDER/PARAGRAPH HEADINGS
As used in this Agreement, the masculine, feminine or neuter gender, and
the singular or plural number shall each be deemed to include the others
whenever the context so indicates.
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16. REPRESENTATIVE CAPACITY
Each person executing this Agreement in a representative capacity
represents and warrants that he or she is empowered to do so. Each
corporate entity executing this Agreement represents and warrants that its
Board of Directors has resolved to execute this Agreement.
17. NOTICES
For purposes of notice to any party pursuant to this Agreement, notice
shall be in writing and may be made by personal service or telefax, and
deemed completed on the date of delivery or telefax, or by U.S. Mail, and
deemed completed three business days after deposit in the mail.
Notice to the Vitafort shall be to:
1800 Avenue of the Stars
Suite 480
Los Angeles, California 90067
Telefax (310) 556 1227
Notice to Brucia shall be to:
287 Crescent Road
San Anselmo, CA 94960
Changes of any of the foregoing addresses or telefax numbers may be
effected by providing written notice of same pursuant to this Paragraph 18.
18. Counterparts
This Agreement may be executed in counterparts and transmitted via
facsimile, and each such counterpart shall be deemed to be an original
executed document.
19. Execution
THIS AGREEMENT HAS BEEN CAREFULLY READ, REVIEWED, EVALUATED AND UNDERSTOOD
BY EACH OF THE UNDERSIGNED, AND IS HEREBY AGREED UPON.
IN WITNESS WHEREOF, we have set our hands and seals as of the day and year first
above written.
VITAFORT INTERNATIONAL CORPORATION LARRY BRUCIA
By /s/ Mark Beychok /s/ Larry Brucia
______________________________________ ____________________________
Mark Beychok, President Larry Brucia
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EXHIBIT 99.18
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK
WARRANT AGREEMENT
THIS CLASS A COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of Larry Brucia ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 15 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, which may be exercised commencing on the
Effective Registration Date and terminating at 5:00 PM. Los Angeles time 15
months thereafter, to purchase from the Company the number of fully paid and
nonassessable shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the Warrant Agent shall promptly issue
and cause to be delivered to or as directed by the Holder, and in such name or
names as the Holder may designate, a Certificate for the number of full shares
purchased upon the exercise of the Warrant, together with cash as provided in
Section 8 hereof; for any fractional shares otherwise issuable upon such
exercise. Such Certificate shall be deemed to have been issued, and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares, as of the date of the surrender of such Warrant and
payment of the Aggregate Exercise Price; provided, however, that if, at the date
of surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares with
respect to which such Warrant is then exercised shall be issuable as of the date
on which such books shall next be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided further,
however, that the transfer books of record, unless otherwise required by law,
shall not be closed at any one time for a period longer than twenty (20) days.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised to purchase less than
all of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction of
the Company of such mutilation, loss, theft or destruction of such Certificate
and indemnity, if requested, also to the reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a call
of this Warrant ("Call Notice") at any time after the Effective Registration
Date, but prior to the expiration of this Warrant, by written notice to Warrant
Holder, provided only that the Closing Price (hereinafter defined) of the
Company's Common Stock has theretofore equalled or exceeded Thirty-Three and
three-fourths Cents ($0.3375) per Share for ten (10) consecutive Trading Days
after the Effective Registration Date. This Warrant shall expire and become
null and void thirty (30) days after the issuance of the Call Notice. The
Warrant Holder may exercise this Warrant and purchase some or all of the Shares
then subject to this Warrant within said thirty (30)-day period, but may not
thereafter exercise this Warrant or purchase any of the Shares. If the Warrant
is not exercised within said thirty (30) day period, the Company will have the
right to redeem any or all outstanding and unexercised Warrants at a redemption
price of $0.0001 per Warrant. For purposes of this Section 7.3, "Closing Price"
means (a) if the Common Stock is then listed on an established stock exchange or
exchanges, the average bid and ask price per share for each Trading Day on the
principal exchange on which the Common Stock is traded, as reported in The Wall
Street Journal; or (b) if the Common Stock is not then listed on an exchange,
the price per share for the Common Stock in the over-the-counter market as
quoted on NASDAQ (either National Market System or Small Cap Issues or the OTC
Electronic Bulletin Board), for each Trading Day, as reported in The Wall Street
Journal. If the Common Stock is not then listed on an exchange or quoted on
NASDAQ or the OTC Electronic Bulletin Board, the Common Stock shall be deemed to
have a Closing Price of less than Thirty-Three and three-fourths Cents ($0.3375)
per share on such Trading Day. For purposes of this Section 7.3, the term
"Trading Day" shall mean a day on which the New York Stock Exchange is open for
trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,the Exercise Price shall be
$0.225 per share. The product of the Exercise Price times the number of shares
the Holder then elects to purchase is herein referred to as the "Aggregate
Exercise Price."
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Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock as
interest on preferred stock), subdivide (split) its outstanding shares of Common
Stock, combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute as a stock dividend to holders of its Common Stock
any securities of the Company or of another entity, the number of shares of
Common Stock or other securities the Holder hereof is entitled to purchase
pursuant to the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive upon exercise the number of shares of Common
Stock or other securities which he, she or it would have owned or would have
been entitled to receive after the happening of any of the events described
above had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The Holder shall be entitled to participate in any subscription or other rights
offering made to holders of Common Stock as if he, she or it had purchased the
full number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
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11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
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In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all actions
necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER APPLICABLE
STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and
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accountants and each person controlling such Holder, each such underwriter, and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability, or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability, or expense arises out of or is based on any untrue
statement or omission in reliance upon written information furnished to the
Company by such Holder or underwriter and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this Section
16.1 shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent has not been unreasonably withheld).
14.2 Each Holder will, if Warrant Shares held by him, her or
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this
Section 16 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the
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defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefor, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
16, to the extent such failure is not prejudicial. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
14.4 If the indemnification provided for in this Section 16
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
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(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
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Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Mark Beychok
_________________________________
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
Larry Brucia
By: /s/ Larry Brucia
________________________
Its: Vice President
________________________
By: ________________________
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CERTIFICATE NO. VBS-1A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK WARRANT
TO PURCHASE 55,000 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Larry Brucia or registered assigns
("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL CORPORATION,
INC. a Delaware corporation, ("Company"), up to Fifty Five Thousand (55,000),
fully paid and nonassessable shares of common stock of the Company ("Common
Stock"), at any time commencing one year after a registration statement covering
the Warrant Shares (as defined in the Warrant Agreement referred to herein)
under the Securities Act of 1933, as amended, has been declared effective by the
Securities and Exchange Commission and terminating at 5:00 P.M. Los Angeles time
15 months thereafter, at the purchase price of $0.225 per share ("Exercise
Price") (pending adjustment), as provided in Section 1 of a the Warrant
Agreement. This Warrant is issued pursuant to the Warrant Agreement made by the
Company dated November 30, 1995 in favor of all Warrant Holders ("Warrant
Agreement") and is subject to all the terms thereof, including the limitations
on transferability set forth in Section 13 thereof. The Holder accepts the
terms and provisions of the Warrant Agreement by acceptance of this Warrant
Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ Mark Beychok
______________________________
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated ______________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-1A to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _____________________________________________________________________
(please type or print in block letters)
Address: _____________________________________________________________________
Signature: ___________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: ______________________________________________________________________
Address: ___________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-1A to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
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EXHIBIT 99.19
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK
WARRANT AGREEMENT
THIS CLASS B COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of Larry Brucia ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 21 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, which may be exercised commencing on the
Effective Registration Date and terminating at 5:00 PM. Los Angeles time 21
months thereafter, to purchase from the Company the number of fully paid and
nonassessable shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the Warrant Agent shall promptly issue
and cause to be delivered to or as directed by the Holder, and in such name or
names as the Holder may designate, a Certificate for the number of full shares
purchased upon the exercise of the Warrant, together with cash as provided in
Section 8 hereof; for any fractional shares otherwise issuable upon such
exercise. Such Certificate shall be deemed to have been issued, and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares, as of the date of the surrender of such Warrant and
payment of the Aggregate Exercise Price; provided, however, that if, at the date
of surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares with
respect to which such Warrant is then exercised shall be issuable as of the date
on which such books shall next be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided further,
however, that the transfer books of record, unless otherwise required by law,
shall not be closed at any one time for a period longer than twenty (20) days.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised to purchase less than
all of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction of
the Company of such mutilation, loss, theft or destruction of such Certificate
and indemnity, if requested, also to the reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a call
of this Warrant ("Call Notice") at any time after the Effective Registration
Date, but prior to the expiration of this Warrant, by written notice to Warrant
Holder, provided only that the Closing Price (hereinafter defined) of the
Company's Common Stock has theretofore equalled or exceeded Forty-Five Cents
($0.45) per Share for ten (10) consecutive Trading Days after the Effective
Registration Date. This Warrant shall expire and become null and void thirty
(30) days after the issuance of the Call Notice. The Warrant Holder may
exercise this Warrant and purchase some or all of the Shares then subject to
this Warrant within said thirty (30)-day period, but may not thereafter exercise
this Warrant or purchase any of the Shares. If the Warrant is not exercised
within said thirty (30) day period, the Company will have the right to redeem
any or all outstanding and unexercised Warrants at a redemption price of $0.001
per Warrant. For purposes of this Section 7.3, "Closing Price" means (a) if the
Common Stock is then listed on an established stock exchange or exchanges, the
average bid and ask price per share for each Trading Day on the principal
exchange on which the Common Stock is traded, as reported in The Wall Street
Journal; or (b) if the Common Stock is not then listed on an exchange, the price
per share for the Common Stock in the over-the-counter market as quoted on
NASDAQ (either National Market System or Small Cap Issues or the OTC Electronic
Bulletin Board), for each Trading Day, as reported in The Wall Street Journal.
If the Common Stock is not then listed on an exchange or quoted on NASDAQ or the
OTC Electronic Bulletin Board, the Common Stock shall be deemed to have a
Closing Price of less than Forty-Five Cents ($0.45) per share on such Trading
Day. For purposes of this Section 7.3, the term "Trading Day" shall mean a day
on which the New York Stock Exchange is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,
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the Exercise Price shall be $0.30 per share. The product of the Exercise Price
times the number of shares the Holder then elects to purchase is herein referred
to as the "Aggregate Exercise Price."
Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock as
interest on preferred stock), subdivide (split) its outstanding shares of Common
Stock, combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute as a stock dividend to holders of its Common Stock
any securities of the Company or of another entity, the number of shares of
Common Stock or other securities the Holder hereof is entitled to purchase
pursuant to the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive upon exercise the number of shares of Common
Stock or other securities which he, she or it would have owned or would have
been entitled to receive after the happening of any of the events described
above had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The Holder shall be entitled to participate in any subscription or other rights
offering made to holders of Common Stock as if he, she or it had purchased the
full number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
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11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all
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actions necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
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13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or omission in reliance upon written information furnished
to the Company by such Holder or underwriter and stated to be specifically for
use therein. It is agreed that the indemnity agreement contained in this
Section 16.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent has not been unreasonably withheld).
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14.2 Each Holder will, if Warrant Shares held by him, her or
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this
Section 16 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefor, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 16, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the
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claim in question as an Indemnifying Party may reasonably request in writing and
as shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
14.4 If the indemnification provided for in this Section 16
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
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Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
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Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
______________________________
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
Larry Brucia
By: ________________________
Its: ________________________
By: ________________________
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CERTIFICATE NO. VBS-1B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK WARRANT
TO PURCHASE 55,000 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Larry Brucia or registered assigns
("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL CORPORATION,
INC. a Delaware corporation, ("Company"), up to Fifty-Five Thousand (55,000),
fully paid and nonassessable shares of common stock of the Company ("Common
Stock"), at any time commencing one year after a registration statement covering
the Warrant Shares (as defined in the Warrant Agreement referred to herein)
under the Securities Act of 1933, as amended, has been declared effective by the
Securities and Exchange Commission and terminating at 5:00 P.M. Los Angeles time
21 months thereafter, at the purchase price of $0.30 per share ("Exercise
Price") (pending adjustment), as provided in Section 1 of a the Warrant
Agreement. This Warrant is issued pursuant to the Warrant Agreement made by the
Company dated November 30, 1995 in favor of all Warrant Holders ("Warrant
Agreement") and is subject to all the terms thereof, including the limitations
on transferability set forth in Section 13 thereof. The Holder accepts the
terms and provisions of the Warrant Agreement by acceptance of this Warrant
Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
______________________________
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated _________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-1B to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: ______________________________________________________________________
(please type or print in block letters)
Address: ______________________________________________________________________
Signature: ____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: _____________________________________________________________________
Address: _____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-1B to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
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EXHIBIT 99.20
AGREEMENT
THIS AGREEMENT is made as of this twenty-second day of December 1995, between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, with its principal
offices at 1800 Avenue of the Stars, Suite 480, Los Angeles, California
90067 (hereinafter "Vitafort" or the "Company"), and MARK BEYCHOK, an
individual (hereinafter "Beychok")
RECITALS
WHEREAS, Beychok is employed as chief executive officer of Vitafort
pursuant to an Employment Agreement dated, December 1, 1993, by and between
Vitafort and Beychok (hereinafter the "Employment Agreement") ; and
WHEREAS, Beychok has voluntarily deferred a portion of his salary since the
beginning of his employment, the accrued total of deferred wages as of November
2, 1995 being $45,821 and
WHEREAS, the Board of Directors has ratified and approved an offer for
Management to convert all deferred wages as of November 2, 1995 into equity
at the same rate as the recent Bridge Equity Offering (One share of Vitafort
International Corporation common stock for each 12 CENTS of deferred salary,
plus 1/2 warrant to purchase a share of common stock at 22 1/2 CENTS and 1/2
warrant to purchase a share of common stock at 30 CENTS).
WHEREAS, Beychok and Vitafort desire to pay the deferred wages by
offsetting the amount due Beychok against a comparable purchase of equity in
Vitafort.
NOW THEREFORE, and in consideration for the foregoing facts and mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. INCORPORATION OF RECITALS
The Recitals above stated are incorporated by reference as if fully set
forth herein.
2. PURCHASE OF EQUITY/PAYMENT OF DEFERRED WAGES
The parties agree that the purchase of 381,842 shares of common stock,
190,921 A warrants, and 190,921 B warrants identical to those issued in the
Bridge Equity Offering shall be fully paid in all respects (a) by
offsetting the purchase against the salary Vitafort owes Beychok as of
November 2, 1995, and (b) Beychok shall have no further liability under and
pursuant to payment.
3. ACKNOWLEDGMENT OF PAYMENT AND RELEASE
Vitafort acknowledges that it has been paid the full for the equity
purchase amount and Beychok acknowledges that he has been paid an equal
amount to be applied against salary owed Beychok for 1995. Vitafort
releases and discharges Beychok and his successors, executors,
administrators, heirs and assigns from any liability with respect to the
purchase cost. It is expressly understood and agreed by Vitafort that the
release referred to in this paragraph extends to all claims, whether known
or unknown or suspected. Vitafort hereby waives the provisions of Civil
Code Section 1542 which provides:
PAGE 1 OF 4
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"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release which, if known by him,
must have materially affected the settlement with the
debtor."
4. REPRESENTATIONS BY THE PARTIES
Each of the parties warrants and represents to the other party that neither
of them has assigned, sold or transferred, or purported to assign, sell or
transfer, to any person not a party to this agreement any matter, or part
of any matter, covered by this Agreement. Each of the parties agrees to
indemnify and hold harmless the other party from and against any claim,
demand, damage, debt, liability, cost, expense, lien, action or cause of
action, including attorneys' fees and costs based upon or arising out of
any breach of any warranty or representation.
Mark Beychok confirms he has read and understands the content of the
subscription agreement prepared for the Bridge Equity Offering.
Vitafort agrees to register the shares purchased, and the shares underlying
the warrants, as part of the very next registration using S1, S3, or S8
filings with the SEC.
5. MODIFICATION
No variation, amendment or modification of this Agreement or waiver of any
of the terms or provisions thereof shall be deemed valid unless in writing
as an amendment hereto signed by the parties hereto.
6. NO ASSIGNMENT OF CLAIMS
Each releasing party represents and warrants to each released party that it
has not heretofore voluntarily, by operation of law or otherwise, assigned,
transferred, encumbered or conveyed or purported to assign, transfer,
encumber or convey to any person or entity any claim, debt, demand,
liability, obligation, account, reckoning, cost, expense, lien, action
or cause of action purportedly released pursuant to Paragraph 7 of this
Agreement. Each party hereto shall defend and indemnify the other party
hereto for any breach of the aforementioned representations and
warranties.
7. INTEGRATION
This Agreement constitutes the entire agreement and sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, covenants, arrangements,
communications, correspondence, representations or warranties, whether oral
or written, and this Agreement may not be modified, amended or terminated
except by a writing signed by Vita fort, Beychok, and any other party to be
charged.
8. EXECUTION OF ADDITIONAL DOCUMENTS
The parties hereto agree to execute such additional documents as may be
necessary to implement the terms of this Agreement
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9. INTEGRITY OF AGREEMENT
(a) The terms of this Agreement are contractual and not mere recital.
This Agreement is the result of negotiation between the parties, each of
whom has participated in the drafting hereof through its or his respective
attorneys.
(b) This Agreement has been carefully reviewed by each party, with full
understanding thereof, and voluntary execution thereof without duress or
coercion is hereby acknowledged.
(c) Each party hereto agrees that it or he will not take any action which
would interfere with the performance of this Agreement by any other party
hereto or which would adversely affect any of the rights provided for
herein.
(d) Each party hereto covenants and agrees not to bring any claim,
action, suit or proceeding against any other party hereto, directly or
indirectly, regarding any of the released claims, and each party further
covenants and agrees that this Agreement is a bar to any such claim,
action, suit or proceeding. However, this subparagraph shall not bar any
1claim, action, suit or proceeding to enforce or interpret, on this
Agreement arising out of the obligations of any party provided herein.
10. HEIRS, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of, and shall be binding upon
the heirs, successors and assigns of the parties hereto, and each of them.
11. SEVERABILITV
In the event that any material provision of this Agreement should be held
to be voidable or unenforceable, the remaining portions hereof shall
remain in force and effect.
12. GOVERNING LAW/VENUE/SERVICE JURISDICTION
(a) This Agreement shall be construed in accordance with, and shall be
governed by the laws of the State of California.
(b) Venue for any litigation or arbitration arising out of any claim or
dispute to enforce or interpret this Agreement shall be in the County of
Los Angeles, State of California.
(c) Vitafort and Beychok each agrees to submit to the jurisdiction of all
Federal and State Courts in the State of California.
13. ATTORNEYS' FEES AND COSTS
In the event of any dispute arising out this Agreement or to enforce any
of its terms, the prevailing party in any legal proceeding shall be
entitled to recover all costs incurred in connection therewith, including
but not limited to reasonable attorneys' fees.
14. INDEMNIFICATION
The parties agree to defend and indemnify each other from any claims made,
arising out of or in connection with any breach of the representations or
agreements contained in this Agreement.
15. GENDER/PARAGRAPH HEADINGS
As used in this Agreement, the masculine, feminine or neuter gender, and
the singular or plural number shall each be deemed to include the others
whenever the context so indicates.
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<PAGE>
16. REPRESENTATIVE CAPACITY
Each person executing this Agreement in a representative capacity
represents and warrants that he or she is empowered to do so. Each
corporate entity executing this Agreement represents and warrants that its
Board of Directors has resolved to execute this Agreement.
17. NOTICES
For purposes of notice to any party pursuant to this Agreement, notice
shall be in writing and may be made by personal service or telefax, and
deemed completed on the date of delivery or telefax, or by U.S. Mail, and
deemed completed three business days after deposit in the mail.
Notice to the Vitafort shall be to:
1800 Avenue of the Stars
Suite 480
Los Angeles, California 90067
Telefax (310) 556 1227
Notice to Beychok shall be to:
1800 Avenue of the Stars
Suite 480
Los Angeles, California 90067
Telefax (310) 556 1227
Changes of any of the foregoing addresses or telefax numbers may be
effected by providing written notice of same pursuant to this Paragraph 18.
18. Counterparts
This Agreement may be executed in counterparts and transmitted via
facsimile, and each such counterpart shall be deemed to be an original
executed document.
19. Execution
THIS AGREEMENT HAS BEEN CAREFULLY READ, REVIEWED, EVALUATED AND UNDERSTOOD
BY EACH OF THE UNDERSIGNED, AND IS HEREBY AGREED UPON.
IN WITNESS WHEREOF, we have set our hands and seals as of the day and year first
above written.
VITAFORT INTERNATIONAL CORPORATION MARK BEYCHOK
By /s/ Eloy L. Ellis /s/ Mark Beychok
______________________________________ ____________________________
Eloy L. Ellis, Acting Chief Mark Beychok
Financial Officer
PAGE 4 OF 4
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EXHIBIT 99.21
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK
WARRANT AGREEMENT
THIS CLASS A COMMON STOCK WARRANT AGREEMENT is made as of December 30,
1995 ("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware
corporation ("Company"), in favor of Mark Beychok ("Warrant Holder" or
"Holder").
WHEREAS, the Company issued and sold in a non-public offering
("Offering") pursuant to Section 4(2) of the Securities Act of 1933, as
amended ("Securities Act") approximately 42 Units ("Unit"), each Unit
consisting of 125,000 shares of the Company's Common Stock, $.0001 par value,
62,500 Class A Common Stock Purchase Warrants ("A Warrants") and 62,500 Class
B Common Stock Purchase Warrants ("B Warrants"). Each A Warrant and each B
Warrant entitles the holder to purchase one share of the Company's common
stock, $.0001 par value ("Common Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or
wages) into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the
Warrant Holder that the Company establish the terms and conditions upon which
the Warrants may be issued, exercised and redeemed, and other matters as
provided herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants,
and the rights and obligations of the Company and the Warrant Holder with
respect thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or
its registered assign ("Holder") is entitled to purchase from the Company,
subject to the provisions of this Warrant Agreement, fully paid, validly
issued and nonassessable shares of the Company's Common Stock at the Exercise
Price (as defined herein) commencing one year after a registration statement
covering the Warrant Shares (as defined herein) under the Securities Act is
declared effective by the Securities and Exchange Commission ("Effective
Registration Date"), and terminating at 5:00 P.M. Los Angeles time 15 months
thereafter. The number of shares of Common Stock to be received upon the
exercise of the Warrant and the price to be paid for each share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise, and as adjusted from time to
time, are hereinafter sometimes referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the
Purchase Form shall be substantially as set forth in Exhibit A attached
hereto (collectively, the "Warrant Certificates"). The Exercise Price (as
defined in Section 8) and the number of shares issuable upon exercise of each
Warrant are subject to adjustment upon the occurrence of certain events, all
as hereinafter provided. The Warrant Certificates shall be executed on
behalf of the Company by its Chairman of the Board, President or one of its
Vice Presidents, and attested to by its Secretary or an Assistant Secretary.
The signature of any of such officers on the Warrant Certificates may be
manual or facsimile. Warrant Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any
one of them shall have ceased to hold such offices prior to the delivery of
such Warrant Certificates or did not hold such offices on the date of this
Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant
Certificate may be exchanged for another Certificate entitling the Holder
thereof to purchase a like aggregate number of shares as the Certificate
surrendered then entitled such Holder to purchase. Any Holder desiring to
exchange a Warrant Certificate shall make such request in writing delivered
to the Company, and shall surrender, properly endorsed, the Certificate to be
so exchanged. Thereupon, the Company shall countersign and deliver to the
person entitled thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of
this Agreement, each Holder shall have the right, which may be exercised
commencing on the Effective Registration Date and terminating at 5:00 PM. Los
Angeles time 15 months thereafter, to purchase from the Company the number of
fully paid and nonassessable shares which the Holder may at the time be
entitled to purchase on exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be
exercised upon surrender to the Company ("Warrant Agent") at its office at
Los Angeles, California of the Certificate evidencing the Warrant to be
exercised, together with the Purchase Form attached hereto as Exhibit A, duly
filled in and signed, and upon payment to the Warrant Agent of the Aggregate
Exercise Price (as defined in and determined in accordance with the
provisions of Sections 8 and 11 hereof) for the number of shares with respect
to which such Warrant is then exercised. Payment of the Aggregate Exercise
Price shall be made in cash or by check. Subject to Section 4 hereof, upon
the surrender of the Warrant and payment of the Aggregate Exercise Price, the
Warrant Agent shall promptly issue and cause to be delivered to or as
directed by the Holder, and in such name or names as the Holder may
designate, a Certificate for the number of full shares purchased upon the
exercise of the Warrant, together with cash as provided in Section 8 hereof;
for any fractional shares otherwise issuable upon such exercise. Such
Certificate shall be deemed to have been issued, and any person so designated
to be named therein shall be deemed to have become a holder of record of such
shares, as of the date of the surrender of such Warrant and payment of the
Aggregate Exercise Price; provided, however, that if, at the date of
surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares
with respect to which such Warrant is then exercised shall be issuable as of
the date on which such books shall next be opened and until such date the
Company shall be under no duty to deliver any certificate for such shares;
provided further, however, that the transfer books of record, unless
otherwise required by law, shall not be closed at any one time for a period
longer than twenty (20) days. The rights of purchase represented by the
Warrants shall be exercisable, at the election of the Holders thereof, either
in full or from time to time in part, and in the event that a Warrant
Certificate is exercised to purchase less than all of the shares purchasable
on such exercise at any time prior to the date of expiration of the Warrants,
a new Certificate evidencing the remaining shares available for purchase will
be issued, and the Company is hereby irrevocably authorized to sign and to
deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes, if any, attributable to the initial issuance of shares upon the
exercise of Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable with respect to any
transfer involved in the issue or delivery of any Warrants or certificates
for shares in a name other than that of the registered Holder of Warrants
with respect to which such shares are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent right or interest; but only upon receipt of evidence to the
reasonable satisfaction of the Company of such mutilation, loss, theft or
destruction of such Certificate and indemnity, if requested, also to the
reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other
reasonable charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF WARRANTS.
7.1 RESERVATION OF SHARES. There have been
reserved, and the Company shall at all times keep reserved, out of its
authorized Common Stock, a number of shares of Common Stock sufficient to
provide for the exercise of the rights of purchase represented by the
outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The
Company shall have the right, except as limited by law, other agreement or
herein, to purchase or otherwise acquire Warrants at such times, in such
manner and for such consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may
issue a call of this Warrant ("Call Notice") at any time after the Effective
Registration Date, but prior to the expiration of this Warrant, by written
notice to Warrant Holder, provided only that the Closing Price (hereinafter
defined) of the Company's Common Stock has theretofore equalled or exceeded
Thirty-Three and three-fourths Cents ($0.3375) per Share for ten (10)
consecutive Trading Days after the Effective Registration Date. This Warrant
shall expire and become null and void thirty (30) days after the issuance of
the Call Notice. The Warrant Holder may exercise this Warrant and purchase
some or all of the Shares then subject to this Warrant within said thirty
(30)-day period, but may not thereafter exercise this Warrant or purchase any
of the Shares. If the Warrant is not exercised within said thirty (30) day
period, the Company will have the right to redeem any or all outstanding and
unexercised Warrants at a redemption price of $0.0001 per Warrant. For
purposes of this Section 7.3, "Closing Price" means (a) if the Common Stock
is then listed on an established stock exchange or exchanges, the average bid
and ask price per share for each Trading Day on the principal exchange on
which the Common Stock is traded, as reported in The Wall Street Journal; or
(b) if the Common Stock is not then listed on an exchange, the price per
share for the Common Stock in the over-the-counter market as quoted on NASDAQ
(either National Market System or Small Cap Issues or the OTC Electronic
Bulletin Board), for each Trading Day, as reported in The Wall Street
Journal. If the Common Stock is not then listed on an exchange or quoted on
NASDAQ or the OTC Electronic Bulletin Board, the Common Stock shall be deemed
to have a Closing Price of less than Thirty-Three and three-fourths Cents
($0.3375) per share on such Trading Day. For purposes of this Section 7.3,
the term "Trading Day" shall mean a day on which the New York Stock Exchange
is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may
be purchased upon exercise of Warrants in effect at any time, and as adjusted
from time to time as provided in Section 11 of this Agreement, is referred to
herein as the "Exercise Price." Subject to adjustment,the Exercise Price
shall be $0.225 per share. The product of the Exercise Price times the
number of shares the Holder then elects to purchase is herein referred to as
the "Aggregate Exercise Price."
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Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at
law or in equity, and the rights of the Holder are limited to those expressed
herein and in the Warrant Certificate and are not enforceable against the
Company except to the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The
number and kind of securities purchasable upon the exercise of each Warrant
and the Exercise Price shall be subject to adjustment from time to time upon
the happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the
Company shall pay a dividend in shares of its Common Stock (other than
payments of Common Stock as interest on preferred stock), subdivide (split)
its outstanding shares of Common Stock, combine (reverse split) its
outstanding shares of Common Stock, issue by reclassification of its shares
of Common Stock any shares or other securities of the Company, or distribute
as a stock dividend to holders of its Common Stock any securities of the
Company or of another entity, the number of shares of Common Stock or other
securities the Holder hereof is entitled to purchase pursuant to the Warrants
immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive upon exercise the number of shares of Common Stock or
other securities which he, she or it would have owned or would have been
entitled to receive after the happening of any of the events described above
had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in such number and/or price; and
provided further, however, that any adjustments which by reason of this
Section 11 are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. An adjustment made pursuant to
this Section 11 shall become effective immediately after the record date in
the case of a stock dividend or other distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification. The Holder shall be entitled to participate
in any subscription or other rights offering made to holders of Common Stock
as if he, she or it had purchased the full number of shares as to which the
Warrant remains unexercised immediately prior to the record date for such
rights offering.
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11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY.
The Company may at its option at any time during the term of the Warrants,
reduce the then current Exercise Price to any amount deemed appropriate by
the Board of Directors of the Company.
11.3 NOTICE OF ADJUSTMENT. Whenever the
number of shares purchasable upon the exercise of each Warrant or the
Exercise Price of such shares is adjusted, as herein provided, the Company
shall mail by first class mail, postage prepaid, to each Holder notice of
such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except
as provided in subsection 11.1, no adjustment in respect of any dividends
shall be made during the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON
RECLASSIFICATION, CONSOLIDATION, ETC. In case of any consolidation of the
Company with or merger of the Company into another corporation or in case of
any sale or conveyance to another corporation of the property of the Company
as an entirety or substantially as an entirety, the Company or such successor
or purchasing corporation, as the case may be, shall execute an agreement
that each Holder shall have the right thereafter upon payment of the Warrant
Price in effect immediately prior to such action to purchase upon exercise of
each Warrant the kind and amount of shares and other securities and property
which he, she or it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale or conveyance had such
Warrant been exercised immediately prior to such action. The Company shall
mail by first class mail, postage prepaid, to each Holder, notice of the
execution of any such agreement. Such agreement shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 11. The provisions of this subsection 11.5
shall similarly apply to successive consolidations, mergers, sales or
conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective
of any adjustments in the Exercise Price or the number or kind of shares
purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind
of shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights
and obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
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In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all actions
necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this
Section 13 shall be binding upon any transferee of the Warrants and upon each
holder of Warrant Shares. As used in this Section 13, the term "Warrant
Shares" includes any shares of the Company's Common Stock or other
securities, issued in respect of the Warrant Shares pursuant to any stock
split, stock dividend, recapitalization or otherwise; and the term "Warrant"
includes any Warrant Certificate or Certificates issued in exchange for the
original Warrant Certificate.
13.1 RESTRICTED SECURITIES. The Warrants
and Warrant Shares have not been registered under the Securities Act of 1933,
as amended, ("Securities Act") or the securities laws of any states and will
be offered and sold in reliance on exemptions from the registration
requirement of such laws. The Warrants and Warrant Shares are deemed to be
"restricted securities" as that term is defined under Rule 144 promulgated
under the Securities Act, because the Warrants will be issued and sold by the
Company in private transactions not involving a public offering. In general,
under Rule 144 as currently in effect, subject to the satisfaction of certain
other conditions, a person, including an affiliate of the Company (or persons
whose shares are aggregated), who has owned restricted shares of Common Stock
beneficially for at least two years is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1%
of the total number of outstanding shares of the same class or, if the Common
Stock is quoted on NASDAQ, the average weekly trading volume during the four
calendar weeks preceding the sale. A person who has held the securities for
at least three years and who has not been an affiliate of the Company for at
least three months immediately prior to a proposed sale is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above.
13.2 LEGEND RESTRICTION. The Company shall
cause the following legend to be set forth on each Warrant Certificate and
certificates representing the Warrant Shares unless counsel for the Company
is of the opinion as to any such certificates that such legend is unnecessary:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER APPLICABLE
STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
13.3 NOTICE OF PROPOSED TRANSFER. Prior to
any proposed transfer of the Warrants or of the Warrant Shares, the Holder
thereof shall give written notice to the Company stating such Holder's
intention to effect such transfer and describing the circumstances of the
proposed transfer in sufficient detail, accompanied by either (i) an opinion
of counsel reasonably satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities
Act, or (ii) a "no action" letter from the staff of the Securities and
Exchange Commission ("Commission") to the effect that the staff will not
recommend that enforcement action be taken if the proposed transfer is
effected without registration. Subject to evidence of compliance with any
applicable state securities or "blue sky" law or laws, the Company shall
promptly notify the Holder in writing that such Holder may proceed with its
transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against
the Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each
Holder, each of its officers, directors and partners, legal counsel, and
accountants and each person controlling such Holder within the meaning of
Section 18 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Agreement,
and each underwriter, if any, and each person who controls within the meaning
of Section 18 of the Securities Act any underwriter, against all expenses,
claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder, each of
its officers, directors, partners, legal counsel, and
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accountants and each person controlling such Holder, each such underwriter,
and each person who controls any such underwriter, for any legal and any
other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability, or expense arises out of or is
based on any untrue statement or omission in reliance upon written
information furnished to the Company by such Holder or underwriter and stated
to be specifically for use therein. It is agreed that the indemnity
agreement contained in this Section 16.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent has
not been unreasonably withheld).
14.2 Each Holder will, if Warrant Shares
held by him, her or it are included in the securities as to which such
registration, qualification, or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, legal counsel, and
accountants and each underwriter, if any, of the Company's securities covered
by such a registration statement, each person who controls the Company or
such underwriter within the meaning of Section 18 of the Securities Act, each
other such Holder and Other Stockholder, and each of their officers,
directors, and partners, and each person controlling such Holder or Other
Stockholder, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular, or other document, or
any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other
Stockholders, directors, officers, partners, legal counsel, and accountants,
persons, underwriters, or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided that
in no event shall any indemnity under this Section 16 exceed the gross
proceeds from the offering received by such Holder.
14.3 Each party entitled to indemnification
under this Section 16 ("Indemnified Party") shall give notice to the party
required to provide indemnification ("Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume
the
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defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefor, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 16, to the extent such failure is not
prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement that does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
14.4 If the indemnification provided for in
this Section 16 is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss, liability,
claim, damage, or expense referred to therein, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party hereunder, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and of the Indemnified Party on the other in connection with the
statement or omissions that resulted in such loss, liability, claim, damage,
or expense as well as any other relevant equitable considerations; provided,
however that in no event shall any contribution by a Holder under this
Section 16.4 exceed the gross proceeds from the offering received from such
Holder. The relative fault of the Indemnifying Party and of the Indemnified
Party shall be determined by 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 Indemnifying
Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in
the underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
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(a) Make and keep public information regarding the
Company available as those terms are understood and defined in Rule 144 under
the Securities Act; and
(b) File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act
and the Securities Exchange Act of 1934 at any time after it has become
subject to such reporting requirements.
Section 16. DELAY OF REGISTRATION. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Agreement, without the approval of any Holder,
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company may deem necessary or desirable
and which shall not be inconsistent with the provisions of the Warrants and
which shall not adversely affect the interest of the Holders, or as provided
herein. The Company will notify Warrant Holder of any such supplement or
amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall
bind and inure to the benefit of the Company and the Warrant Holders, and
their respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any
Holder to the Company, shall be in writing and shall be mailed or delivered
to the Company at its office at 1800 Avenue of the Stars, Suite 480, Los
Angeles, California 90067. Any notice mailed pursuant to this Agreement by
the Company to the Holders shall be in writing and shall be mailed or
delivered to such Holders at their respective addresses on the books of the
Warrant Agent. Each party hereto may from time to time change the address to
which notices to it are to be delivered or mailed hereunder by notice in
writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will
not merge or consolidate with or into any other corporation unless the
corporation resulting from such merger or consolidation (if not the Company)
shall expressly assume, by supplemental agreement satisfactory in form to the
Warrant Agent and executed and delivered to the Company, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
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Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of
the State of Delaware, without giving effect to principles of conflict of
laws.
Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company and the Warrant Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Eloy Ellis
---------------------------------
Eloy Ellis
Acting Chief Financial Officer
Accepted as of the date written above:
WARRANT HOLDER
Mark Beychok
By: /s/ Mark Beychok
------------------------
Its: ------------------------
By: ------------------------
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CERTIFICATE NO. VBS-2A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND
UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK WARRANT
TO PURCHASE 190,921 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Mark Beychok or registered
assigns ("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL
CORPORATION, INC. a Delaware corporation, ("Company"), up to One Hundred
Ninety Thousand Nine Hundred Twenty-One (190,921), fully paid and
nonassessable shares of common stock of the Company ("Common Stock"), at any
time commencing one year after a registration statement covering the Warrant
Shares (as defined in the Warrant Agreement referred to herein) under the
Securities Act of 1933, as amended, has been declared effective by the
Securities and Exchange Commission and terminating at 5:00 P.M. Los Angeles
time 15 months thereafter, at the purchase price of $0.225 per share
("Exercise Price") (pending adjustment), as provided in Section 1 of a the
Warrant Agreement. This Warrant is issued pursuant to the Warrant Agreement
made by the Company dated November 30, 1995 in favor of all Warrant Holders
("Warrant Agreement") and is subject to all the terms thereof, including the
limitations on transferability set forth in Section 13 thereof. The Holder
accepts the terms and provisions of the Warrant Agreement by acceptance of
this Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth
in the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of
this Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in
Section 8 of the Warrant Agreement) at the office of the Company ("Warrant
Agent"). Payment of the Aggregate Exercise Price shall be made at the option
of the Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be
countersigned and issued to the Holder a new Warrant in respect of the shares
of Common Stock as to which this Warrant shall not have been exercised. This
Warrant may be exchanged at the office of the Warrant Agent by surrender of
this Warrant Certificate, properly endorsed either separately or in
combination with one or more other Warrants, for one or more new Warrants
entitling the Holder thereof to purchase the same aggregate number of shares
as were purchased on exercise of the Warrant or Warrants exchanged. No
fractional shares will be issued upon the exercise of this Warrant, but the
Company shall pay the cash value of any fraction upon the exercise of one or
more Warrants. This Warrant is transferable at the office of the Warrant
Agent, in the manner and subject to the limitations set forth in the Warrant
Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent,
and all other persons dealing with this Warrant, as the absolute owner hereof
for any purpose and as the person entitled to exercise the rights represented
hereby, or to the transfer hereof on the books of the Company, any notice to
the contrary notwithstanding, and until such transfer on such books, the
Company may treat the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights
of a stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ ELOY ELLIS
----------------------------------
Eloy Ellis
Acting Chief Financial Officer
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Exhibit "A"
PURCHASE FORM
Dated ______________________
The undersigned hereby irrevocably elects to exercise the Warrant represented
by this Warrant Certificate No. VBS-2A to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: ____________________________________________________________________
(please type or print in block letters)
Address: ____________________________________________________________________
Signature: ____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: ____________________________________________________________________
Address: ____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-2A to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on
the books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
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EXHIBIT 99.22
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK
WARRANT AGREEMENT
THIS CLASS B COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of Mark Beychok ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 21 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, which may be exercised commencing on the
Effective Registration Date and terminating at 5:00 PM. Los Angeles time 21
months thereafter, to purchase from the Company the number of fully paid and
nonassessable shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the Warrant Agent shall promptly issue
and cause to be delivered to or as directed by the Holder, and in such name or
names as the Holder may designate, a Certificate for the number of full shares
purchased upon the exercise of the Warrant, together with cash as provided in
Section 8 hereof; for any fractional shares otherwise issuable upon such
exercise. Such Certificate shall be deemed to have been issued, and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares, as of the date of the surrender of such Warrant and
payment of the Aggregate Exercise Price; provided, however, that if, at the date
of surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares with
respect to which such Warrant is then exercised shall be issuable as of the date
on which such books shall next be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided further,
however, that the transfer books of record, unless otherwise required by law,
shall not be closed at any one time for a period longer than twenty (20) days.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised to purchase less than
all of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction of
the Company of such mutilation, loss, theft or destruction of such Certificate
and indemnity, if requested, also to the reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a call
of this Warrant ("Call Notice") at any time after the Effective Registration
Date, but prior to the expiration of this Warrant, by written notice to Warrant
Holder, provided only that the Closing Price (hereinafter defined) of the
Company's Common Stock has theretofore equalled or exceeded Forty-Five Cents
($0.45) per Share for ten (10) consecutive Trading Days after the Effective
Registration Date. This Warrant shall expire and become null and void thirty
(30) days after the issuance of the Call Notice. The Warrant Holder may
exercise this Warrant and purchase some or all of the Shares then subject to
this Warrant within said thirty (30)-day period, but may not thereafter exercise
this Warrant or purchase any of the Shares. If the Warrant is not exercised
within said thirty (30) day period, the Company will have the right to redeem
any or all outstanding and unexercised Warrants at a redemption price of $0.001
per Warrant. For purposes of this Section 7.3, "Closing Price" means (a) if the
Common Stock is then listed on an established stock exchange or exchanges, the
average bid and ask price per share for each Trading Day on the principal
exchange on which the Common Stock is traded, as reported in The Wall Street
Journal; or (b) if the Common Stock is not then listed on an exchange, the price
per share for the Common Stock in the over-the-counter market as quoted on
NASDAQ (either National Market System or Small Cap Issues or the OTC Electronic
Bulletin Board), for each Trading Day, as reported in The Wall Street Journal.
If the Common Stock is not then listed on an exchange or quoted on NASDAQ or the
OTC Electronic Bulletin Board, the Common Stock shall be deemed to have a
Closing Price of less than Forty-Five Cents ($0.45) per share on such Trading
Day. For purposes of this Section 7.3, the term "Trading Day" shall mean a day
on which the New York Stock Exchange is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,
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the Exercise Price shall be $0.30 per share. The product of the Exercise Price
times the number of shares the Holder then elects to purchase is herein referred
to as the "Aggregate Exercise Price."
Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock as
interest on preferred stock), subdivide (split) its outstanding shares of Common
Stock, combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute as a stock dividend to holders of its Common Stock
any securities of the Company or of another entity, the number of shares of
Common Stock or other securities the Holder hereof is entitled to purchase
pursuant to the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive upon exercise the number of shares of Common
Stock or other securities which he, she or it would have owned or would have
been entitled to receive after the happening of any of the events described
above had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The Holder shall be entitled to participate in any subscription or other rights
offering made to holders of Common Stock as if he, she or it had purchased the
full number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
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11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all
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actions necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION THEREUNDER AND UNDER APPLICABLE STATE LAW, THE
AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY.
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13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or omission in reliance upon written information furnished
to the Company by such Holder or underwriter and stated to be specifically for
use therein. It is agreed that the indemnity agreement contained in this
Section 16.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent has not been unreasonably withheld).
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14.2 Each Holder will, if Warrant Shares held by him, her or it
are included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this Section 16
("Indemnified Party") shall give notice to the party required to provide
indemnification ("Indemnifying Party") promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefor, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 16, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the
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claim in question as an Indemnifying Party may reasonably request in writing and
as shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
14.4 If the indemnification provided for in this Section 16 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
10
<PAGE>
Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
11
<PAGE>
Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Eloy Ellis
----------------------------------
Eloy Ellis
Acting Chief Financial Officer
Accepted as of the date written above:
WARRANT HOLDER
Mark Beychok
By: /s/ Mark Beychok
-------------------------
Its:
-------------------------
By:
-------------------------
12
<PAGE>
CERTIFICATE NO. VBS-2B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK WARRANT
TO PURCHASE 190,921 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Mark Beychok or registered assigns
("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL CORPORATION,
INC. a Delaware corporation, ("Company"), up to One Hundred Ninety Thousand Nine
Hundred Twenty-One (190,921), fully paid and nonassessable shares of common
stock of the Company ("Common Stock"), at any time commencing one year after a
registration statement covering the Warrant Shares (as defined in the Warrant
Agreement referred to herein) under the Securities Act of 1933, as amended, has
been declared effective by the Securities and Exchange Commission and
terminating at 5:00 P.M. Los Angeles time 21 months thereafter, at the purchase
price of $0.30 per share ("Exercise Price") (pending adjustment), as provided in
Section 1 of a the Warrant Agreement. This Warrant is issued pursuant to the
Warrant Agreement made by the Company dated November 30, 1995 in favor of all
Warrant Holders ("Warrant Agreement") and is subject to all the terms thereof,
including the limitations on transferability set forth in Section 13 thereof.
The Holder accepts the terms and provisions of the Warrant Agreement by
acceptance of this Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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<PAGE>
This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ Eloy Ellis
----------------------------------
Eloy Ellis
Acting Chief Financial Officer
3
<PAGE>
Exhibit "A"
PURCHASE FORM
Dated
------------------
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-2B to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
-------------------------------------------------------------------
(please type or print in block letters)
Address:
-------------------------------------------------------------------
Signature:
-------------------------------------------------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name:
--------------------------------------------------------------------
Address:
--------------------------------------------------------------------
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-2B to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date:
---------------------------------
Signature:
----------------------------
4
<PAGE>
EXHIBIT 99.23
AGREEMENT
THIS AGREEMENT is made as of this twenty-second day of December 1995, between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, with its principal
offices at 1800 Avenue of the Stars, Suite 480, Los Angeles, California
90067 (hereinafter "Vitafort" or the "Company"), and ELOY ELLIS, an individual
(hereinafter "Ellis")
RECITALS
WHEREAS, Ellis performs consulting services as an executive of Vitafort
pursuant to a Consulting Agreement dated, August 15, 1995, by and between
Vitafort and Ellis (hereinafter the "Consulting Agreement") ; and
WHEREAS, Ellis has voluntarily deferred a portion of his fees since the
beginning of his consulting, the accrued total of deferred fees as of November
2, 1995 being $6,600 and
WHEREAS, the Board of Directors has ratified and approved an offer for
Management and selected consultants to convert all deferred fees as of November
2, 1995 into equity at the same rate as the recent Bridge Equity Offering (One
share of Vitafort International Corporation common stock for each 12CENTS of
deferred fees, plus 1/2 warrant to purchase a share of common stock at 22
1/2CENTS and 1/2 warrant to purchase a share of common stock at 30CENTS).
WHEREAS, Ellis and Vitafort desire to pay the deferred fees by offsetting
the amount due Ellis against a comparable purchase of equity in Vitafort.
NOW THEREFORE, and in consideration for the foregoing facts and mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. INCORPORATION OF RECITALS
The Recitals above stated are incorporated by reference as if fully set
forth herein.
2. PURCHASE OF EQUITY/PAYMENT OF DEFERRED FEES
The parties agree that the purchase of 55,000 shares of common stock,
27,500 A warrants, and 27,500 B warrants identical to those issued in the
Bridge Equity Offering shall be fully paid in all respects (a) by
offsetting the purchase against the fees Vitafort owes Ellis as of November
2, 1995, and (b) Ellis shall have no further liability under and pursuant
to payment.
3. ACKNOWLEDGMENT OF PAYMENT AND RELEASE
Vitafort acknowledges that it has been paid the full for the equity
purchase amount and Ellis acknowledges that he has been paid an equal
amount to be applied against fees owed Ellis for 1995. Vitafort
releases and discharges Ellis and his successors, executors,
administrators, heirs and assigns from any liability with respect to the
purchase cost. It is expressly understood and agreed by Vitafort that the
release referred to in this paragraph extends to all claims, whether known
or unknown or suspected. Vitafort hereby waives the provisions of Civil
Code Section 1542 which provides:
PAGE 1 OF 4
<PAGE>
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release which, if known by him,
must have materially affected the settlement with the
debtor."
4. REPRESENTATIONS BY THE PARTIES
Each of the parties warrants and represents to the other party that neither
of them has assigned, sold or transferred, or purported to assign, sell or
transfer, to any person not a party to this agreement any matter, or part
of any matter, covered by this Agreement. Each of the parties agrees to
indemnify and hold harmless the other party from and against any claim,
demand, damage, debt, liability, cost, expense, lien, action or cause of
action, including attorneys' fees and costs based upon or arising out of
any breach of any warranty or representation.
Mark Ellis confirms he has read and understands the content of the
subscription agreement prepared for the Bridge Equity Offering.
Vitafort agrees to register the shares purchased, and the shares underlying
the warrants, as part of the very next registration using S1, S3, or S8
filings with the SEC.
5. MODIFICATION
No variation, amendment or modification of this Agreement or waiver of any
of the terms or provisions thereof shall be deemed valid unless in writing
as an amendment hereto signed by the parties hereto.
6. NO ASSIGNMENT OF CLAIMS
Each releasing party represents and warrants to each released party that it
has not heretofore voluntarily, by operation of law or otherwise, assigned,
transferred, encumbered or conveyed or purported to assign, transfer,
encumber or convey to any person or entity any claim, debt, demand,
liability, obligation, account, reckoning, cost, expense, lien, action
or cause of action purportedly released pursuant to Paragraph 7 of this
Agreement. Each party hereto shall defend and indemnify the other party
hereto for any breach of the aforementioned representations and
warranties.
7. INTEGRATION
This Agreement constitutes the entire agreement and sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, covenants, arrangements,
communications, correspondence, representations or warranties, whether oral
or written, and this Agreement may not be modified, amended or terminated
except by a writing signed by Vita fort, Ellis, and any other party to be
charged.
8. EXECUTION OF ADDITIONAL DOCUMENTS
The parties hereto agree to execute such additional documents as may be
necessary to implement the terms of this Agreement
PAGE 2 OF 4
<PAGE>
9. INTEGRITY OF AGREEMENT
(a) The terms of this Agreement are contractual and not mere recital.
This Agreement is the result of negotiation between the parties, each of
whom has participated in the drafting hereof through its or his
respective attorneys.
(b) This Agreement has been carefully reviewed by each party, with full
understanding thereof, and voluntary execution thereof without duress
or coercion is hereby acknowledged.
(c) Each party hereto agrees that it or he will not take any action which
would interfere with the performance of this Agreement by any other
party hereto or which would adversely affect any of the rights provided
for herein.
(d) Each party hereto covenants and agrees not to bring any claim,
action, suit or proceeding against any other party hereto, directly
or indirectly, regarding any of the released claims, and each party
further covenants and agrees that this Agreement is a bar to any such
claim, action, suit or proceeding. However, this subparagraph shall not
bar any claim, action, suit or proceeding to enforce or interpret, on
this Agreement arising out of the obligations of any party provided
herein.
10. HEIRS, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of, and shall be binding upon
the heirs, successors and assigns of the parties hereto, and each of
them.
11. SEVERABILITV
In the event that any material provision of this Agreement should be
held to be voidable or unenforceable, the remaining portions hereof
shall remain in force and effect.
12. GOVERNING LAW/VENUE/SERVICE JURISDICTION
(a) This Agreement shall be construed in accordance with, and shall be
governed by the laws of the State of California.
(b) Venue for any litigation or arbitration arising out of any claim or
dispute to enforce or interpret this Agreement shall be in the County of
Los Angeles, State of California.
(c) Vitafort and Ellis each agrees to submit to the jurisdiction of all
Federal and State Courts in the State of California.
13. ATTORNEYS' FEES AND COSTS
In the event of any dispute arising out this Agreement or to enforce
any of its terms, the prevailing party in any legal proceeding shall be
entitled to recover all costs incurred in connection therewith,
including but not limited to reasonable attorneys' fees.
14. INDEMNIFICATION
The parties agree to defend and indemnify each other from any claims
made, arising out of or in connection with any breach of the
representations or agreements contained in this Agreement.
15. GENDER/PARAGRAPH HEADINGS
As used in this Agreement, the masculine, feminine or neuter gender,
and the singular or plural number shall each be deemed to include the
others whenever the context so indicates.
PAGE 3 OF 4
<PAGE>
16. REPRESENTATIVE CAPACITY
Each person executing this Agreement in a representative capacity
represents and warrants that he or she is empowered to do so. Each
corporate entity executing this Agreement represents and warrants that
its Board of Directors has resolved to execute this Agreement.
17. NOTICES
For purposes of notice to any party pursuant to this Agreement, notice
shall be in writing and may be made by personal service or telefax, and
deemed completed on the date of delivery or telefax, or by U.S. Mail,
and deemed completed three business days after deposit in the mail.
Notice to the Vitafort shall be to:
1800 Avenue of the Stars
Suite 480
Los Angeles, California 90067
Telefax (310) 556 1227
Notice to Ellis shall be to:
635 North Canyon Boulevard
Monrovia, CA 91016-1709
Changes of any of the foregoing addresses or telefax numbers may be
effected by providing written notice of same pursuant to this Paragraph 18.
18. Counterparts
This Agreement may be executed in counterparts and transmitted via
facsimile, and each such counterpart shall be deemed to be an original
executed document.
19. Execution
THIS AGREEMENT HAS BEEN CAREFULLY READ, REVIEWED, EVALUATED AND UNDERSTOOD
BY EACH OF THE UNDERSIGNED, AND IS HEREBY AGREED UPON.
IN WITNESS WHEREOF, we have set our hands and seals as of the day and year first
above written.
VITAFORT INTERNATIONAL CORPORATION ELOY L. ELLIS
By /s/ Mark Beychok /s/ Eloy L. Ellis
----------------------------------- -----------------------------------
Mark Beychok, President Eloy L. Ellis
PAGE 4 OF 4
<PAGE>
EXHIBIT 99.24
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK
WARRANT AGREEMENT
THIS CLASS A COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of Eloy Ellis ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
1
<PAGE>
Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 15 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this
Agreement, each Holder shall have the right, which may be exercised
commencing on the Effective Registration Date and terminating at 5:00 PM. Los
Angeles time 15 months thereafter, to purchase from the Company the number of
fully paid and nonassessable shares which the Holder may at the time be
entitled to purchase on exercise of such Warrants.
2
<PAGE>
4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the Warrant Agent shall promptly issue
and cause to be delivered to or as directed by the Holder, and in such name or
names as the Holder may designate, a Certificate for the number of full shares
purchased upon the exercise of the Warrant, together with cash as provided in
Section 8 hereof; for any fractional shares otherwise issuable upon such
exercise. Such Certificate shall be deemed to have been issued, and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares, as of the date of the surrender of such Warrant and
payment of the Aggregate Exercise Price; provided, however, that if, at the date
of surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares with
respect to which such Warrant is then exercised shall be issuable as of the date
on which such books shall next be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided further,
however, that the transfer books of record, unless otherwise required by law,
shall not be closed at any one time for a period longer than twenty (20) days.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised to purchase less than
all of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction
of the Company of such mutilation, loss, theft or destruction of such
Certificate and indemnity, if requested, also to the reasonable satisfaction
3
<PAGE>
of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a call
of this Warrant ("Call Notice") at any time after the Effective Registration
Date, but prior to the expiration of this Warrant, by written notice to Warrant
Holder, provided only that the Closing Price (hereinafter defined) of the
Company's Common Stock has theretofore equalled or exceeded Thirty-Three and
three-fourths Cents ($0.3375) per Share for ten (10) consecutive Trading Days
after the Effective Registration Date. This Warrant shall expire and become
null and void thirty (30) days after the issuance of the Call Notice. The
Warrant Holder may exercise this Warrant and purchase some or all of the Shares
then subject to this Warrant within said thirty (30)-day period, but may not
thereafter exercise this Warrant or purchase any of the Shares. If the Warrant
is not exercised within said thirty (30) day period, the Company will have the
right to redeem any or all outstanding and unexercised Warrants at a redemption
price of $0.0001 per Warrant. For purposes of this Section 7.3, "Closing Price"
means (a) if the Common Stock is then listed on an established stock exchange or
exchanges, the average bid and ask price per share for each Trading Day on the
principal exchange on which the Common Stock is traded, as reported in The Wall
Street Journal; or (b) if the Common Stock is not then listed on an exchange,
the price per share for the Common Stock in the over-the-counter market as
quoted on NASDAQ (either National Market System or Small Cap Issues or the OTC
Electronic Bulletin Board), for each Trading Day, as reported in The Wall Street
Journal. If the Common Stock is not then listed on an exchange or quoted on
NASDAQ or the OTC Electronic Bulletin Board, the Common Stock shall be deemed to
have a Closing Price of less than Thirty-Three and three-fourths Cents ($0.3375)
per share on such Trading Day. For purposes of this Section 7.3, the term
"Trading Day" shall mean a day on which the New York Stock Exchange is open for
trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,the Exercise Price shall be
$0.225 per share. The product of the Exercise Price times the number of shares
the Holder then elects to purchase is herein referred to as the "Aggregate
Exercise Price."
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Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock
as interest on preferred stock), subdivide (split) its outstanding shares of
Common Stock, combine (reverse split) its outstanding shares of Common Stock,
issue by reclassification of its shares of Common Stock any shares or other
securities of the Company, or distribute as a stock dividend to holders of
its Common Stock any securities of the Company or of another entity, the
number of shares of Common Stock or other securities the Holder hereof is
entitled to purchase pursuant to the Warrants immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive upon exercise the
number of shares of Common Stock or other securities which he, she or it
would have owned or would have been entitled to receive after the happening
of any of the events described above had the Warrant been exercised
immediately prior to the happening of such event, and the Exercise Price
shall be correspondingly adjusted; provided, however, that no adjustment in
the number of shares and/or the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%)
in such number and/or price; and provided further, however, that any
adjustments which by reason of this Section 11 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
An adjustment made pursuant to this Section 11 shall become effective
immediately after the record date in the case of a stock dividend or other
distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or reclassification. The Holder
shall be entitled to participate in any subscription or other rights offering
made to holders of Common Stock as if he, she or it had purchased the full
number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
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11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
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In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all actions
necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and Warrant
Shares have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER APPLICABLE
STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and
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accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or omission in reliance upon written information furnished
to the Company by such Holder or underwriter and stated to be specifically for
use therein. It is agreed that the indemnity agreement contained in this
Section 16.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent has not been unreasonably withheld).
14.2 Each Holder will, if Warrant Shares held by him, her or
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this
Section 16 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the
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defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefor, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
16, to the extent such failure is not prejudicial. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
14.4 If the indemnification provided for in this Section 16
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
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(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
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Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ MARK BEYCHOK
---------------------------------
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
Eloy Ellis
By: /s/ ELOY ELLIS
------------------------
Its:
------------------------
By:
------------------------
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CERTIFICATE NO. VBS-3A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK WARRANT
TO PURCHASE 27,500 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Eloy Ellis or registered assigns
("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL CORPORATION,
INC. a Delaware corporation, ("Company"), up to Twenty-Seven Thousand Five
Hundred (27,500), fully paid and nonassessable shares of common stock of the
Company ("Common Stock"), at any time commencing one year after a registration
statement covering the Warrant Shares (as defined in the Warrant Agreement
referred to herein) under the Securities Act of 1933, as amended, has been
declared effective by the Securities and Exchange Commission and terminating at
5:00 P.M. Los Angeles time 15 months thereafter, at the purchase price of $0.225
per share ("Exercise Price") (pending adjustment), as provided in Section 1 of a
the Warrant Agreement. This Warrant is issued pursuant to the Warrant Agreement
made by the Company dated November 30, 1995 in favor of all Warrant Holders
("Warrant Agreement") and is subject to all the terms thereof, including the
limitations on transferability set forth in Section 13 thereof. The Holder
accepts the terms and provisions of the Warrant Agreement by acceptance of this
Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ MARK BEYCHOK
------------------------------
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated ______________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-3A to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _____________________________________________________________________
(please type or print in block letters)
Address: _____________________________________________________________________
Signature:
_____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: _____________________________________________________________________
Address: _____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-3A to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
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EXHIBIT 99.25
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK
WARRANT AGREEMENT
THIS CLASS B COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of Eloy Ellis ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 21 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, which may be exercised commencing on the
Effective Registration Date and terminating at 5:00 PM. Los Angeles time 21
months thereafter, to purchase from the Company the number of fully paid and
nonassessable shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the Warrant Agent shall promptly issue
and cause to be delivered to or as directed by the Holder, and in such name or
names as the Holder may designate, a Certificate for the number of full shares
purchased upon the exercise of the Warrant, together with cash as provided in
Section 8 hereof; for any fractional shares otherwise issuable upon such
exercise. Such Certificate shall be deemed to have been issued, and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares, as of the date of the surrender of such Warrant and
payment of the Aggregate Exercise Price; provided, however, that if, at the date
of surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares with
respect to which such Warrant is then exercised shall be issuable as of the date
on which such books shall next be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided further,
however, that the transfer books of record, unless otherwise required by law,
shall not be closed at any one time for a period longer than twenty (20) days.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised to purchase less than
all of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction of
the Company of such mutilation, loss, theft or destruction of such Certificate
and indemnity, if requested, also to the reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a call
of this Warrant ("Call Notice") at any time after the Effective Registration
Date, but prior to the expiration of this Warrant, by written notice to Warrant
Holder, provided only that the Closing Price (hereinafter defined) of the
Company's Common Stock has theretofore equalled or exceeded Forty-Five Cents
($0.45) per Share for ten (10) consecutive Trading Days after the Effective
Registration Date. This Warrant shall expire and become null and void thirty
(30) days after the issuance of the Call Notice. The Warrant Holder may
exercise this Warrant and purchase some or all of the Shares then subject to
this Warrant within said thirty (30)-day period, but may not thereafter exercise
this Warrant or purchase any of the Shares. If the Warrant is not exercised
within said thirty (30) day period, the Company will have the right to redeem
any or all outstanding and unexercised Warrants at a redemption price of $0.001
per Warrant. For purposes of this Section 7.3, "Closing Price" means (a) if the
Common Stock is then listed on an established stock exchange or exchanges, the
average bid and ask price per share for each Trading Day on the principal
exchange on which the Common Stock is traded, as reported in The Wall Street
Journal; or (b) if the Common Stock is not then listed on an exchange, the price
per share for the Common Stock in the over-the-counter market as quoted on
NASDAQ (either National Market System or Small Cap Issues or the OTC Electronic
Bulletin Board), for each Trading Day, as reported in The Wall Street Journal.
If the Common Stock is not then listed on an exchange or quoted on NASDAQ or the
OTC Electronic Bulletin Board, the Common Stock shall be deemed to have a
Closing Price of less than Forty-Five Cents ($0.45) per share on such Trading
Day. For purposes of this Section 7.3, the term "Trading Day" shall mean a day
on which the New York Stock Exchange is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,
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the Exercise Price shall be $0.30 per share. The product of the Exercise
Price times the number of shares the Holder then elects to purchase is herein
referred to as the "Aggregate Exercise Price."
Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock as
interest on preferred stock), subdivide (split) its outstanding shares of Common
Stock, combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute as a stock dividend to holders of its Common Stock
any securities of the Company or of another entity, the number of shares of
Common Stock or other securities the Holder hereof is entitled to purchase
pursuant to the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive upon exercise the number of shares of Common
Stock or other securities which he, she or it would have owned or would have
been entitled to receive after the happening of any of the events described
above had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The Holder shall be entitled to participate in any subscription or other rights
offering made to holders of Common Stock as if he, she or it had purchased the
full number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
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11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all
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actions necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
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13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or omission in reliance upon written information furnished
to the Company by such Holder or underwriter and stated to be specifically for
use therein. It is agreed that the indemnity agreement contained in this
Section 16.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent has not been unreasonably withheld).
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14.2 Each Holder will, if Warrant Shares held by him, her or
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this
Section 16 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefor, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 16, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the
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claim in question as an Indemnifying Party may reasonably request in writing and
as shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
14.4 If the indemnification provided for in this Section 16
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
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Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
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Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Mark Beychok
---------------------------
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
Eloy Ellis
By: /s/ Eloy Ellis
------------------------
Its: ________________________
By: ________________________
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CERTIFICATE NO. VBS-3B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK WARRANT
TO PURCHASE 27,500 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, Eloy Ellis or registered assigns
("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL CORPORATION,
INC. a Delaware corporation, ("Company"), up to Twenty-Seven Thousand Five
Hundred (27,500), fully paid and nonassessable shares of common stock of the
Company ("Common Stock"), at any time commencing one year after a registration
statement covering the Warrant Shares (as defined in the Warrant Agreement
referred to herein) under the Securities Act of 1933, as amended, has been
declared effective by the Securities and Exchange Commission and terminating at
5:00 P.M. Los Angeles time 21 months thereafter, at the purchase price of $0.30
per share ("Exercise Price") (pending adjustment), as provided in Section 1 of a
the Warrant Agreement. This Warrant is issued pursuant to the Warrant Agreement
made by the Company dated November 30, 1995 in favor of all Warrant Holders
("Warrant Agreement") and is subject to all the terms thereof, including the
limitations on transferability set forth in Section 13 thereof. The Holder
accepts the terms and provisions of the Warrant Agreement by acceptance of this
Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ Mark Beychok
-------------------------------
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated _________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-3B to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: ____________________________________________________________________
(please type or print in block letters)
Address: ____________________________________________________________________
Signature: ____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: _____________________________________________________________________
Address: _____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-3B to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
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EXHIBIT 99.26
AGREEMENT
THIS AGREEMENT is made as of this twenty-second day of December 1995, between
VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation, with its
principal offices at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067 (hereinafter "Vitafort" or the "Company"), and JOHN
COPPOLINO, an individual (hereinafter "Coppolino")
RECITALS
WHEREAS, Coppolino performs consulting services as an executive of
Vitafort pursuant to a Consulting Agreement dated, August 15, 1995, by and
between Vitafort and Coppolino (hereinafter the "Consulting Agreement") ; and
WHEREAS, Coppolino has voluntarily deferred a portion of his fees since
the beginning of his consulting, the accrued total of deferred fees as of
November 2, 1995 being $13,000 and
WHEREAS, the Board of Directors has ratified and approved an offer for
Management and selected consultants to convert all deferred fees as of
November 2, 1995 into equity at the same rate as the recent Bridge Equity
Offering (One share of Vitafort International Corporation common stock for
each 12 CENTS of deferred fees, plus 1/2 warrant to purchase a share of
common stock at 22 1/2 CENTS and 1/2 warrant to purchase a share of common
stock at 30 CENTS).
WHEREAS, Coppolino and Vitafort desire to pay the deferred fees by
offsetting the amount due Coppolino against a comparable purchase of equity
in Vitafort.
NOW THEREFORE, and in consideration for the foregoing facts and mutual
covenants and agreements contained in this Agreement, the parties agree as
follows:
1. INCORPORATION OF RECITALS
The Recitals above stated are incorporated by reference as if fully set
forth herein.
2. PURCHASE OF EQUITY/PAYMENT OF DEFERRED FEES
The parties agree that the purchase of 108,333 shares of common stock,
54,167 A warrants, and 54,167 B warrants identical to those issued in the
Bridge Equity Offering shall be fully paid in all respects (a) by
offsetting the purchase against the fees Vitafort owes Coppolino as of
November 2, 1995, and (b) Coppolino shall have no further liability under
and pursuant to payment.
3. ACKNOWLEDGMENT OF PAYMENT AND RELEASE
Vitafort acknowledges that it has been paid the full for the equity
purchase amount and Coppolino acknowledges that he has been paid an equal
amount to be applied against fees owed Coppolino for 1995. Vitafort
releases and discharges Coppolino and his successors, executors,
administrators, heirs and assigns from any liability with respect to the
purchase cost. It is expressly understood and agreed by Vitafort that the
release referred to in this paragraph extends to all claims, whether known
or unknown or suspected. Vitafort hereby waives the provisions of Civil
Code Section 1542 which provides:
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"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release which, if known by him,
must have materially affected the settlement with the
debtor."
4. REPRESENTATIONS BY THE PARTIES
Each of the parties warrants and represents to the other party that neither
of them has assigned, sold or transferred, or purported to assign, sell or
transfer, to any person not a party to this agreement any matter, or part
of any matter, covered by this Agreement. Each of the parties agrees to
indemnify and hold harmless the other party from and against any claim,
demand, damage, debt, liability, cost, expense, lien, action or cause of
action, including attorneys' fees and costs based upon or arising out of
any breach of any warranty or representation.
Mark Coppolino confirms he has read and understands the content of the
subscription agreement prepared for the Bridge Equity Offering.
Vitafort agrees to register the shares purchased, and the shares underlying
the warrants, as part of the very next registration using S1, S3, or S8
filings with the SEC.
5. MODIFICATION
No variation, amendment or modification of this Agreement or waiver of any
of the terms or provisions thereof shall be deemed valid unless in writing
as an amendment hereto signed by the parties hereto.
6. NO ASSIGNMENT OF CLAIMS
Each releasing party represents and warrants to each released party that it
has not heretofore voluntarily, by operation of law or otherwise, assigned,
transferred, encumbered or conveyed or purported to assign, transfer,
encumber or convey to any person or entity any claim, debt, demand,
liability, obligation, account, reckoning, cost, expense, lien, action
or cause of action purportedly released pursuant to Paragraph 7 of this
Agreement. Each party hereto shall defend and indemnify the other party
hereto for any breach of the aforementioned representations and
warranties.
7. INTEGRATION
This Agreement constitutes the entire agreement and sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, covenants, arrangements,
communications, correspondence, representations or warranties, whether oral
or written, and this Agreement may not be modified, amended or terminated
except by a writing signed by Vita fort, Coppolino, and any other party to
be charged.
8. EXECUTION OF ADDITIONAL DOCUMENTS
The parties hereto agree to execute such additional documents as may be
necessary to implement the terms of this Agreement
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9. INTEGRITY OF AGREEMENT
(a) The terms of this Agreement are contractual and not mere recital.
This Agreement is the result of negotiation between the parties, each of
whom has participated in the drafting hereof through its or his respective
attorneys.
(b) This Agreement has been carefully reviewed by each party, with full
understanding thereof, and voluntary execution thereof without duress or
coercion is hereby acknowledged.
(c) Each party hereto agrees that it or he will not take any action which
would interfere with the performance of this Agreement by any other party
hereto or which would adversely affect any of the rights provided for
herein.
(d) Each party hereto covenants and agrees not to bring any claim,
action, suit or proceeding against any other party hereto, directly or
indirectly, regarding any of the released claims, and each party further
covenants and agrees that this Agreement is a bar to any such claim,
action, suit or proceeding. However, this subparagraph shall not bar any
claim, action, suit or proceeding to enforce or interpret, on this
Agreement arising out of the obligations of any party provided herein.
10. HEIRS, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of, and shall be binding upon
the heirs, successors and assigns of the parties hereto, and each of them.
11. SEVERABILITV
In the event that any material provision of this Agreement should be held
to be voidable or unenforceable, the remaining portions hereof shall
remain in force and effect.
12. GOVERNING LAW/VENUE/SERVICE JURISDICTION
(a) This Agreement shall be construed in accordance with, and shall be
governed by the laws of the State of California.
(b) Venue for any litigation or arbitration arising out of any claim or
dispute to enforce or interpret this Agreement shall be in the County of
Los Angeles, State of California.
(c) Vitafort and Coppolino each agrees to submit to the jurisdiction of
all Federal and State Courts in the State of California.
13. ATTORNEYS' FEES AND COSTS
In the event of any dispute arising out this Agreement or to enforce any
of its terms, the prevailing party in any legal proceeding shall be
entitled to recover all costs incurred in connection therewith, including
but not limited to reasonable attorneys' fees.
14. INDEMNIFICATION
The parties agree to defend and indemnify each other from any claims made,
arising out of or in connection with any breach of the representations or
agreements contained in this Agreement.
15. GENDER/PARAGRAPH HEADINGS
As used in this Agreement, the masculine, feminine or neuter gender, and
the singular or plural number shall each be deemed to include the others
whenever the context so indicates.
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16. REPRESENTATIVE CAPACITY
Each person executing this Agreement in a representative capacity
represents and warrants that he or she is empowered to do so. Each
corporate entity executing this Agreement represents and warrants that its
Board of Directors has resolved to execute this Agreement.
17. NOTICES
For purposes of notice to any party pursuant to this Agreement, notice
shall be in writing and may be made by personal service or telefax, and
deemed completed on the date of delivery or telefax, or by U.S. Mail, and
deemed completed three business days after deposit in the mail.
Notice to the Vitafort shall be to:
1800 Avenue of the Stars
Suite 480
Los Angeles, California 90067
Telefax (310) 556 1227
Notice to Coppolino shall be to:
John Coppolino
10960 Wellworth, Suite 101
Los Angeles, CA 90024
Changes of any of the foregoing addresses or telefax numbers may be
effected by providing written notice of same pursuant to this Paragraph 18.
18. COUNTERPARTS
This Agreement may be executed in counterparts and transmitted via
facsimile, and each such counterpart shall be deemed to be an original
executed document.
19. EXECUTION
THIS AGREEMENT HAS BEEN CAREFULLY READ, REVIEWED, EVALUATED AND UNDERSTOOD
BY EACH OF THE UNDERSIGNED, AND IS HEREBY AGREED UPON.
IN WITNESS WHEREOF, we have set our hands and seals as of the day and year
first above written.
VITAFORT INTERNATIONAL CORPORATION JOHN COPPOLINO
By /s/ Mark Beychok /s/ John Coppolino
------------------------------ -----------------------
Mark Beychok, President John Coppolino
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EXHIBIT 99.27
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK
WARRANT AGREEMENT
THIS CLASS A COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of John Coppolino ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 15 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, which may be exercised commencing on the
Effective Registration Date and terminating at 5:00 PM. Los Angeles time 15
months thereafter, to purchase from the Company the number of fully paid and
nonassessable shares which the Holder may at the time be entitled to purchase on
exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised, together
with the Purchase Form attached hereto as Exhibit A, duly filled in and signed,
and upon payment to the Warrant Agent of the Aggregate Exercise Price (as
defined in and determined in accordance with the provisions of Sections 8 and 11
hereof) for the number of shares with respect to which such Warrant is then
exercised. Payment of the Aggregate Exercise Price shall be made in cash or by
check. Subject to Section 4 hereof, upon the surrender of the Warrant and
payment of the Aggregate Exercise Price, the Warrant Agent shall promptly issue
and cause to be delivered to or as directed by the Holder, and in such name or
names as the Holder may designate, a Certificate for the number of full shares
purchased upon the exercise of the Warrant, together with cash as provided in
Section 8 hereof; for any fractional shares otherwise issuable upon such
exercise. Such Certificate shall be deemed to have been issued, and any person
so designated to be named therein shall be deemed to have become a holder of
record of such shares, as of the date of the surrender of such Warrant and
payment of the Aggregate Exercise Price; provided, however, that if, at the date
of surrender of such Warrant and payment of such Aggregate Exercise Price, the
transfer books for the shares or other class of stock purchasable upon the
exercise of such Warrant shall be closed, the certificates for the shares with
respect to which such Warrant is then exercised shall be issuable as of the date
on which such books shall next be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided further,
however, that the transfer books of record, unless otherwise required by law,
shall not be closed at any one time for a period longer than twenty (20) days.
The rights of purchase represented by the Warrants shall be exercisable, at the
election of the Holders thereof, either in full or from time to time in part,
and in the event that a Warrant Certificate is exercised to purchase less than
all of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction of
the Company of such mutilation, loss, theft or destruction of such Certificate
and indemnity, if requested, also to the reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise of the
rights of purchase represented by the outstanding Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall have
the right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may issue a call
of this Warrant ("Call Notice") at any time after the Effective Registration
Date, but prior to the expiration of this Warrant, by written notice to Warrant
Holder, provided only that the Closing Price (hereinafter defined) of the
Company's Common Stock has theretofore equalled or exceeded Thirty-Three and
three-fourths Cents ($0.3375) per Share for ten (10) consecutive Trading Days
after the Effective Registration Date. This Warrant shall expire and become
null and void thirty (30) days after the issuance of the Call Notice. The
Warrant Holder may exercise this Warrant and purchase some or all of the Shares
then subject to this Warrant within said thirty (30)-day period, but may not
thereafter exercise this Warrant or purchase any of the Shares. If the Warrant
is not exercised within said thirty (30) day period, the Company will have the
right to redeem any or all outstanding and unexercised Warrants at a redemption
price of $0.0001 per Warrant. For purposes of this Section 7.3, "Closing Price"
means (a) if the Common Stock is then listed on an established stock exchange or
exchanges, the average bid and ask price per share for each Trading Day on the
principal exchange on which the Common Stock is traded, as reported in The Wall
Street Journal; or (b) if the Common Stock is not then listed on an exchange,
the price per share for the Common Stock in the over-the-counter market as
quoted on NASDAQ (either National Market System or Small Cap Issues or the OTC
Electronic Bulletin Board), for each Trading Day, as reported in The Wall Street
Journal. If the Common Stock is not then listed on an exchange or quoted on
NASDAQ or the OTC Electronic Bulletin Board, the Common Stock shall be deemed to
have a Closing Price of less than Thirty-Three and three-fourths Cents ($0.3375)
per share on such Trading Day. For purposes of this Section 7.3, the term
"Trading Day" shall mean a day on which the New York Stock Exchange is open for
trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,the Exercise Price shall be
$0.225 per share. The product of the Exercise Price times the number of shares
the Holder then elects to purchase is herein referred to as the "Aggregate
Exercise Price."
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Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company shall pay a
dividend in shares of its Common Stock (other than payments of Common Stock as
interest on preferred stock), subdivide (split) its outstanding shares of Common
Stock, combine (reverse split) its outstanding shares of Common Stock, issue by
reclassification of its shares of Common Stock any shares or other securities of
the Company, or distribute as a stock dividend to holders of its Common Stock
any securities of the Company or of another entity, the number of shares of
Common Stock or other securities the Holder hereof is entitled to purchase
pursuant to the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive upon exercise the number of shares of Common
Stock or other securities which he, she or it would have owned or would have
been entitled to receive after the happening of any of the events described
above had the Warrant been exercised immediately prior to the happening of such
event, and the Exercise Price shall be correspondingly adjusted; provided,
however, that no adjustment in the number of shares and/or the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
The Holder shall be entitled to participate in any subscription or other rights
offering made to holders of Common Stock as if he, she or it had purchased the
full number of shares as to which the Warrant remains unexercised immediately
prior to the record date for such rights offering.
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11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may
at its option at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount deemed appropriate by the Board of
Directors of the Company.
11.3 NOTICE OF ADJUSTMENT. Whenever the number of shares
purchasable upon the exercise of each Warrant or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall mail by first class
mail, postage prepaid, to each Holder notice of such adjustment or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company or such successor or purchasing
corporation, as the case may be, shall execute an agreement that each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property which he, she or it
would have owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each Holder, notice of the execution of any such agreement.
Such agreement shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section 11. The
provisions of this subsection 11.5 shall similarly apply to successive
consolidations, mergers, sales or conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
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In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all actions
necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and Warrant Shares
have not been registered under the Securities Act of 1933, as amended,
("Securities Act") or the securities laws of any states and will be offered and
sold in reliance on exemptions from the registration requirement of such laws.
The Warrants and Warrant Shares are deemed to be "restricted securities" as that
term is defined under Rule 144 promulgated under the Securities Act, because the
Warrants will be issued and sold by the Company in private transactions not
involving a public offering. In general, under Rule 144 as currently in effect,
subject to the satisfaction of certain other conditions, a person, including an
affiliate of the Company (or persons whose shares are aggregated), who has owned
restricted shares of Common Stock beneficially for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the Common Stock is quoted on NASDAQ, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has held the securities for at least three years and who has not been an
affiliate of the Company for at least three months immediately prior to a
proposed sale is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.
13.2 LEGEND RESTRICTION. The Company shall cause the
following legend to be set forth on each Warrant Certificate and certificates
representing the Warrant Shares unless counsel for the Company is of the opinion
as to any such certificates that such legend is unnecessary:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER APPLICABLE
STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
13.3 NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of the Warrants or of the Warrant Shares, the Holder thereof shall give
written notice to the Company stating such Holder's intention to effect such
transfer and describing the circumstances of the proposed transfer in sufficient
detail, accompanied by either (i) an opinion of counsel reasonably satisfactory
to the Company to the effect that the proposed transfer may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
staff of the Securities and Exchange Commission ("Commission") to the effect
that the staff will not recommend that enforcement action be taken if the
proposed transfer is effected without registration. Subject to evidence of
compliance with any applicable state securities or "blue sky" law or laws, the
Company shall promptly notify the Holder in writing that such Holder may proceed
with its transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against the
Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each of its
officers, directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 18 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls within the meaning of Section 18 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and
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accountants and each person controlling such Holder, each such underwriter,
and each person who controls any such underwriter, for any legal and any
other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent
that any such claim, loss, damage, liability, or expense arises out of or is
based on any untrue statement or omission in reliance upon written
information furnished to the Company by such Holder or underwriter and stated
to be specifically for use therein. It is agreed that the indemnity
agreement contained in this Section 16.1 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent has
not been unreasonably withheld).
14.2 Each Holder will, if Warrant Shares held by him, her or
it are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 18 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 16 exceed the gross proceeds from the offering received by
such Holder.
14.3 Each party entitled to indemnification under this
Section 16 ("Indemnified Party") shall give notice to the party required to
provide indemnification ("Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the
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defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefor, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Section
16, to the extent such failure is not prejudicial. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
14.4 If the indemnification provided for in this Section 16
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statement or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, however that in no event shall any contribution by a
Holder under this Section 16.4 exceed the gross proceeds from the offering
received from such Holder. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by 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
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
14.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
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(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
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Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ MARK BEYCHOK
_________________________________
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
John Coppolino
By: /s/ JOHN COPPOLINO
________________________
Its: ________________________
By: ________________________
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CERTIFICATE NO. VBS-4A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS A COMMON STOCK WARRANT
TO PURCHASE 54,167 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, John Coppolino or registered
assigns ("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL
CORPORATION, INC. a Delaware corporation, ("Company"), up to Fifty-Four Thousand
One Hundred Sixty-Seven (54,167), fully paid and nonassessable shares of common
stock of the Company ("Common Stock"), at any time commencing one year after a
registration statement covering the Warrant Shares (as defined in the Warrant
Agreement referred to herein) under the Securities Act of 1933, as amended, has
been declared effective by the Securities and Exchange Commission and
terminating at 5:00 P.M. Los Angeles time 15 months thereafter, at the purchase
price of $0.225 per share ("Exercise Price") (pending adjustment), as provided
in Section 1 of a the Warrant Agreement. This Warrant is issued pursuant to the
Warrant Agreement made by the Company dated November 30, 1995 in favor of all
Warrant Holders ("Warrant Agreement") and is subject to all the terms thereof,
including the limitations on transferability set forth in Section 13 thereof.
The Holder accepts the terms and provisions of the Warrant Agreement by
acceptance of this Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ MARK BEYCHOK
______________________________
Mark Beychok
President & CEO
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Exhibit "A"
PURCHASE FORM
Dated ______________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-4A to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: _____________________________________________________________________
(please type or print in block letters)
Address: _____________________________________________________________________
Signature: _____________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: _____________________________________________________________________
Address: _____________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-4A to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
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EXHIBIT 99.28
THE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER THE
WARRANTS NOR THE SHARES NOR ANY INTEREST IN THE WARRANTS OR THE SHARES
MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER
AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK
WARRANT AGREEMENT
THIS CLASS B COMMON STOCK WARRANT AGREEMENT is made as of December 30, 1995
("Effective Date") by VITAFORT INTERNATIONAL CORPORATION, a Delaware corporation
("Company"), in favor of John Coppolino ("Warrant Holder" or "Holder").
WHEREAS, the Company issued and sold in a non-public offering ("Offering")
pursuant to Section 4(2) of the Securities Act of 1933, as amended ("Securities
Act") approximately 42 Units ("Unit"), each Unit consisting of 125,000 shares of
the Company's Common Stock, $.0001 par value, 62,500 Class A Common Stock
Purchase Warrants ("A Warrants") and 62,500 Class B Common Stock Purchase
Warrants ("B Warrants"). Each A Warrant and each B Warrant entitles the holder
to purchase one share of the Company's common stock, $.0001 par value ("Common
Stock"); and
WHEREAS, the Company has agreed to convert your deferred fees (or wages)
into equity at the same rates and terms as the offering; and
WHEREAS, the Company deems it to be in the best interests of the Warrant
Holder that the Company establish the terms and conditions upon which the
Warrants may be issued, exercised and redeemed, and other matters as provided
herein.
NOW THEREFORE, to establish the terms and conditions of the Warrants, and
the rights and obligations of the Company and the Warrant Holder with respect
thereto, the Company hereby provides as follows:
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Section 1. CERTIFICATION. For value received, the Warrant Holder or its
registered assign ("Holder") is entitled to purchase from the Company, subject
to the provisions of this Warrant Agreement, fully paid, validly issued and
nonassessable shares of the Company's Common Stock at the Exercise Price (as
defined herein) commencing one year after a registration statement covering the
Warrant Shares (as defined herein) under the Securities Act is declared
effective by the Securities and Exchange Commission ("Effective Registration
Date"), and terminating at 5:00 P.M. Los Angeles time 21 months thereafter. The
number of shares of Common Stock to be received upon the exercise of the Warrant
and the price to be paid for each share of Common Stock may be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Shares."
Section 2. FORM OF WARRANT. The text of the Warrant and of the Purchase
Form shall be substantially as set forth in Exhibit A attached hereto
(collectively, the "Warrant Certificates"). The Exercise Price (as defined in
Section 8) and the number of shares issuable upon exercise of each Warrant are
subject to adjustment upon the occurrence of certain events, all as hereinafter
provided. The Warrant Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, and
attested to by its Secretary or an Assistant Secretary. The signature of any of
such officers on the Warrant Certificates may be manual or facsimile. Warrant
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any one of them shall have ceased to
hold such offices prior to the delivery of such Warrant Certificates or did not
hold such offices on the date of this Agreement.
Section 3. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant Certificate
may be exchanged for another Certificate entitling the Holder thereof to
purchase a like aggregate number of shares as the Certificate surrendered then
entitled such Holder to purchase. Any Holder desiring to exchange a Warrant
Certificate shall make such request in writing delivered to the Company, and
shall surrender, properly endorsed, the Certificate to be so exchanged.
Thereupon, the Company shall countersign and deliver to the person entitled
thereto a new Warrant Certificate as requested.
Section 4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
4.1 TERM OF WARRANTS. Subject to the terms of this
Agreement, each Holder shall have the right, which may be exercised
commencing on the Effective Registration Date and terminating at 5:00 PM. Los
Angeles time 21 months thereafter, to purchase from the Company the number of
fully paid and nonassessable shares which the Holder may at the time be
entitled to purchase on exercise of such Warrants.
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4.2 EXERCISE OF WARRANTS. A Warrant may be exercised
upon surrender to the Company ("Warrant Agent") at its office at Los Angeles,
California of the Certificate evidencing the Warrant to be exercised,
together with the Purchase Form attached hereto as Exhibit A, duly filled in
and signed, and upon payment to the Warrant Agent of the Aggregate Exercise
Price (as defined in and determined in accordance with the provisions of
Sections 8 and 11 hereof) for the number of shares with respect to which such
Warrant is then exercised. Payment of the Aggregate Exercise Price shall be
made in cash or by check. Subject to Section 4 hereof, upon the surrender of
the Warrant and payment of the Aggregate Exercise Price, the Warrant Agent
shall promptly issue and cause to be delivered to or as directed by the
Holder, and in such name or names as the Holder may designate, a Certificate
for the number of full shares purchased upon the exercise of the Warrant,
together with cash as provided in Section 8 hereof; for any fractional shares
otherwise issuable upon such exercise. Such Certificate shall be deemed to
have been issued, and any person so designated to be named therein shall be
deemed to have become a holder of record of such shares, as of the date of
the surrender of such Warrant and payment of the Aggregate Exercise Price;
provided, however, that if, at the date of surrender of such Warrant and
payment of such Aggregate Exercise Price, the transfer books for the shares
or other class of stock purchasable upon the exercise of such Warrant shall
be closed, the certificates for the shares with respect to which such Warrant
is then exercised shall be issuable as of the date on which such books shall
next be opened and until such date the Company shall be under no duty to
deliver any certificate for such shares; provided further, however, that the
transfer books of record, unless otherwise required by law, shall not be
closed at any one time for a period longer than twenty (20) days. The rights
of purchase represented by the Warrants shall be exercisable, at the election
of the Holders thereof, either in full or from time to time in part, and in
the event that a Warrant Certificate is exercised to purchase less than all
of the shares purchasable on such exercise at any time prior to the date of
expiration of the Warrants, a new Certificate evidencing the remaining shares
available for purchase will be issued, and the Company is hereby irrevocably
authorized to sign and to deliver the new Warrant Certificate.
Section 5. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable with respect to any transfer involved in
the issue or delivery of any Warrants or certificates for shares in a name other
than that of the registered Holder of Warrants with respect to which such shares
are issued.
Section 6. MUTILATED OR MISSING WARRANTS. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company may in
its discretion issue, and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate mutilated, lost, stolen or destroyed, a
new Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence to the reasonable satisfaction
of the Company of such mutilation, loss, theft or destruction of such
Certificate and indemnity, if requested, also to the reasonable satisfaction
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of the Company. An applicant for such a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other
reasonable charges as the Company may prescribe.
Section 7. RESERVATION OF SHARES; PURCHASE OF WARRANTS; CALL OF
WARRANTS.
7.1 RESERVATION OF SHARES. There have been reserved,
and the Company shall at all times keep reserved, out of its authorized
Common Stock, a number of shares of Common Stock sufficient to provide for
the exercise of the rights of purchase represented by the outstanding
Warrants.
7.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company
shall have the right, except as limited by law, other agreement or herein, to
purchase or otherwise acquire Warrants at such times, in such manner and for
such consideration as it may deem appropriate.
7.3 CALL OF WARRANTS BY COMPANY. The Company may
issue a call of this Warrant ("Call Notice") at any time after the Effective
Registration Date, but prior to the expiration of this Warrant, by written
notice to Warrant Holder, provided only that the Closing Price (hereinafter
defined) of the Company's Common Stock has theretofore equalled or exceeded
Forty-Five Cents ($0.45) per Share for ten (10) consecutive Trading Days
after the Effective Registration Date. This Warrant shall expire and become
null and void thirty (30) days after the issuance of the Call Notice. The
Warrant Holder may exercise this Warrant and purchase some or all of the
Shares then subject to this Warrant within said thirty (30)-day period, but
may not thereafter exercise this Warrant or purchase any of the Shares. If
the Warrant is not exercised within said thirty (30) day period, the Company
will have the right to redeem any or all outstanding and unexercised Warrants
at a redemption price of $0.001 per Warrant. For purposes of this Section
7.3, "Closing Price" means (a) if the Common Stock is then listed on an
established stock exchange or exchanges, the average bid and ask price per
share for each Trading Day on the principal exchange on which the Common
Stock is traded, as reported in The Wall Street Journal; or (b) if the Common
Stock is not then listed on an exchange, the price per share for the Common
Stock in the over-the-counter market as quoted on NASDAQ (either National
Market System or Small Cap Issues or the OTC Electronic Bulletin Board), for
each Trading Day, as reported in The Wall Street Journal. If the Common Stock
is not then listed on an exchange or quoted on NASDAQ or the OTC Electronic
Bulletin Board, the Common Stock shall be deemed to have a Closing Price of
less than Forty-Five Cents ($0.45) per share on such Trading Day. For
purposes of this Section 7.3, the term "Trading Day" shall mean a day on
which the New York Stock Exchange is open for trading.
Section 8. EXERCISE PRICE. The price per share at which shares may be
purchased upon exercise of Warrants in effect at any time, and as adjusted from
time to time as provided in Section 11 of this Agreement, is referred to herein
as the "Exercise Price." Subject to adjustment,
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the Exercise Price shall be $0.30 per share. The product of the Exercise
Price times the number of shares the Holder then elects to purchase is herein
referred to as the "Aggregate Exercise Price."
Section 9. FRACTIONAL SHARES. No fractional shares or script
representing fractional shares shall be issued upon the exercise of a Warrant.
Section 10. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed herein and
in the Warrant Certificate and are not enforceable against the Company except to
the extent set forth herein and therein.
Section 11. ADJUSTMENT OF WARRANT AND NUMBER OF SHARES. The number and
kind of securities purchasable upon the exercise of each Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 MECHANICAL ADJUSTMENTS. If the Company
shall pay a dividend in shares of its Common Stock (other than payments of
Common Stock as interest on preferred stock), subdivide (split) its
outstanding shares of Common Stock, combine (reverse split) its outstanding
shares of Common Stock, issue by reclassification of its shares of Common
Stock any shares or other securities of the Company, or distribute as a stock
dividend to holders of its Common Stock any securities of the Company or of
another entity, the number of shares of Common Stock or other securities the
Holder hereof is entitled to purchase pursuant to the Warrants immediately
prior thereto shall be adjusted so that the Holder shall be entitled to
receive upon exercise the number of shares of Common Stock or other
securities which he, she or it would have owned or would have been entitled
to receive after the happening of any of the events described above had the
Warrant been exercised immediately prior to the happening of such event, and
the Exercise Price shall be correspondingly adjusted; provided, however, that
no adjustment in the number of shares and/or the Exercise Price shall be
required unless such adjustment would require an increase or decrease of at
least one percent (1%) in such number and/or price; and provided further,
however, that any adjustments which by reason of this Section 11 are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. An adjustment made pursuant to this Section 11 shall
become effective immediately after the record date in the case of a stock
dividend or other distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or
reclassification. The Holder shall be entitled to participate in any
subscription or other rights offering made to holders of Common Stock as if
he, she or it had purchased the full number of shares as to which the Warrant
remains unexercised immediately prior to the record date for such rights
offering.
11.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The
Company may at its option at any time during the term of the Warrants, reduce
the then current Exercise Price to any amount deemed appropriate by the Board
of Directors of the Company.
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11.3 NOTICE OF ADJUSTMENT. Whenever the number
of shares purchasable upon the exercise of each Warrant or the Exercise Price
of such shares is adjusted, as herein provided, the Company shall mail by
first class mail, postage prepaid, to each Holder notice of such adjustment
or adjustments.
11.4 NO ADJUSTMENT FOR DIVIDENDS. Except as
provided in subsection 11.1, no adjustment in respect of any dividends shall
be made during the term of a Warrant or upon the exercise of a Warrant.
11.5 PRESERVATION OF PURCHASE RIGHTS UPON
RECLASSIFICATION, CONSOLIDATION, ETC. In case of any consolidation of the
Company with or merger of the Company into another corporation or in case of
any sale or conveyance to another corporation of the property of the Company
as an entirety or substantially as an entirety, the Company or such successor
or purchasing corporation, as the case may be, shall execute an agreement
that each Holder shall have the right thereafter upon payment of the Warrant
Price in effect immediately prior to such action to purchase upon exercise of
each Warrant the kind and amount of shares and other securities and property
which he, she or it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale or conveyance had such
Warrant been exercised immediately prior to such action. The Company shall
mail by first class mail, postage prepaid, to each Holder, notice of the
execution of any such agreement. Such agreement shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 11. The provisions of this subsection 11.5
shall similarly apply to successive consolidations, mergers, sales or
conveyances.
11.6 STATEMENT ON WARRANTS. Irrespective of any
adjustments in the Exercise Price or the number or kind of shares purchasable
upon the exercise of the Warrants, Warrants theretofore or thereafter issued
may continue to express the same price and number and kind of shares as are
stated in the Warrants initially issuable pursuant to this Agreement.
Section 12. SURVIVAL OF AGREEMENT. This Agreement and the rights and
obligations of the Company and the Warrant Holders hereunder shall not be
terminated by any of the following events:
Merger, reorganization or consolidation of the Company;
The transfer of all or substantially all of the assets of Company; or
The voluntary or involuntary dissolution of the Company.
In the event of any such merger, reorganization, consolidation or transfer of
assets, the surviving or resulting corporation or transferee of the assets of
the party affected shall be bound by and shall have the benefit of the
provisions of this Agreement, and the party affected shall take all
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actions necessary to insure that such corporation or transferee is bound by the
provisions of this Agreement.
Section 13. RESTRICTIONS ON TRANSFER. The provisions of this Section 13
shall be binding upon any transferee of the Warrants and upon each holder of
Warrant Shares. As used in this Section 13, the term "Warrant Shares" includes
any shares of the Company's Common Stock or other securities, issued in respect
of the Warrant Shares pursuant to any stock split, stock dividend,
recapitalization or otherwise; and the term "Warrant" includes any Warrant
Certificate or Certificates issued in exchange for the original Warrant
Certificate.
13.1 RESTRICTED SECURITIES. The Warrants and
Warrant Shares have not been registered under the Securities Act of 1933, as
amended, ("Securities Act") or the securities laws of any states and will be
offered and sold in reliance on exemptions from the registration requirement
of such laws. The Warrants and Warrant Shares are deemed to be "restricted
securities" as that term is defined under Rule 144 promulgated under the
Securities Act, because the Warrants will be issued and sold by the Company
in private transactions not involving a public offering. In general, under
Rule 144 as currently in effect, subject to the satisfaction of certain other
conditions, a person, including an affiliate of the Company (or persons whose
shares are aggregated), who has owned restricted shares of Common Stock
beneficially for at least two years is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1%
of the total number of outstanding shares of the same class or, if the Common
Stock is quoted on NASDAQ, the average weekly trading volume during the four
calendar weeks preceding the sale. A person who has held the securities for
at least three years and who has not been an affiliate of the Company for at
least three months immediately prior to a proposed sale is entitled to sell
such shares under Rule 144 without regard to any of the limitations described
above.
13.2 LEGEND RESTRICTION. The Company shall cause
the following legend to be set forth on each Warrant Certificate and
certificates representing the Warrant Shares unless counsel for the Company
is of the opinion as to any such certificates that such legend is unnecessary:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER AND UNDER APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST
BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
7
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13.3 NOTICE OF PROPOSED TRANSFER. Prior to any
proposed transfer of the Warrants or of the Warrant Shares, the Holder
thereof shall give written notice to the Company stating such Holder's
intention to effect such transfer and describing the circumstances of the
proposed transfer in sufficient detail, accompanied by either (i) an opinion
of counsel reasonably satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities
Act, or (ii) a "no action" letter from the staff of the Securities and
Exchange Commission ("Commission") to the effect that the staff will not
recommend that enforcement action be taken if the proposed transfer is
effected without registration. Subject to evidence of compliance with any
applicable state securities or "blue sky" law or laws, the Company shall
promptly notify the Holder in writing that such Holder may proceed with its
transfer as described, and, if the transfer is of Warrant Shares, shall
instruct its transfer agent to remove any stop-transfer restrictions against
the Warrant Shares when transferred as proposed.
Section 14. INDEMNIFICATION.
14.1 The Company will indemnify each Holder, each
of its officers, directors and partners, legal counsel, and accountants and
each person controlling such Holder within the meaning of Section 18 of the
Securities Act, with respect to which registration, qualification, or
compliance has been effected pursuant to this Agreement, and each
underwriter, if any, and each person who controls within the meaning of
Section 18 of the Securities Act any underwriter, against all expenses,
claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration,
qualification, or compliance, and will reimburse each such Holder, each of
its officers, directors, partners, legal counsel, and accountants and each
person controlling such Holder, each such underwriter, and each person who
controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability, or action, provided that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability, or expense arises out of or is based on any
untrue statement or omission in reliance upon written information furnished
to the Company by such Holder or underwriter and stated to be specifically
for use therein. It is agreed that the indemnity agreement contained in this
Section 16.1 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent has not been unreasonably withheld).
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14.2 Each Holder will, if Warrant Shares held by
him, her or it are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each
of its directors, officers, partners, legal counsel, and accountants and each
underwriter, if any, of the Company's securities covered by such a
registration statement, each person who controls the Company or such
underwriter within the meaning of Section 18 of the Securities Act, each
other such Holder and Other Stockholder, and each of their officers,
directors, and partners, and each person controlling such Holder or Other
Stockholder, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular, or other document, or
any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other
Stockholders, directors, officers, partners, legal counsel, and accountants,
persons, underwriters, or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided that
in no event shall any indemnity under this Section 16 exceed the gross
proceeds from the offering received by such Holder.
14.3 Each party entitled to indemnification
under this Section 16 ("Indemnified Party") shall give notice to the party
required to provide indemnification ("Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefor, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 16, to the extent such failure is not
prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement that does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the
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claim in question as an Indemnifying Party may reasonably request in writing
and as shall be reasonably required in connection with the defense of such
claim and litigation resulting therefrom.
14.4 If the indemnification provided for in this
Section 16 is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of
the Indemnified Party on the other in connection with the statement or
omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations; provided, however that
in no event shall any contribution by a Holder under this Section 16.4 exceed
the gross proceeds from the offering received from such Holder. The relative
fault of the Indemnifying Party and of the Indemnified Party shall be
determined by 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 Indemnifying Party or by the
Indemnified Party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or omission.
14.5 Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
Section 15. RULE 144 REPORTING. With a view to making available the
benefits of certain provisions of the Securities Act or the rules and
regulations of the Commission that may permit the sale of the restricted
securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information regarding the Company
available as those terms are understood and defined in Rule 144 under the
Securities Act; and
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934 at any time after it has become subject to such
reporting requirements.
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Section 16. DELAY OF REGISTRATION. No Holder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
Section 17. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement, without the approval of any Holder, in order
to cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions in regard to matters or questions arising hereunder
which the Company may deem necessary or desirable and which shall not be
inconsistent with the provisions of the Warrants and which shall not adversely
affect the interest of the Holders, or as provided herein. The Company will
notify Warrant Holder of any such supplement or amendment.
Section 18. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company and the Warrant Holder shall bind
and inure to the benefit of the Company and the Warrant Holders, and their
respective successors and assigns.
Section 19. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed or delivered to the
Company at its office at 1800 Avenue of the Stars, Suite 480, Los Angeles,
California 90067. Any notice mailed pursuant to this Agreement by the Company
to the Holders shall be in writing and shall be mailed or delivered to such
Holders at their respective addresses on the books of the Warrant Agent. Each
party hereto may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice in writing to the other party.
Section 20. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will not
merge or consolidate with or into any other corporation unless the corporation
resulting from such merger or consolidation (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Company, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
Section 21. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without giving effect to principles of conflict of laws.
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Section 22. BENEFITS TO THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Warrant Holders any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, and the Holders of the Warrants.
Section 23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
VITAFORT INTERNATIONAL CORPORATION
a Delaware Corporation
/s/ Mark Beychok
-----------------------------
Mark Beychok
President & CEO
Accepted as of the date written above:
WARRANT HOLDER
John Coppolino
By: /s/ John Coppolino
------------------------
Its:
------------------------
By:
------------------------
12
<PAGE>
CERTIFICATE NO. VBS-4B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND UNDER
APPLICABLE STATE LAW, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
CLASS B COMMON STOCK WARRANT
TO PURCHASE 54,167 SHARES OF COMMON STOCK OF
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
THIS CERTIFIES that, for value received, John Coppolino or registered
assigns ("Holder"), is entitled to purchase from VITAFORT INTERNATIONAL
CORPORATION, INC. a Delaware corporation, ("Company"), up to Fifty-Four Thousand
One Hundred Sixty-Seven(54,167), fully paid and nonassessable shares of common
stock of the Company ("Common Stock"), at any time commencing one year after a
registration statement covering the Warrant Shares (as defined in the Warrant
Agreement referred to herein) under the Securities Act of 1933, as amended, has
been declared effective by the Securities and Exchange Commission and
terminating at 5:00 P.M. Los Angeles time 21 months thereafter, at the purchase
price of $0.30 per share ("Exercise Price") (pending adjustment), as provided in
Section 1 of a the Warrant Agreement. This Warrant is issued pursuant to the
Warrant Agreement made by the Company dated November 30, 1995 in favor of all
Warrant Holders ("Warrant Agreement") and is subject to all the terms thereof,
including the limitations on transferability set forth in Section 13 thereof.
The Holder accepts the terms and provisions of the Warrant Agreement by
acceptance of this Warrant Certificate, and acknowledges receipt thereof.
The number of shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as set forth in
the Warrant Agreement.
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This Warrant may be exercised in whole or in part by presentation of this
Warrant with the Purchase Form on the last page hereof duly executed,
concurrently with payment of the Aggregate Exercise Price (as defined in Section
8 of the Warrant Agreement) at the office of the Company ("Warrant Agent").
Payment of the Aggregate Exercise Price shall be made at the option of the
Holder in cash or by check.
Upon any partial exercise of this Warrant, there shall be countersigned and
issued to the Holder a new Warrant in respect of the shares of Common Stock as
to which this Warrant shall not have been exercised. This Warrant may be
exchanged at the office of the Warrant Agent by surrender of this Warrant
Certificate, properly endorsed either separately or in combination with one or
more other Warrants, for one or more new Warrants entitling the Holder thereof
to purchase the same aggregate number of shares as were purchased on exercise of
the Warrant or Warrants exchanged. No fractional shares will be issued upon the
exercise of this Warrant, but the Company shall pay the cash value of any
fraction upon the exercise of one or more Warrants. This Warrant is
transferable at the office of the Warrant Agent, in the manner and subject to
the limitations set forth in the Warrant Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby, or
to the transfer hereof on the books of the Company, any notice to the contrary
notwithstanding, and until such transfer on such books, the Company may treat
the Holder hereof as the owner for all purposes.
This Warrant does not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
This Warrant shall not be valid or obligatory for any purpose until it
shall have been signed by the Company.
DATED: December 30, 1995 VITAFORT INTERNATIONAL CORPORATION
a Delaware corporation
/s/ Mark Beychok
-------------------------------
Mark Beychok
President & CEO
3
<PAGE>
Exhibit "A"
PURCHASE FORM
Dated ________________
The undersigned hereby irrevocably elects to exercise the Warrant represented by
this Warrant Certificate No. VBS-4B to the extent of purchasing __________
shares of Common Stock of VITAFORT INTERNATIONAL CORPORATION and hereby makes
the payment of $_____________ in payment of the Aggregate Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name: ___________________________________________________________________
(please type or print in block letters)
Address: ___________________________________________________________________
Signature: ___________________________________________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________, hereby sells, assigns
and transfers unto
Name: ___________________________________________________________________
Address: ___________________________________________________________________
the right to purchase Common Stock of VITAFORT INTERNATIONAL CORPORATION
represented by this Warrant Certificate No. VBS-4B to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _________________, Attorney, to transfer the same on the
books of the Company with full power of substitution.
Date: ________________________
Signature: ________________________
4
<PAGE>
EXHIBIT 99.29
CONSULTING AGREEMENT PAGE 1 of 7
BETWEEN
VITAFORT INTERNATIONAL CORPORATION
AND
CHRIS FURIE
TABLE OF CONTENTS
PARAGRAPH NO. PAGE NO.
- ------------- --------
1 Engagement by Consultant 2
2 Term 2
3 Compensation 2
4 Independent Contractor 3
5 Assignment 3
6 Non-Competition 3
7 Confidentiality 4
8 Termination 4
9 Disclaimer of Responsibility for Acts of Company 5
10 General Provisions 5
10.1 Governing Law and Jurisdiction 5
10.2 Attorneys Fees 5
10.3 Complete Agreement 5
10.4 Binding 6
10.5 Notices 6
10.6 Unenforceable Terms 6
10.7 Execution in Counterparts 6
10.8 Further Assurance 7
10.9 Incorporation by Reference 7
10.10 Miscellaneous provisions 7
<PAGE>
CONSULTING AGREEMENT PAGE 2 Of 7
THIS CONSULTING AGREEMENT ("Agreement"), is made and entered into on this 2nd
day of November, 1995 ("Effective Date") by and between Vitafort
International Corporation, a Delaware corporation ("Company") and CHRIS FURIE
("Consultant").
RECITALS
Company desires to engage Consultant to perform certain consulting services for
it and Consultant desires, subject to the terms and conditions of this
Agreement, to perform consulting services for the Company.
THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND UNDERTAKINGS HEREIN
CONTAINED AND FOR OTHER GOOD AND MUTUAL CONSIDERATION, THE RECEIPT AND
SUFFICIENCY WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. ENGAGEMENT BY CONSULTANT.
Company hereby engages Consultant and Consultant hereby agrees to hold himself
available to render, and to render at the request of the Company, independent
advisory and consulting services for the Company to the best of his ability,
upon the terms and conditions hereinafter set forth. Such consulting services
shall include, but not be limited to, consulting advice and performance of
services with respect to securing and improving sales, gross margin, effective
distribution, and customer relations. In connection with the foregoing, the
Company shall provide Consultant with copies of all public information about
the Company and its operations, as Consultant may reasonably request.
2. TERM.
This Agreement shall expire January 30, 1995, unless terminated or extended in
accordance with provisions of this Agreement.
3. COMPENSATION.
3.1) The Company agrees to reimburse all reasonable pre-approved out-of-
pocket costs directly related to those services.
<PAGE>
CONSULTING AGREEMENT PAGE 3 OF 7
3.2) Upon execution of this agreement, and subject to the approval of the
Company's Board of Directors, as minimum compensation for all
services rendered by Consultant under this Agreement, the Company
shall issue to Consultant 75,000 shares ("Common Shares") of the
Company's common stock, which will vest ratably by month (25,000
shares per month). Additionally, the Company will grant a two-year
option to purchase 25,000 shares at market price on the date hereof,
which will vest ratably upon achieving significant sales as a direct
result of Consultant's efforts. Consultant understands that
determination of vesting level will be made soley at the discretion
of Company management, and vesting is not certain. The Company
represents to Consultant that it will include the shares issued, and
shares underlying the option in the next registration statement for
the Common Shares on Form S-8, S-3, or comparable form. All expenses
of registration and qualification incurred in connection with a
registration of the Shares shall be borne by the Company except that
the holder of the Shares shall bear the fees and expenses of own
counsel, if any.
4. INDEPENDENT CONTRACTOR.
It is expressly agreed that Consultant is acting as an independent contractor in
performing his services hereunder, and this Agreement is not intended to, nor
does it create, an employer-employee relationship nor shall it be construed as
creating any joint venture or partnership between the Company and Consultant.
Consultant shall be responsible for all applicable federal, state and other
taxes related to Consultant's consulting fee and Company shall not withhold or
pay any such taxes on behalf of Consultant, including without limitation social
security, federal, state and other local income taxes. Since Consultant is
acting solely as an independent contractor under this Agreement, Consultant
shall not be entitled to insurance or other benefits normally provided by
Company to its employees.
5. ASSIGNMENT.
This Agreement is a personal one being entered into in reliance upon and in
consideration of the singular personal skill and qualifications of
Consultant. Consultant shall not voluntarily, or by operation of law
assign or otherwise transfer the obligations incurred on his part pursuant to
terms of this Agreement without the prior written consent of the Company. Any
attempt at assignment or transfer by Consultant of his obligations hereunder,
without such consent, shall be null and void.
6. NON-COMPETITION.
Consultant agrees that during the Term he shall not, directly or indirectly
(whether for compensation or otherwise), alone or as an agent, principal,
partner, officer, employee, trustee, director, shareholder, consultant or in
any other capacity own, manage, operate, join, control or participate in
The ownership, management, operation or control of, or furnish any capital to,
or be connected in any manner with, or provide any services as a consultant for
any business which has any activities or products directly competitive with the
activities and products of the Company.
<PAGE>
CONSULTING AGREEMENT Page 4 of 7
7. CONFIDENTIALITY
Consultant recognizes that during the course of Consultant's activities
on behalf of the Company, he will accumulate certain proprietary and
confidential information and trade secrets used in the Company's business and
will have divulged to him certain confidential and proprietary information and
trade secrets about the business, operations and prospects of the Company,
which constitute valuable business assets of the Company. Consultant hereby
acknowledges and agrees that such information ("Proprietary Information") is
confidential and proprietary and constitutes trade secrets and that the
Proprietary Information belongs to the Company and not to Consultant.
Consultant agrees, to the extent not prohibited by law, that he shall not, at
any time subsequent to the execution of this Agreement, whether during or after
the Term, disclose, divulge or make known, directly or indirectly, to any
person, or otherwise use or exploit in any manner any Proprietary Information
obtained by Consultant under this Agreement, except in connection with and to
the extent required by his performance of his duties hereunder for the
Company.
Upon termination of this Agreement Consultant shall deliver to Company all
tangible displays and repositories of Proprietary Information.
8. TERMINATION
This Agreement My be terminated on the occurrence of any one of the following
events:
8.1 The expiration of the Term hereof;
8.2 The mutual agreement of the parties;
8.3 At the Company's option, on the last day of the month in which
Consultant dies or becomes permanently incapacitated. 'Permanent
incapacity' as used herein shall mean mental or physical incapacity, or
both, reasonably determined by the Company's Board of Directors based upon
a certification of such incapacity by, in the discretion of the Company's
Board of Directors, either Consultant's regularly attending physician or a
duly licensed physician selected by the company's Board of Directors,
rendering Consultant unable to perform substantially all of his duties
hereunder and which appears reasonably certain to continue for at least
six consecutive months without substantial improvement. Consultant shall
be deemed to have 'become permanently incapacitated' on the date the
Company's Board of Directors has determined That Consultant is permanently
incapacitated and so notifies Consultant;
8.4 By the Company 'with cause," effective upon delivery of written notice to
Consultant given at any time (without any necessity for prior notice) if
any of the following shall occur:
(a) a material breach of This Agreement by Consultant, which breach has
not been cured within thirty (30) days after a written demand for
such performance is delivered to Consultant by the Company that
specifically identifies the manner in which The Company believes
That Consultant has breached this Agreement;
<PAGE>
CONSULTING AGREEMENT PAGE 5 OF 7
(b) any material acts or events which inhibit Consultant from fully
performing his responsibilities to the Company in good faith, such
as (i) a felony criminal conviction; (ii) any other criminal
conviction involving Consultant's lack of honesty or Consultant's
moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of
dishonesty, gross carelessness or gross misconduct.
8.5 Upon thirty days written notice from one party to the other.
9. DISCLAIMER OF RESPONSIBILITY FOR ACTS OF COMPANY.
The obligations of the Consultant described in this Agreement consist solely of
the furnishing of information and advice to the Company. In no event shall
Consultant be required by this Agreement to act as the agent of the Company or
otherwise to represent or make decisions for the Company. All final decisions
with respect to acts of the Company or its affiliates, whether or not made
pursuant to or in reliance on information or advice furnished by Consultant
hereunder, shall be those of the Company or such affiliates and Consultant shall
under no circumstances be liable for any expenses incurred or loss suffered by
Company as a consequence of such decisions.
10. GENERAL PROVISIONS.
10.1 GOVERNING LAW AND JURISDICTION. This Agreement shall be governed
by and interpreted in accordance with The laws of the State of
California. Each of the Parties hereto consents to such
jurisdiction for the enforcement of this Agreement and matters
pertaining to the transaction and activities contemplated
hereby.
10.2 ATTORNEYS' FEES. In the event a dispute arises with respect to this
Agreement, the party prevailing in such dispute shall be entitled
to recover all expenses, including, without limitation,
reasonable attorneys' fees and expenses incurred in
ascertaining such party's rights, in preparing to enforce or in
enforcing such party's rights under this Agreement, whether or
not it was necessary for such party to institute suit.
10.3 COMPLETE AGREEMENT. This Agreement supersedes any and all of Tha other
agreements, either oral or in writing, between the Parties with
respect to the subject matter hereof and contains all of The
covenants and agreements between the Parties with respect to such
subject matter in any manner whatsoever. Each Party to This
Agreement acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any
Party, or anyone herein, and that no other agreement, statement
or promise not contained in this Agreement shall be valid or
binding. This Agreement may be changed or amended only by an
amendment in writing signed by all of the Parties or their
respective successors-in-interest.
<PAGE>
CONSULTING AGREEMENT PAGE 6 OF 7
10.4 BINDING. This Agreement shall be binding upon and inure to the benefit
of the successors-in-interest, assigns and personal
representatives of the respective Parties, except that this
Agreement may not be assigned by Consultant without the prior
written consent of the Company.
10.2 NOTICES. All notices and other communications provided for or
permitted hereunder shall be made by hand delivery, first class mail,
telex or telecopied, addressed as follows:
PARTY:
Company Vitafort International Corporation
1800 Avenue of the Stars, Suite 480
Los Angeles, CA 90067
Attn: Mark Beychok, President
Telecopier No: (310) 556-1227
Consultant Chris Furie
8665 Burton Way, Unit 508
Los Angeles, CA 90048
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered;
five (5) business days after deposit in any "United States Post
Office in the continental United States, postage prepaid, if
mailed; when answered back, if telexed; and when receipt is
acknowledged or confirmed, if telecopied.
10.6 UNENFORCEABLE TERMS. Any provision hereofprohibited by law or
unenforceable under the law of any jurisdiction in which
such provision is applicable shall as to such jurisdiction only
be ineffective without affecting any other provision of this
Agreement. To the full extent, however, that such applicable law
way be waived to the end that this Agreement be deemed to be a
valid and binding agreement enforceable in accordance with its
terms, the Parties hereto hereby waive such applicable law
knowingly and understanding the effect of such waiver.
10.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in several
counterparts and when so executed shall constitute one agreement
binding on all the Parties, notwithstanding that all the Parties
are not signatory to the original and same counterpart.
<PAGE>
CONSULTING AGREEMENT PAGE 7 OF 7
10.8 FURTHER ASSURANCE. From time to time each Party will execute and
deliver such further instruments and will take such other action as
any other Party may reasonable request in order to discharge and
perform their obligations and agreements hereunder and to give effect
to the intentions expressed in this Agreement.
10.9 INCORPORATION BV REFERENCE. All exhibits referred to 'in this
Agreement are incorporated herein in their entirety by such
reference.
10.10 MISCELLANEOUS PROVISIONS. The various headings and numbers herein
and the grouping of provisions of this Agreement into separate
articles and paragraphs are for the purpose of convenience only
and shall not be considered a party hereof. The language in all
parts of this agreement shall in all cases by construed in
accordance with its fair meaning as if repared by all Parties to
the Agreement and not strictly for or against any of the Parties.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and year first above written.
"COMPANY" "CONSULTANT"
VITAFORT INTERNATIONAL CORPORATION
A Delaware Corporation
By: /s/ MARK BEYCHOK /s/ CHRIS FURIE
------------------------------- -----------------------------------
Mark Beychok, President CHRIS FURIE
<PAGE>
EXHIBIT 99.30
[VITAFORT--LETTERHEAD]
January 6, 1996
Chris Furie
8665 Burton Way, Unit 508
Los Angeles, CA 90048
Re: Contact Extension/Revision
Dear Chris,
Please accept this letter as confirmation that your consulting
contract has been amended to reflect your services as President of our
wholly owned sales subsidiary (Vitafort Distributors) and to reflect the
additional 200,000 options you can earn for your sales and organizational
efforts.at Vitafort Distributors.
As we discussed, we all believe that the grant of 2 year options to
purchase an additional 200,000 shares of Vitafort common stock at our current
Private Placement rate of $0.15/share should be plenty of incentive to make the
Vitafort Distribution project a success.
Good Selling!,
Mark Beychok
President & CEO
Agreed and Affirmed:
/s/ Chris Furie
------------------------------
Chris Furie
<PAGE>
EXHIBIT 99.31
EXCEPT AS PERMITTED BY SECTION 8 HEREOF, NO TRANSFER SHALL BE MADE AT
ANY TIME UNLESS THE COMPANY SHALL HAVE BEEN SUPPLIED WITH EVIDENCE
REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
VITAFORT INTERNATIONAL CORPORATION
______________________
OPTION TO PURCHASE
SHARES OF COMMON STOCK
AS HEREIN DESCRIBED
DATED: AS OF JANUARY 6, 1995
THIS CERTIFIES THAT, FOR VALUE RECEIVED
NAME: Chris Furie
ADDRESS: 8665 Burton Way, Unit 508
Los Angeles, CA
90048
or registered assigns (the "Holder") are entitled, subject to the terms set
forth herein and in the Consulting Contract, as amended in January 1996
(incorporated by reference), to purchase from Vitafort International
Corporation (the "Company"), a Delaware corporation, having its offices at
Suite 480, 1800 Avenue of the Stars, Los Angeles, California 90067, up to TWO
HUNDRED TWENTY FIVE Thousand (225,000) shares of the Company's common stock
subject to adjustment as set forth herein.
1. As used herein:
(a) "Common Stock" or "Common Shares" shall initially refer to the Company's
common stock including Underlying Securities, as more fully set forth in
Section 5 hereof.
(b) "Option Price" or "Common Share Price" shall be "EXERCISE PRICE" Cents ($
.15) per share.
(c) "Underlying Securities" or "Underlying Shares" or "Underlying Stock" shall
refer to the Common Shares or other securities or property issuable or
issued upon exercise of this Option.
(d) The options vest based upon mutual agreement based upon assigned projects
and approved time & expenses.
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<PAGE>
2. (a) The purchase rights represented by this Option may be exercised by the
Holder hereof, in whole or in part (but not as to less than a whole
Common Share), at any time, and from time to time, during the period
commencing this date, until DECEMBER 31, 1997 (the "Expiration Date"),
by the presentation of this Option, with the purchase form attached duly
executed, at the Company's office (or such office or agency of the
Company as it may designate in writing to the Holder hereof by notice
pursuant to Section 14 hereof), specifying the number of Common Shares as
to which the Option is being exercised, and upon payment by the Holder to
the Company in cash or by certified check or bank draft, in an amount
equal to the Option Price times the number of Common Shares then being
purchased hereunder.
(b) The Company agrees that the Holder hereof shall be deemed the record
owner of such Underlying Securities as of the close of business on the
date on which this Option shall have been presented and payment made for
such Underlying Securities as aforesaid. Certificates for the Underlying
Securities so obtained shall be delivered to the Holder hereof within a
reasonable time, not exceeding seven (7) days, after the rights
represented by this Option shall have been so exercised. If this Option
shall be exercised in part only or transferred in part subject to the
provisions herein, the Company shall, upon surrender of this Option for
cancellation or partial transfer, deliver a new Option evidencing the
rights of the Holder hereof to purchase the balance of the Underlying
Shares which such Holder is entitled to purchase hereunder. Exercise in
full of the rights represented by this Option shall not extinguish the
rights granted under Section 9 hereof.
3. Subject to the provisions of Section 8 hereof, (i) this Option is
exchangeable at the option of the Holder at the aforesaid office of the
Company for other Options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Common Shares as are
purchasable hereunder; and (ii) this Option may be divided or combined with
other Options which carry the same rights, in either case, upon presentation
hereof at the aforesaid office of the Company together with a written
notice, signed by the Holder hereof, specifying the names and denominations
in which new Options are to be issued, and the payment of any transfer tax
due in connection therewith.
4. Subject and pursuant to the provisions of this Section 4, the Option Price
and number of Common Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter in this Section 4.
(a) If the Company shall at any time subdivide its outstanding Common Shares
by recapitalization, reclassification, stock dividend, or split-up
thereof or other means, the number of Common Shares subject to this
Option immediately prior to such subdivision shall be proportionately
increased and the Option Price shall be proportionately decreased, and if
the Company shall at any time combine the outstanding Common Shares by
recapitalization, reclassification or combination thereof or other means,
the number of Common Shares subject to this Option immediately prior to
such combination shall be proportionately decreased and the Option Price
shall be proportionately increased. Any such adjustment and adjustment
to the Option Price shall become effective at the close of business on
the record date for such subdivision or combination.
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<PAGE>
(b) If the Company after the date hereof shall distribute to all of the
holders of its Common Shares any securities including, but not limited to
Common Shares, or other assets (other than a cash distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be required
to make such equitable adjustment in the Option Price and the type and/or
number of Underlying Securities in effect immediately prior to the record
date of such distribution as may be necessary to preserve to the Holder
of this Option rights substantially proportionate to and economically
equivalent to those enjoyed hereunder by such Holder immediately prior to
the happening of such distribution. Any such adjustment made reasonably
and in good faith by the Board of Directors shall be final and binding
upon the Holders and shall become effective as of the record date for
such distribution.
(c) No adjustment in the number of Common Shares subject to this Option or
the Option Price shall be required under this Section 4 unless such
adjustment would require an increase or decrease in such number of shares
of at least 1% of the then adjusted number of Common Shares issuable upon
exercise of the Option, provided, however, that any adjustments which by
reason of the foregoing are not required at the time to be made shall be
carried forward and taken into account and included in determining the
amount of any subsequent adjustment. If the Company shall make a record
of the Holders of its Common Shares for the purpose of entitling them to
receive any dividend or distribution and legally abandon its plan to pay
or deliver such dividend or distribution then no adjustment in the number
of Common Shares subject to the Option shall be required by reason of the
making of such record.
(d) In case of any capital reorganization or reclassification or change of
the outstanding Common Shares (exclusive of a change covered by
Section 4(a) hereof or which solely affects the par value of such Common
Shares) or in the case of any merger or consolidation of the Company with
or into another corporation (other than a consolidation or merger in
which the Company is the continuing corporation and which does not result
in any reclassification, change, capital reorganization or change in the
ownership of the outstanding Common Shares), or in the case of any sale
or conveyance or transfer of all or substantially all of the property of
the Company and in connection with which the Company is dissolved, the
Holder of this Option shall have the right thereafter (until the
expiration of the right of exercise of this Option) to receive upon the
exercise hereof, for the same aggregate Option Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock
or other securities or property receivable upon such reclassification,
change, capital reorganization, merger or consolidation, or upon the
dissolution following any sale or other transfer, by a holder of the
number of Common Shares of the Company equal to the number of common
shares obtainable upon exercise of this Option immediately prior to such
event; and if any reorganization, reclassification, change, merger,
consolidation, sale or transfer also results in a change in Common Shares
covered by Section 4(a), then such adjustment shall be made pursuant to
both this Section 4(d) and Section 4(a). The provisions of this Section
4(d) shall similarly apply to successive reclassification, or capital
reorganizations, mergers or consolidations, changes, sales or other
transfers.
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<PAGE>
(e) The Company shall not be required to issue fractional Common Shares upon
any exercise of this Option. As to any final fraction of a Common Share
which the Holder of this Option would otherwise be entitled to purchase
upon such exercise, the Company shall pay a cash adjustment in respect of
such final fraction in an amount equal to the same fraction of the market
value of a share of such stock on the business day preceding the day of
exercise or book value as determined by the Company's independent public
accountants if not publicly traded. The Holder of this Option, by his
acceptance hereof, expressly waives any right to receive any fractional
shares of stock upon exercise of this Option.
(f) As used herein, the current market price ("Market Price") per share at
any date shall be the price of Common Shares on the business day
immediately preceding the event requiring an adjustment hereunder and
shall be (A) if the principal trading market for such securities is an
exchange, the closing price on such exchange on such day provided if
trading of such Common Shares is listed on any consolidated tape, the
price shall be the closing price set forth on such consolidated tape or
(B) if the principal market for such securities is the over-the-counter
market, the high bid price on such date as set forth by NASDAQ or closing
price if listed on NASDAQ NMS or, if the security is not quoted on
NASDAQ, the high bid price as set forth in the NATIONAL QUOTATION BUREAU
sheet listing such securities for such day. Notwithstanding the
foregoing, if there is no reported closing price or high bid price, as
the case may be, on a date prior to the event requiring an adjustment
hereunder, then the current market price shall be determined as of the
latest date prior to such day for which such closing price or high bid
price is available.
(g) Irrespective of any adjustments pursuant to this Section 4 in the Option
Price or in the number, or kind, or class of shares or other securities
or other property obtainable upon exercise of this Option, and without
impairing any such adjustment the certificate representing this Option
may continue to express the Option Price and the number of Common Shares
obtainable upon exercise at the same price and number of Common Shares as
are stated herein.
(h) Until this Option is exercised, the Underlying Shares, and the Option
Price shall be determined exclusively pursuant to the provisions hereof.
(i) Upon any adjustment of this Option the Company shall give written
notice thereof to the Holder which notice shall include the number of
Underlying Securities purchasable and the price per share upon exercise
of this Option and shall set forth in reasonable detail the events which
resulted in such adjustment.
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<PAGE>
5. For the purposes of this Option, the terms "Common Shares" or "Common Stock"
shall mean (i) the class of stock designated as the common stock of the
Company on the date set forth on the first page hereof or (ii) any other
class of stock resulting from successive changes or reclassification of such
Common Stock consisting solely of changes from par value to no par value, or
from no par value to par value or changes in par value. If at any time, as
a result of an adjustment made pursuant to Section 4, the securities or
other property obtainable upon exercise of this Option shall include shares
or other securities of another corporation or other property, then
thereafter, the number of such other shares or other securities or property
so obtainable shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in Section 4, and all other
provisions of this Option with respect to Common Shares shall apply on like
terms to any such other shares or other securities or property. Subject to
the foregoing, and unless the context requires otherwise, all references
herein to Common Shares shall, in the event of an adjustment pursuant to
Section 4, be deemed to refer also to any other shares or other securities
or property when obtainable as a result of such adjustments.
6. The Company covenants and agrees that:
(a) During the period within which the rights represented by this Option may
be exercised, the Company shall, at all times, reserve and keep
available out of its authorized capital stock, solely for the purposes
of issuance upon exercise of this Option, such number of its Common
Shares as shall be issuable upon the exercise of this Option and at its
expense will obtain the listing thereof on all quotation systems or
national securities exchanges on which the Common Shares are then
listed; and if at any time the number of authorized Common Shares shall
not be sufficient to effect the exercise of this Option, the Company
will take such corporate action as may be necessary to increase its
authorized but unissued Common Shares to such number of shares as shall
be sufficient for such purpose; the Company shall have analogous
obligations with respect to any other securities or property issuable
upon exercise of this Option;
(b) All Common Shares which may be issued upon exercise of the rights
represented by this Option will, upon issuance, be validly issued, fully
paid, non-assessable and free from all taxes, liens and charges with
respect to the issuance thereof; and
(c) All original issue taxes payable in respect of the issuance of Common
Shares upon the exercise of the rights represented by this Option shall
be borne by the Company, but in no event shall the Company be
responsible or liable for income taxes or transfer taxes upon the
transfer of any Options.
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<PAGE>
7. The Company may issue a call of this Warrant ("Call Notice") at any time
after the Effective Registration Date, but prior to the expiration of this
Warrant, by written notice to Warrant Holder, provided only that the Closing
Price (hereinafter defined) of the Company's Common Stock has theretofore
equalled or exceeded Forty-five Cents ($0.45) per Share for ten (10)
consecutive Trading Days after the Effective Registration Date. This Warrant
shall expire and become null and void thirty (30) days after the issuance
of the Call Notice. The Warrant Holder may exercise this Warrant and
purchase some or all of the Shares then subject to this Warrant within said
thirty (30)-day period, but may not thereafter exercise this Option or
purchase any of the Shares. If the Warrant is not exercised within said
thirty (30) day period, the Company will have the right to redeem any or
all outstanding and unexercised Options at a redemption price of $0.0001
per Warrant. For purposes of this Section 7.3, "Closing Price" means (a)
if the Common Stock is then listed on an established stock exchange or
exchanges, the average bid and ask price per share for each Trading Day on
the principal exchange on which the Common Stock is traded, as reported in
The Wall Street Journal; or (b) if the Common Stock is not then listed on
an exchange, the price per share for the Common Stock in the
over-the-counter market as quoted on NASDAQ (either National Market System
or Small Cap Issues or the OTC Electronic Bulletin Board), for each Trading
Day, as reported in The Wall Street Journal. If the Common Stock is not then
listed on an exchange or quoted on NASDAQ or the OTC Electronic Bulletin
Board, the Common Stock shall be deemed to have a Closing Price of less
Forty-five Cents ($0.45) per share on such Trading Day. For purposes of this
Section 7.3, the term "Trading Day" shall mean a day on which the New York
Stock Exchange is open for trading.
8. Until exercised, this Option shall not entitle the Holder hereof to any
voting rights or other rights as a shareholder of the Company.
9. No transfer of all or a portion of the Option or Underlying Securities
shall be made at any time unless the Company shall have been supplied with
evidence reasonably satisfactory to it that such transfer is not in
violation of the Securities Act of 1933, as amended (the "Act"). Subject to
the satisfaction of the aforesaid condition and upon surrender of this
Option or certificates for any Underlying Securities at the office of the
Company, the Company shall deliver a new Option or Options or new
certificate or certificates for Underlying Securities to and in the name of
the assignee or assignees named therein. Any such certificate may bear a
legend reflecting the restrictions on transfer set forth herein.
10. If this Option is lost, stolen, mutilated or destroyed, the Company shall,
on such terms as to indemnity or otherwise as the Company may reasonably
impose, issue a new Option of like denomination, tenor and date. Any such
new Option shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Option shall be at any time enforceable by anyone.
11. Any Option issued pursuant to the provisions of Section 9 hereof, or upon
transfer, exchange, division or partial exercise of this Option or
combination thereof with another Option or Options, shall set forth each
provision set forth in Sections 1 through 15, inclusive, of this Option as
each such provision is set forth herein, and shall be duly executed on
behalf of the Company by its chief executive officer or chief operating
officer.
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<PAGE>
12. Upon surrender of this Option for transfer or exchange or upon the exercise
hereof, this Option shall be cancelled by the Company, and shall not be
reissued by the Company and, except as provided in Section 2 in case of a
partial exercise, Section 3 in case of an exchange or Section 8 in case of a
transfer, or Section 9 in case of mutilation. Any new Option certificate
shall be issued promptly but not later than fifteen (15) days after receipt
of the old Option certificate.
13. This Option shall inure to the benefit of and be binding upon the Holder
hereof, the Company and their respective successors, heirs, executors, legal
representatives and assigns.
14. All notices required hereunder shall be in writing and shall be deemed given
when telegraphed, delivered personally or within two (2) days after mailing
when mailed by certified or registered mail, return receipt requested, to
the party to whom such notice is intended, at the address of such other
party as set forth on the first page hereof, or at such other address of
which the Company or Holder has been advised by the notice hereunder.
15. In the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
Holders shall be enforceable to the fullest extent permitted by law.
16. The validity, interpretation and performance of this Option and of the
terms and provisions hereof shall be governed by the laws of the State of
California applicable to agreements entered into and performed entirely
in such state.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of JANUARY 6, 1996.
VITAFORT INTERNATIONAL CORPORATION
By: /s/ Mark Beychok
-------------------------------------
Mark Beychok, Chief Executive Officer
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<PAGE>
PURCHASE FORM
TO BE EXECUTED
UPON EXERCISE OF OPTION
The undersigned record holder of the within Option hereby irrevocably elects to
exercise the right to purchase ___________ Common Shares evidenced by the within
Option, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full. The undersigned requests that
certificates for such shares and warrants shall be issued in the name set forth
below.
____________, 19__
___________________________
Signature
___________________________
Print Name of Signatory
___________________________
Name to whom certificates are to be issued if different from above
___________________________
(Street Address)
___________________________
(City, State Zipcode)
___________________________
(Tax Payer I.D. Number)
If said number of shares and warrants shall not be all the shares purchasable
under the within Option, the undersigned requests that a new Option for the
unexercised portion shall be registered in the name of:
___________________________
(Please Print)
___________________________
(Street Address)
___________________________
(City, State Zipcode)
___________________________
(Tax Payer I.D. Number)
___________________________
Signature
___________________________
Print Name of Signatory
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<PAGE>
FORM OF ASSIGNMENT
FOR VALUE RECEIVED __________________________, hereby sells, assigns and
transfers to _____________________________,(Social Security or I.D. No._______)
the within Option, or that portion of this Option purchasable for _______
common shares together with all rights, title and interest therein, and does
hereby irrevocably constitute and appoint _____________________________________
attorney to transfer such Option on the register of the within named Company,
with full power of substitution.
___________________________
(Signature)
Dated: ____________, 19__
Signature Guaranteed:
___________________________
(INTENTIONALLY BLANK)
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