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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: February 5, 1997
ZAXIS INTERNATIONAL INC.
Delaware 0-15746 68-0080601
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(State of Incorporation) (Commission File Number) (IRS Employer Number)
1890 Georgetown Road, Hudson, Ohio 44236
(216) 650-0444
Exhibit index on page 3
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Item 5. Other Events
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On February 5, 1997, at a special meeting, the Board of Directors of Zaxis
International Inc., (the "Company"), took the following actions:
1. Accepted the resignations of four directors, Gregory Bambeck, Jon Roszkowski,
Vincent Tabatneck and Steven Tsengas.
2. Authorized the execution of a Financing and Shareholder Agreement (the
"Agreement") with MML Management Limited ("MML").
3. Authorized a consulting agreement with Conaly Bedell.
4. Elected Mr. Bedell as a Director and Chairman of the Board.
5. Elected Alan Scott and Craig Jones to the Board of Directors.
Mr. Bedell is the president of Bedell Incorporated, a business consulting firm
and Alan Scott and Craig Jones are principals of MML.
Under the Agreement, the Company borrowed $65,000 from MML in exchange for a one
year 9.25% promissory note and a warrant for the purchase of 43,333 shares of
Company Common Stock at $1.50 per share, exercisable through February 5, 1998.
The note is collateralized by the Company's accounts receivable and a certain
patent.
The Agreement provides for additional financing by MML for the Company in the
amounts indicated upon the occurrence of the following events:
- - If the Company raises $250,000 in equity or debt by March 3, 1997, MML will
provide $250,000 in additional financing on the same terms as the financing
obtained by the Company.
- - If the Company is successful in obtaining a contract to provide gel cassettes
to a certain distributor by March 31, 1997, MML will provide $100,000 in
additional financing on the same terms as the most recent financing obtained
by the Company from third parties.
- - If the Company is successful in obtaining a contract to supply precast DNA
sequencing gels to a certain company by April 30, 1997, MML will provide
$100,000 in additional financing on the same terms as the most recent
financing obtained by the Company from third parties.
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- - If the Company obtains approval by December 15, 1997, from the Board of
Directors for a clinical testing and marketing plan for the Company's
Lipoprotein Assay Kit, MML will provide $400,000 in additional financing on
the same terms as the most recent financing obtained by the Company from
third parties.
- - If the Company meets the above terms, MML will use its good faith best
efforts to provide $350,000 in additional financing on the same terms as the
most recent financing obtained by the Company from third parties, provided
that this amount will be reduced by the amount that any third party debt
holder accepts Common Stock in lieu of debt repayment in accordance with the
terms of Warrants previously issued.
Item 7. Exhibits Pages
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10. Material Contracts
Financing and Shareholder Agreement 4-20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ZAXIS INTERNATIONAL INC.
/s/ John V. Danis
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Date: February 17, 1996 John V. Danis
President and Chief Executive Officer
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FINANCING AND SHAREHOLDER AGREEMENT
THIS FINANCING AND SHAREHOLDER AGREEMENT ("Agreement") entered into this
fifth day of February, 1997, between Zaxis International Inc. a Delaware
Corporation ("Company"), and MML Management LTD, an Australian limited liability
company ("MML").
Company and MML agree that MML will purchase, and Company will issue to
MML, securities of Company upon the terms and conditions of this Agreement.
1. PURCHASE OF PROMISSORY NOTE. On the date hereof, Company shall issue to
MML Company's Promissory Note and Security Agreement in the form of Attachment 1
hereto in original principal amount of U.S.$65,000 ("Note"), and MML shall pay
to Company U.S. $62,400, net of a success fee in the amount of $2,600, in
immediately available funds.
Upon confirmation of Company's receipt of U.S.$62,400, as provided in the
Note, Company shall also execute and deliver to MML:
(a) the Note;
(b) Warrant Agreement in the form of Attachment 2 hereto ("Warrant
Agreement"); and
(c) Warrant Certificate for 43,333 shares of Common Stock of Company in the
form attached to the Warrant Agreement.
2. BOARD OF DIRECTORS REPRESENTATION. Immediately following the completion
of the actions described in Section 1, the Board of Directors of Company shall
accept the resignations of Vincent Tabatneck, Steven Tsengas, Gregory Bambeck
and Jon Roszkowski as Directors and elect the following individuals designated
by MML as Directors to fill three of the vacancies created by the foregoing
resignations: Alan Scott, Craig Jones and Conaly Bedell.
3. ADDITIONAL FINANCING COMMITMENT BY MML. In consideration of the transfer
of control of the Board of Directors to MML, MML commits to provide U.S.$850,000
of additional financing to Company, conditioned on Zaxis' performance of the
following terms:
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(a) If Company raises up to U.S.$250,000 in equity or debt financing by
March 3, 1997, within thirty (30) days after Company provides MML with written
confirmation of such financing, MML will provide up to U.S.$250,000 in
additional financing on a dollar-for-dollar basis upon the identical terms as
the financing obtained by Company from third parties. If Company raises more
than U.S.$250,000 from third parties, MML's obligation under this Agreement will
not be reduced.
(b) Within ten (10) days after Company provides MML with written
confirmation of the receipt by Company (no later than March 31, 1997) of an
exclusive OEM supply contract with Sigma-Aldrich Corporation, for gel cassettes,
MML shall provide Company with U.S.$100,000 in additional financing upon terms
identical to the then most recent financing obtained by Company from third
parties.
(c) Within ten (10) days after Company provides MML with written
confirmation of the receipt by Company (no later than April 30, 1997) of a
contract with Amersham Life Science Inc., for Company to supply annually DNA
sequencing gels in quantities of 2,500 per month or more, MML shall provide
Company with U.S.$100,000 in additional financing, upon terms identical to the
then most recent financing obtained by Company from third parties.
(d) Upon approval of the Board of Directors (no later than December 15,
1997) of a plan, based on clinical testing and a marketing plan, to complete and
market the Company's Lipoprotein Assay Kit ("LFS") MML shall provide Company
with U.S.$400,000 in additional financing, upon terms identical to the then most
recent financing obtained by Company from third parties.
4. ADDITIONAL FINANCING.
(a) Company will encourage third parties holding Company indebtedness to
exercise their warrants or otherwise to convert or exchange such indebtedness
into or for Common Stock in lieu of repayment of such indebtedness by Company.
(b) If Company takes all actions described in Section 3, MML commits to use
its good faith best efforts to provide Company with U.S.$350,000 in additional
financing, upon terms identical to the then most recent financing obtained by
Company from third parties.
(c) If, and to the extent that Company is successful in persuading third
party holders of Company indebtedness to accept
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Common Stock in lieu of repayment of indebtedness, MML's obligation to provide
$350,000, over and above the $65,000 in Section 1 and the $850,000 in Section 3,
shall be reduced on a dollar-for-dollar basis in the amount of such indebtedness
surrendered for Common Stock.
(d) MML acknowledges that, after the Company's operating financial
obligations are satisfied, priority consideration in repayment of outstanding
indebtedness shall be given to repaying directors who made emergency loans based
on their personal credit lines and individuals who made loans since January 1,
1997, to enable Company to cover payroll.
5. RELINQUISHMENT OF CONTROL OF BOARD.
If, for whatever reason, by February 6, 1998 MML has not provided or arranged
for an aggregate of at least U.S.$915,000 in financing which has been received
by Company, within five (5) days after MML's receipt of the written request of
the President of the Company, MML shall request that at least one of the
individuals designated by it to be a Director of Company submit his written
resignation from the Board. If one or more of such individuals does not submit
his written resignation within ten (10) days after MML's receipt of such notice,
MML shall vote all shares of Common Stock of Company which it owns to hold a
special shareholders meeting and shall vote all such shares in favor of the
election as Directors of such individuals designated by those Directors who are
not designated by MML so that after such vote individuals designated by MML
constitute less than a majority of the members of the Board of Directors. If MML
does not provide or arrange for an aggregate of at least U.S. $915,000
financing, but does cause the resignation of an MML designated Director as
provided in this Section 5, Company will not assert any claims against MML for
MML's failure to provide such financing.
6. APPLICABLE LAW; REMEDIES. This Agreement is made in Hudson, Ohio, and
shall be governed by, and shall be interpreted and construed in accordance with,
the laws of the State of Ohio applicable to contracts and agreements to be
performed solely within the State of Ohio by residents of the State of Ohio,
i.e., without regard to choice of law principles. Company and Payee each
irrevocably submits to the jurisdiction of any federal or Ohio court sitting in
the vicinity of Hudson, Ohio over any suit, action or proceeding arising out of
or relating to this Note. Company and Payee each irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have the laying of the venue of any such suit, action or proceeding brought in
such court and any claim that any suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. MML acknowledges that it will
be impossible to measure in money the damages that would be suffered by Company
if MML fails to comply with any of its obligations under Section 5 of this
Agreement and that in the event of any such failure, Company will be
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irreparably damaged and will not have an adequate remedy at law. Company shall,
therefore, be entitled to injunctive relief, including specific performance, to
enforce the terms of Section 5 of this Agreement, and if any action should be
brought in equity to enforce Section 5 of this Agreement, MML shall not raise
the defense that there is an adequate remedy at law.
IN WITNESS WHEREOF, Company and MML have executed this Financing and
Shareholder's Agreement on this fifth day of February, 1997.
MML: ZAXIS:
MML MANAGEMENT LTD. ZAXIS INTERNATIONAL INC.
By: By:
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Alan Scott John V. Danis
Its: President
Its:
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ATTACHMENT 1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. THIS NOTE CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES
LAWS AND WILL NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS.
PROMISSORY NOTE AND SECURITY AGREEMENT
$65,000.00 Hudson, Ohio
February 5, 1997
FOR VALUE RECEIVED, Zaxis International Inc., a Delaware corporation
(the "Company"), hereby promises to pay to the order of MML Management LTD with
an office at 19 Willis Street, Armadale 3143 Melbourne, Australia ("Payee"), the
principal sum of Sixty-Five Thousand Dollars ($65,000), together with interest
thereon at the rate hereinafter specified.
1. REPAYMENT. On February 5, 1998 (the "Maturity Date"), the
outstanding principal balance, and accrued and unpaid interest thereon, shall be
due and payable in full.
2. INTEREST. The Company shall pay interest at the Maturity Date on the
unpaid principal amount of this Note at an annual rate equal to 9.25%.
3. PAYMENT. Amounts due under this Note are payable in lawful money of
the United States of America at Payee's address set forth above or at such other
location as may be designated by payee.
4. PREPAYMENT. The Company shall have the right to prepay any amount of
interest or principal due under this Note at any time without penalty or
premium. Any such prepayment shall first be applied to the amount of interest
accrued to the date of such prepayment, then to the principal amount of this
Note.
5. WARRANTS. As additional consideration for the loan of funds
evidenced by this Note, the Company has granted to Payee certain warrants
pursuant to a Warrant Agreement of even date herewith.
6. OPTIONAL REPAYMENT. Payee may elect to accept repayment in the form
of shares of Zaxis International Inc. Common Stock by exercising the Warrants
pursuant to the Warrant Agreement.
7. EVENTS OF DEFAULT. In the event of any one of the following:
(a) The Company shall default in the payment of any amount
under this Note when the same becomes due;
(b) The Company shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) make a general
assignment for the benefit of creditors, (iii) commence a
voluntary case
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under any state or federal bankruptcy laws (as now or
hereafter in effect), (iv) acquiesce to or fail to have
dismissed, within thirty (30) days, any petition filed against
it in any involuntary case under such bankruptcy laws, or (v)
take any action for the purpose of effecting any of the
foregoing; or
(c) The Company shall admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease
operations of its present business;
then, at the option of Payee, the entire amount of the principal of and interest
on this Note shall at once become due and payable, without presentment, demand,
protest or notice of protest of any kind, all of which are expressly waived by
the Company. In addition, upon any such event of default, Payee may exercise any
of the remedies provided by law.
8. GRANT OF SECURITY INTEREST. Company hereby grants to payee a
security interest in the following property (collectively, the "Collateral"):
(a) all notes receivable and accounts receivable, both now owned and
hereafter acquired and all proceeds and products thereof and
(b) U. S. Patent Number 5,589,104.
Payee agrees that it will proceed to foreclose on its lien on the
patent only if, and to the extent that, foreclosure on the receivable does not
satisfy Company's obligations under this Note.
Company has delivered to Payee financing statements on Form UCC-1 and
the filing required by the U. S. Patent and Trade Mark Office in order to
perfect the security interest granted by this Section.
9. RELEASE OF SECURITY INTEREST. Simultaneously with the payment or
prepayment of this Note, whether by payment in cash or by issuance of shares of
Common Stock of Company pursuant to Warrant Agreement of even date, Payee shall
deliver to Company executed releases sufficient to terminate the security
interest granted by Section 8.
10. Miscellaneous.
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(a) No waiver, consent or other binding agreement shall deemed to
have been made by Payee or be binding upon Payee unless
specifically granted in writing, which writing shall be
strictly construed. This Note evidences the absolute and
unconditional obligation of the Company to pay the principal
of, and interest on, this Note. This Note is non-negotiable.
(b) Payee shall not, solely by holding this Note, be entitled to
vote or receive dividends or be considered a shareholder of
the Company for any purpose, nor shall anything in this note
be construed to confer on Payee, any rights of a
shareholder of the Company or any right to vote, to give
or withhold consent to any corporate action, to receive
notices of
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meetings of shareholders, to receive dividends or subscription
rights or otherwise.
(c) This note is made in Hudson, Ohio, and shall be governed by,
and shall be interpreted and construed in accordance with, the laws
of the State of Ohio applicable to contracts and agreements to be
performed solely within the State of Ohio by residents of the State
of Ohio, i.e., without regard to choice of law principles. Company
and Payee each irrevocably submits to the jurisdiction of any
federal or Ohio court sitting in the vicinity of Hudson, Ohio over
any suit, action or proceeding arising out of or relating to this
Note. Company and Payee each irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or
hereafter have the laying of the venue of any such suit, action or
proceeding brought in such court and any claim that any suit,
action or proceeding brought in such a court has been brought in an
inconvenient forum.
(d) Company further agrees to execute any and all other documents,
security agreements, assignments or other instruments, and to cause
its wholly-owned subsidiary, Zaxis, Inc., to do likewise so as to
further perfect or otherwise secure the collateral described above
or perfect such security interest, or as may be required by the
United States Patent Office or Payee.
IN WITNESS WHEREOF, the Company has executed this Note as of the date
first above written.
ZAXIS INTERNATIONAL INC.
By
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John V. Danis, President
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Attachment 2
MML Management Ltd.
Name of Investor
ZAXIS INTERNATIONAL INC.
WARRANT AGREEMENT
THE WARRANTS, INCLUDING THE UNDERLYING SHARES OF COMMON STOCK, OFFERED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. THE WARRANTS, INCLUDING THE UNDERLYING SHARES OF COMMON STOCK,
CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE RESTRICTIONS ON TRANSFERABILITY CONTAINED IN THIS AGREEMENT
AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS AND WILL NOT BE TRANSFERRED OF
RECORD EXCEPT IN COMPLIANCE WITH SUCH AGREEMENT AND SUCH LAWS.
1. Issuance of Warrants; Form of Warrants. Pursuant to the terms and
conditions of this Warrant Agreement, Zaxis International Inc., a Delaware
corporation (the "Company") hereby agrees to issue and deliver Warrants (the
"Warrants") to purchase 43,333 shares of Common Stock, no par value (the "Common
Stock") of the Company. The text of the Warrant and of the form of election to
purchase shares shall be substantially as set forth in EXHIBIT A attached
hereto. The Warrants are not transferable; provided, however, the Warrants may
be transferred to persons who are "accredited investors" within the meaning of
Rule 501 promulgated under the Securities Act of 1933 upon the prior written
consent of the Company, which consent will not be unreasonably withheld.
2. Registration. The Warrants shall be registered on the books of the
Company (the "Warrant Register"). The Company shall be entitled to treat the
Investor as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Warrant on the
part of any other person, and shall not be liable for any registration or
transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with knowledge of such facts that its participation
therein amounts to bad faith.
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3. Term of Warrants; Exercise of Warrants.
Subject to the provisions of this Agreement, the Warrants will be
exercisable by the Investor from and after the date hereof until 5:00
p.m. Cleveland, Ohio local time, on February 5, 1998 (the "Term") and
after such time period will no longer be exercisable.
(b) Each Warrant entitles the Investor to purchase one (1) share of
Common Stock at a purchase price of $1.50 per share of Common Stock,
subject to adjustment (the "Warrant Price").
(c) Subject to the provisions of this Agreement, the Investor shall
have the right to purchase from the Company (and the Company shall
issue and sell to the Investor) the number of fully paid and
nonassessable shares of Common Stock specified in such Warrants, upon
surrender to the Company, or its duly authorized agent, of such
Warrants, with the form of election to purchase duly filled in and
signed, and upon payment to the Company of the Warrant Price, for the
number of shares of Common Stock in respect of which such Warrants are
then exercised. The date of exercise of any Warrant shall be deemed to
be the date of its receipt by the Company duly filled in and signed and
accompanied by proper payment as hereinafter provided. Payment of such
Warrant Price may be made in cash, certified or official bank check
and/or by surrender of the Promissory Note and Security Agreement of
even date.
(d) Upon surrender of Warrants, and payment of the Warrant Price as
aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to the Investor a certificate or certificates for
the number of shares of Common Stock so purchased upon the exercise of
such Warrants.
(e) On any partial exercise, the Company shall promptly issue and
deliver to the holder of the Warrant a new Warrant in the name of that
holder providing for the right to purchase the number of shares of
Common Stock as to which the Warrant has not been exercised.
4. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of shares of Common Stock upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue or delivery of any shares in a name other than that of the
Investor.
5. Reservation of Common Stock. There have been reserved (or will be
reserved in the future, if necessary) out of the authorized and unissued shares
of Common Stock, a number of shares sufficient to provide for the exercise of
the rights of purchase represented by the Warrants, and the transfer agent for
the Common Stock and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the
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exercise of any of the rights of purchase aforesaid are hereby irrevocably
authorized and directed at all times until after the expiration of the Term to
reserve such number of authorized and unissued shares as shall be requisite for
such purpose.
6. Adjustment of Warrant Price and Number of Warrant Shares. The number
and kind of securities purchasable upon the exercise of each Warrant and the
Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter defined.
6.1 Mechanical Adjustments. The number of shares purchasable upon
the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock,
(iii) combine the outstanding Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing corporation), the Warrant Price
in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification,
and/or the number and kind of shares or other securities issuable
upon exercise of the Warrants on such date shall be proportionately
adjusted so that after such time the Investor shall be entitled to
receive the aggregate number and kind of shares or other securities
which, if such Warrant had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the
Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) No adjustment in the Warrant Price shall be required unless
such adjustment would require an increase or decrease of at least
$.25 in such price; provided, however, that any adjustments which by
reason of this Section 6.1(b) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 6.1 shall be made to the nearest
cent and to the nearest one-hundredth of a share, as the case may
be.
(c) Shares of Common Stock at any time owned by the Company
shall not be deemed to be outstanding for purposes of any
computation under this Section 6.1.
6.2 No Adjustments Upon Certain Events. The exercise price will not
be adjusted on the (a) exercise of the Warrants, (b) issuance or sale of Common
Stock upon the exercise of any rights, warrants, or options to subscribe for or
purchase Common
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Stock, or (c) amendment to or change in the terms of any rights, warrants or
options to subscribe for or purchase Common Stock.
6.3 No Adjustment for Dividends. Except as provided in Section 6.1,
no adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise or conversion of a Warrant.
6.4 Fractional Shares. If the number of shares of Common Stock
purchasable upon the exercise of each Warrant is adjusted pursuant to this
Section 6, the Company shall nevertheless not be required to issue fractions of
shares upon exercise of the Warrants. With respect to any fraction of a share
called for upon any exercise of a Warrant, the Company shall pay to the Investor
an amount in cash equal to such fraction multiplied by the market price of such
fractional share.
7. No Rights as Stockholders; Notices to Holders. Nothing contained in
this Agreement or in any of the Warrants shall be construed as conferring upon
the Investor the right to vote or to receive dividends or to consent to or
receive notice as shareholders in respect of any meeting of shareholders for the
election of directors of the Company or on any other matter, or any rights
whatsoever as a shareholder of the Company as a result of being a holder of
Warrants.
8. Notices. All notices, requests, demands and other communication
under this Agreement must be in writing and will be deemed duly given, unless
otherwise expressly indicated to the contrary in this Agreement, (a) when
personally delivered, (b) upon receipt of a telephonic facsimile transmission
with a confirmed telephonic transmission answer back, (c) one (1) business day
after having been dispatched by an internationally recognized overnight courier
service, or (d) three (3) days after being deposited in the United States mail,
postage prepaid, addressed to the record holder of the Warrant as set forth in
the Warrant Register and to the Company at its principal executive office, as
the case may be.
9. Supplements and Amendments.
(a) Mutual Modifications. The Company and the Investor may from time
to time supplement or amend this Agreement 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 and the Investor may deem necessary
or desirable and which shall not be inconsistent with the provisions of
the Warrants.
(b) Company's Discretion. Upon prior written notice to Investor, the
Company may, in its sole and absolute discretion, (a) decrease the
Warrant Price, (b) extend the Term, or (c) increase the number of
shares to be received upon exercise of the Warrants.
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10. Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Investor shall bind and inure to the
benefit of their respective successors and permitted assigns hereunder.
11. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Investor, any legal or equitable right, remedy or claim under this Agreement.
This Agreement shall be for the sole and exclusive benefit of the Company and
the Investor.
12. Captions. The captions of the sections and subsections of this
Agreement have been inserted for convenience only and shall have no substantive
effect.
IN WITNESS WHEREOF, the undersigned has executed this Warrant Agreement
this ______ day of __________, 1997.
(Check One)
--------------------------------
_____ Individually Signature of Investor
_____ Joint tenants with -------------------------------
right of survivorship Investor's Name-please print
_____ Tenants-in-common --------------------------------
(each must sign) Title (if applicable)
_____ In partnership* --------------------------------
--------------------------------
_____ As trustee** --------------------------------
Investor's Daytime Telephone Number
_____ In corporation*** --------------------------------
Social Security of Federal Identification No.
--------------------------------
Signature of Additional Investor
(i.e., joint tenant or tenant-in-common)
--------------------------------
Additional Investor's Name-please print
(i.e., joint tenant or tenant-in-common)
--------------------------------
Title (if applicable)
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* Please include a copy of partnership agreement or other document authorizing
investment and signature.
** Please include trust, agency or other agreement or document authorizing
investment and signature.
*** Please include certified corporate resolution or other document authorizing
investment and signature.
- --------------------------------------------------------------------------------
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ACCEPTANCE
On behalf of Zaxis International Inc., the undersigned hereby accepts
the foregoing Warrant Agreement this _____ day of ___________, 1997.
ZAXIS INTERNATIONAL INC.
By:
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Its:
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EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OR CONVERSION THEREOF ARE SUBJECT TO CERTAIN
RESTRICTIONS, INCLUDING RESTRICTIONS ON TRANSFER, AS PROVIDED IN THE WARRANT
AGREEMENT PURSUANT TO WHICH THE WARRANTS WERE ISSUED.
EXERCISABLE THROUGH __________________, 199__
THIS CERTIFIES THAT, for value received, _____________ (the
"Investor"), is the owner of Warrants (the "Warrants") to purchase ___________
shares of the Common Stock, no par value (the "Common Stock") of Zaxis
International Inc., a Delaware corporation (the "Company"), at the purchase
price of $1.50 per share, subject to adjustment (the "Warrant Price"). Payment
of the Warrant Price may be made in cash, by certified or official bank check
and/or by surrender of the Promissory Note and Security Agreement of even date.
As provided in that certain Warrant Agreement between the Company and the
Investor (the "Warrant Agreement"), the Warrant Price and the number or kind of
shares which may be purchased upon the exercise of the Warrants evidenced by
this Warrant Certificate are, upon the happening of certain events, subject to
modification and adjustment. In certain events, the Warrants are subject to
redemption, in whole or in part, at the option of the Company.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of the Warrant Agreement, which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof and to which Warrant Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Company and the Investor.
The Investor shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company which
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained in the Warrant Agreement or herein be construed to confer
upon the Investor any of the rights of a shareholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise, until the
Warrant or Warrants evidenced by this Warrant Certificate shall have been
exercised as provided in the Warrant Agreement.
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The securities evidenced by this Warrant Certificate have not been
registered under the Securities Act of 1933.
IN WITNESS WHEREOF, the Company has caused its Chief Executive Officer
to execute this Warrant Certificate (or such officer's facsimile signature to be
printed hereon).
Dated: , 1997
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ZAXIS INTERNATIONAL INC.
By:
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John V. Danis
Its:
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irreparably damaged and will not have an adequate remedy at law. Company
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce the terms of Section 5 of this Agreement, and if any
action should be brought in equity to enforce Section 5 of this Agreement, MML
shall not raise the defense that there is an adequate remedy at law.
IN WITNESS WHEREOF, Company and MML have executed this Financing and
Shareholder's Agreement on this fifth day of February, 1997.
MML: ZAXIS:
MML MANAGEMENT LTD. ZAXIS INTERNATIONAL INC.
By /s/ Alan Scott By: /s/ John V. Danis
-------------------- ----------------------
Alan Scott John V. Danis
Its: Director Its: President
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