THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID SECURITIES ACT.
Warrant to Purchase Shares
# _________ 500,000
SANGUINE CORPORATION (OTC:BB SGNC)
(Incorporated under the laws of the State of Nevada)
WARRANT CERTIFICATE FOR THE PURCHASE OF SHARES OF
THE $.001 PAR VALUE COMMON STOCK OF SANGUINE CORPORATION (OTC:BB SGNC)
EXERCISABLE ONLY AFTER March 1, 2002, AND VOID AFTER March 2, 2005.
Warrant Price: 50% of the bid price for the five trading days prior to the
date of exercise at the end of any monthly billing cycle or $.08 (Eight Cents)
per share, whichever is lower, payable in cash or services.
1. THIS IS TO CERTIFY that, for value received, Leonard W.
Burningham, Esq. or his registered assigns (either or both of whom are
referred to herein as the "Holder"), is entitled to purchase, subject to the
terms and conditions hereinafter set forth, at anytime from and after March 1,
2002 and on or before March 2, 2005 (the "Warrant Period"), up to
500,000shares of the $.001 par value common stock ("Common Stock") of Sanguine
Corporation (the "Company"), and to receive certificate(s) for the Common
Stock so exercised. This warrant may be exercised in whole or in part. Such
exercise shall be accomplished by tender to the Company of the purchase price
set forth above as the warrant price (the "Warrant Price"), either in
services, cash or by certified check or bank cashier's check, payable to the
order of the Company, together with presentation and surrender to the Company
of this Warrant with an executed subscription in substantially the form
attached hereto as Exhibit A. Fractional shares of the Company's Common Stock
will not be issued upon the exercise of this Warrant.
2. The Company agrees at all times to reserve and hold available out
of the aggregate of its authorized but unissued Common Stock the number of
shares of its Common Stock issuable upon the exercise of this and all other
Warrants of like tenor then outstanding. The Company further covenants and
agrees that all shares of Common Stock that may be delivered upon the exercise
of this Warrant will, upon delivery, be fully paid and nonassessable and free
from all taxes, liens and charges with respect to the purchase thereof
hereunder.
This Warrant and the Common Stock issuable upon the exercise hereof may
not be sold, transferred, pledged or hypothecated 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
"Securities Act") and any applicable state laws.
If this Warrant is transferred, in whole or in part, upon surrender of
this Warrant to the Company, the Company shall deliver to each transferee a
Warrant evidencing the rights of such transferee to purchase the number of
shares of Common Stock that such transferee is entitled to purchase pursuant
to such transfer.
The Company may place a legend on this Warrant or any replacement
Warrant and on each certificate representing shares issuable upon exercise of
this Warrant as to which the Company has not been supplied evidence that the
transfer of such security would not be in violation of the Securities Act and
any applicable state laws.
Only the registered Holder may enforce the provisions of this Warrant
against the Company. A transferee of the original registered Holder becomes a
registered Holder only upon notice to the Company substantially in the form
set forth in Exhibit B hereto.
3. This Warrant does not entitle the Holder to any voting rights or
other rights as a stockholder of the Company, nor to any other rights
whatsoever except the rights herein set forth, and no dividend shall be
payable or accrue by reason of this Warrant or the interest represented
hereby, or the shares purchasable hereunder, until or unless, and except to
the extent that, this Warrant is exercised.
This Warrant is exchangeable upon its surrender by the Holder to the
Company for new Warrants of like tenor and date representing in the aggregate
the right to purchase the number of shares purchasable hereunder, each of such
new Warrants to represent the right to purchase such number of shares as may
be designated by the Holder at the time of such surrender.
4. The Warrant Price and the number of shares purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4.
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock, (iii) combine its outstanding shares
of Common Stock into smaller number of shares of Common Stock, or (iv) issue
by reclassification of its shares of Common Stock other securities of the
Company, the number of shares of Common Stock purchasable upon exercise of
this Warrant immediately prior thereto shall be adjusted so that the Holder of
this Warrant shall be entitled to receive the kind and number of shares of
Common Stock or other securities of the Company that he would have owned or
have been entitled to receive after the happening of any of the events
described above, had such Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(b) Whenever the number of shares of Common Stock purchasable
upon the exercise of this Warrant is adjusted, as herein provided, the Warrant
Price shall be adjusted by multiplying such Warrant Price immediately prior to
such adjustment by a fraction, of which the numerator shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant
immediately prior to such adjustment, and of which the denominator shall be
the number of shares of Common Stock so purchasable immediately thereafter.
(c) For the purpose of this Section 4, the term shares of Common
Stock shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Warrant, or (ii) any other class of stock result-
ing from successive changes or reclassifications of such shares consisting
solely of change in par value, or from par value to no par value, or from no
par value to par value.
(d) If during the Warrant Period the Company consolidates with
or merges into another corporation or transfers all or substantially all of
its assets the Holder shall thereafter be entitled upon exercise hereof to
purchase, with respect to each share of Common Stock purchasable hereunder
immediately prior to the date upon which such consolidation or merger becomes
effective, the securities or property to which a holder of shares of Common
Stock is entitled upon such consolidation or merger, without any change in, or
payment in addition to the Warrant Price in effect immediately prior to such
merger or consolidation, and the Company shall take such steps in connection
with such consolidation or merger as may be necessary to ensure that all of
the provisions of this Warrant shall thereafter be applicable, as nearly as
reasonably may be, in relation to any securities or property thereafter
deliverable upon the exercise of this Warrant. The Company shall not effect
any such consolidation, merger or asset transfer unless prior to the
consummation thereof the successor corporation (if other than the Company)
resulting therefrom shall assume by written agreement executed and mailed to
the registered Holder at his address shown on the books and records of the
Company, the obligation to deliver to such Holder any such securities or
property as in accordance with the foregoing provisions such Holder shall be
entitled to purchase.
(e) Upon the happening of any event requiring an adjustment of
the Warrant Price, the Company shall forthwith give written notice thereof to
the registered Holder of this Warrant, stating the adjusted Warrant Price and
the adjusted number of shares of Common Stock or other securities or property
purchasable upon the exercise hereof resulting from such event and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. The Board of Directors of the Company shall
determine the adjusted Warrant Price and the securities or property
purchasable upon exercise. If any voluntary or involuntary dissolution,
liquidation, or winding up of the Company is proposed, the Company shall give
at least 20 days prior written notice of such proposal to the registered
Holder hereof stating the date on which such event is to take place and the
date (which shall be at least 20 days after giving of such notice) as of which
the holders of shares of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
dissolution, liquidation or winding up. This Warrant and all rights hereunder
shall terminate as of the date on which such dissolution, liquidation, or
winding up takes place. The notices pursuant to this paragraph shall be given
by first class mail, postage prepaid, addressed to the registered Holder of
this Warrant at his address appearing in the records of the Company.
(f) Irrespective of any adjustments pursuant to this Section 4
to the Warrant Price or to the number of shares or other securities or other
property obtainable upon exercise of this Warrant, this Warrant may continue
to state the Warrant Price and the number of shares obtainable upon exercise,
as the same price and number of shares stated herein.
5. (a) Whether or not this Warrant has yet been exercised in whole or in
part, the Company shall, at its own expense, register and include all shares
of Common Stock issued or issuable upon exercise of the Warrants in the
registration, which is contemplated to be filed by the Company between March
2002 and April 2002.
(b) Notwithstanding the foregoing, should for any reason all
shares of Common Stock issued or issuable upon the exercise of the Warrants
not be registered pursuant to the provisions of subsection 5(a) above, then in
the event that the Company proposes, at any time subsequent to March 1, 2002,
but prior to March 2, 2005, whether or not this Warrant has yet been exercised
in whole or in part, to file any other registration statement on a general
form of registration under the Securities Act relating to securities issued or
to be issued by it, then it shall give written notice of such proposal to the
record owners of the Warrants and any shares of Common Stock issued upon the
exercise thereof. If, within 15 days after the giving of such notice, the
record owners of any of the Warrants or shares of Common Stock issued or
issuable upon their exercise shall request in writing that all or any of the
shares of Common Stock issued or issuable upon exercise of the Warrants be
included in such proposed registration, the Company will, at its own expense
(except as set forth below), also register such shares of Common Stock as
shall have been so requested in writing; provided, however, that
(i) the Company shall not be required to include any of
such shares of Common Stock if, by reason of such inclusion, the Company
shall be required to prepare and file a registration statement on a form
promulgated by the Securities and Exchange Commission different from
that which the Company otherwise would use;
(ii) Holder shall cooperate with the Company in the
preparation of such registration statement to the extent required to
furnish information concerning such owners therein; and
(iii) if any underwriter or managing agent is pur-
chasing or arranging for the sale of the securities then being offered
by the Company under such registration statement, then Holder shall
agree to have the securities being so registered sold to or by such
underwriter or managing agent on terms substantially equivalent to the
terms upon which the Company is selling the securities so registered.
(c) In connection with the filing of a registration statement
pursuant to subsections 5(a) and 5(b), the Company shall:
(i) notify Holder as to the filing thereof and of all
amendments thereto filed prior to the effective date of said
registration statement;
(ii) notify Holder, promptly after it shall have
received notice thereof, of the time when the registration statement
becomes effective or any supplement to any prospectus forming a part of
the registration statement has been filed;
(iii) prepare and file without expense to Holder any
necessary amendment or supplement to such registration statement or
prospectus as may be necessary to comply with Section 10(a)(3) of the
Securities Act or advisable in connection with the proposed distribution
of the securities by Holder;
(iv) take all reasonable steps to qualify the shares
of Common Stock being so registered for sale under the securities or
blue sky laws in such states, but only in such states, as the Company
would qualify the sales of its securities absent any registration of the
shares of Common Stock issued or issuable hereunder; and,
(v) notify Holder of any stop order suspending the
effectiveness of the registration statement and use its reasonable best
efforts to remove such stop order.
6. In connection with the obligation of the Company to register
shares of Common Stock pursuant to the provisions of Section 5 hereof, the
Company and each Holder agree as follows:
(a) The Company hereby agrees to indemnify and hold harmless
each Holder and each person who controls each Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages, liabilities or actions to which each Holder or they or any of
them may become subject under the Securities Act, the Exchange Act or
otherwise and to reimburse the persons indemnified above for any legal or
other expenses (including the cost of any investigation and preparation)
reasonably incurred by them in connection with any litigation or proceeding or
threatened litigation or proceeding, whether or not resulting in any
liabilities, but only insofar as such losses, claims, damages, liabilities or
actions arise out of, or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement
with respect to the shares of Common Stock (or incorporated therein by
reference) or any amendment or supplement thereto (such registration
statement, together with any such amendments or supplements, is referred to
herein as the "Registration Statement"), or the omission or alleged omission
to state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) the
employment of the Company of any device, scheme or artifice to defraud, or the
engaging by the Company in any act, practice or course of business which
operates or would operate as a fraud or deceit, or any conspiracy with respect
thereto, in which the Company shall participate, in connection with the sale
pursuant to the Registration Statement of any of the securities registered
thereby; provided, however, that the indemnity agreement contained in this
paragraph (a) shall not extend to any indemnified person in respect of any
such losses, claims, damages, liabilities or actions arising out of, or based
upon, any such untrue statement or alleged untrue statement or any such
omission or alleged omission, if such statement or omission was made in
reliance upon information furnished in writing to the Company by such person
specifically for use in connection with the preparation of the Registration
Statement. The Company agrees to pay any legal and other expenses for which
it is liable under this paragraph (a) from time to time (but not more
frequently than monthly) within 30 days after its receipt of a bill therefor.
(b) Each Holder agrees to indemnify and hold harmless the
Company, its directors, its officers who shall have signed the registration
statement, each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each Holder but in each
case to the extent, and only to the extent, that any statement in or omission
from or alleged omission from the registration statement, any preliminary
prospectus, the prospectus or any amendment or supplement thereto was made in
reliance upon information furnished in writing to the Company by such Holder
specifically for use in connection with the preparation of the registration
statement, any preliminary prospectus or the prospectus or any such amendment
or supplement thereto. Each Holder agrees to pay any legal and other expenses
for which it is liable under this paragraph (b) within 30 days after its
receipt of a bill therefor.
(c) If any action is brought against a person entitled to
indemnification pursuant to the foregoing paragraphs (a) or (b) (an
"Indemnified Party") in respect of which indemnity may be sought against a
person granting indemnification (an "Indemnifying Party") pursuant to such
subsections, such Indemnified Party shall promptly notify such Indemnifying
Party in writing of the commencement thereof; but the omission so to notify
the Indemnifying Party of any such action shall not release the Indemnifying
Party from any liability it may have to such Indemnified Party otherwise than
on account of the indemnity agreement contained in paragraphs (a) or (b). In
case any such action is brought against an Indemnified Party and it notifies
an Indemnifying Party of the commencement thereof, the Indemnifying Party
against which a claim is to be made will be entitled to participate therein,
and, to the extent that it may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party, provided, however,
that if the defendants in any such action include both the Indemnified Party
and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded based upon advice of counsel that there may be legal defenses
available to it and/or other Indemnified Parties which conflict with those
available to the Indemnifying Party, the Indemnified Party shall have the
right to select separate counsel to assume such legal defenses and otherwise
to participate in the defense of such action on behalf of such Indemnified
Party or Parties. Upon receipt of notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense of such action and
approval by the Indemnified Party of counsel, the Indemnifying Party will not
be liable to such Indemnified Party under this agreement for any legal or
other expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof unless (i) the Indemnified Party shall have employed
such counsel in connection with the assumption of legal defenses in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the Indemnifying Party shall not be liable for the expenses of more than
one separate counsel), (ii) the Indemnifying Party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after notice of commencement of the
action or (iii) the Indemnifying Party has authorized the employment of such
counsel for the Indemnified Party at the expense of the Indemnifying Party.
An Indemnifying Party shall not be liable for any settlement of any action or
proceeding effected without its written consent.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in paragraph (a)
is unavailable to a Holder in accordance with its terms, the Company and each
Holder shall contribute to the aggregate losses, claims, damages and liabil-
ities of the nature contemplated by said indemnity agreement incurred by each
Holder based on the relative fault of the Company on the one hand, and each
Holder on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages and liabilities. The relative fault
shall be determined by reference to, among other things, whether in the case
of an untrue statement or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact, such statement or omis-
sion relates to information supplied by the Company or such Holder and the
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid or
payable by the Indemnified Party as a result of the losses, claims, damages,
or liabilities referred to above in this paragraph shall be deemed to include
any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending against or appearing as a third
party witness in any such action or claim. Notwithstanding the provisions of
this paragraph, if a Holder is found to be guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act,
it shall not be entitled to contribution from the Company unless the Company
is also found to be guilty of such fraudulent misrepresentation.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its duly authorized officer.
DATED: 3/15/02 SANGUINE CORPORATION (SGNC)
By:/s/Thomas C. Drees
Thomas C. Drees, Ph.D.,
Chairman & CEO
EXHIBIT "A"
SUBSCRIPTION FORM
(To be Executed by the Registered Holder to Exercise the Rights To Purchase
Common Stock Evidenced by the Warrant)
The undersigned hereby irrevocably subscribes for ________ shares
(the "Stock") of the Common Stock of SANGUINE CORPORATION (the "Company")
pursuant to and in accordance with the terms and conditions of the attached
Warrant and hereby makes payment of $___________ (in cash or services per
the attached invoice) therefor, and requests that a certificate for such
shares be issued in the name of the undersigned and be delivered to the
undersigned at the address stated below. If such number of shares is not
all of the shares purchasable pursuant to the attached Warrant, the under-
signed requests that a new Warrant of like tenor for the balance of the
remaining shares purchasable thereunder be delivered to the undersigned at
the address stated below.
In connection with the issuance of the Stock, I hereby represent to
the Company that I am acquiring the Stock for my own account for investment
and not with a view to, or for resale in connection with, a distribution of
the shares within the meaning of the Securities Act of 1933, as amended
(the "Securities Act").
I agree that, until such shares have been registered, each share
certificate representing the Common Stock delivered to me shall bear
substantially the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The shares
may not be sold or transferred in the absence of such registration or
an exemption therefrom under said Securities Act."
I further agree that unless the shares are registered, the Company
may place stop orders on the certificates evidencing the Stock with the
transfer agent, if any, to the same effect as the above legend. The legend
and stop transfer notice referred to above shall be removed only upon my
furnishing to the Company an opinion of counsel (reasonably satisfactory to
the Company) to the effect that such legend may be removed or if such
shares have been registered.
Date:__________________ Signed:____________________________
Address:___________________________
___________________________
___________________________
SIGNATURE(S) MUST BE GUARANTEED BY A MEMBER FIRM OF A REGISTERED NATIONAL
SECURITIES EXCHANGE, OR BY A BANK (OTHER THAN A SAVINGS BANK) OR TRUST
COMPANY, AND THE SIGNATURE TO THIS SUBSCRIPTION FORM MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE WARRANT IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER.
EXHIBIT "B"
ASSIGNMENT
(To be Executed by the Registered Holder to Effect Transfer of the Warrant)
For Value Received _______________ hereby sells, assigns and transfers to
____________________ this Warrant and the rights represented hereby to
purchase Common Stock in accordance with the terms and conditions hereof,
and does hereby irrevocably constitute and appoint
_____________________________________ as attorney to transfer this warrant
on the books of the Company with full power of substitution.
Dated:__________________ Signed:____________________________
Please print or typewrite Please insert Social Security
name and address of or other Tax Identification
assignee: Number of Assignee:
_________________________ ______-________-______________
_________________________
_________________________
_________________________