EXHIBIT 10.3
AMENDMENT TO STOCK PURCHASE AGREEMENT
WHEREAS, on or about January 14, 2004, ENVIRONMENTAL TECHNOLOGIES, INC., a
Nevada corporation (the "Company") and BARRON PARTNERS LP (the "Investor")
executed that certain Stock Purchase Agreement (the "Stock Purchase Agreement")
with respect to an investment in the Company as hereinafter described; and
WHEREAS, the Stock Purchase Agreement is incorporated herein for all
purposes, and all capitalized terms herein shall have the same meaning as
defined in the Stock Purchase Agreement; and
WHEREAS, pursuant to the Stock Purchase Agreement, the Company is offering
2,000,000 shares of its common stock, $0.001 par value per share (the "Common
Stock") for a purchase price of $1.00 per share, 1,500,000 cashless non-callable
A Warrant for the purchase of the Common Stock exercisable at $1.00 per share,
1,650,000 cashless and callable B Warrant for the purchase of the Common Stock
exercisable at $1.00 per share, 2,000,000 cashless and callable C Warrant for
the purchase of the Common Stock exercisable at $2.00 per share, 1,000,000
cashless and callable D Warrant for the purchase of the Common Stock exercisable
at $4.00 per share, and 1,000,000 cashless and callable E Warrant for the
purchase of the Common Stock exercisable at $6.00 per share (such shares of the
Common Stock and warrants hereinafter collectively referred to as the "Units");
and
WHEREAS, the warrants contained in the Units are hereinafter individually
referred to as a "Warrant" and collectively as the "Warrants" and all of the
Warrants are in the form described in Attachment A hereto; and
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WHEREAS, the Investor wishes to purchase for the sum of $2,000,000 (the
"Purchase Price"), upon the terms and subject to the conditions of the Stock
Purchase Agreement, all of the Units; and
WHEREAS, the parties desire to amend the Stock Purchase Agreement as
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Amendment to the Stock Purchase Agreement. The Stock Purchase
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Agreement is hereby amended to read as follows:
(a) All references to the Company in the Stock Purchase Agreement
shall mean Cyber Public Relations, Inc., a Florida corporation.
(b) Notwithstanding anything contained to the contrary in the
Stock Purchase Agreement, the Purchase Price to be paid by the Investor on the
Closing Date has been paid on the date hereof into escrow by delivery of a check
payable to the order of "Harbour, Smith, Harris Texas IOLTA Account" as Escrow
Agent for Cyber Public Relations, Inc. (the "Escrow Agent"). Upon the
satisfaction of all of the terms hereof, the Escrow Agent at the Closing shall
deliver the Purchase Price to the Company. Until the satisfaction of all of the
terms of the Stock Purchase Agreement and this Agreement, the Escrow Agent shall
hold the Purchase Price in escrow subject to the Stock Purchase Agreement.
(c) The authorized capital stock of the Company consists of
100,000,000 shares of the Common Stock, par value $0.001 per share, and
10,000,000 shares of preferred stock, par value $0.001 per share.
(d) As of the Closing Date, 9,865,000 shares of the Common Stock
will be issued and outstanding, while no shares of the Company's preferred stock
will be issued and outstanding. The Common Stock will be owned as of the
Closing Date hereof as follows:
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NAME OF BENEFICIAL OWNER (1) NUMBER
---------------------------- ------
Steven D. Rosenthal, Ph.D.. . . . . 1,000,000
Robert K. Christie. . . . . . . . . 3,750,000
Barbara Tainter . . . . . . . . . . 250,000
Bret Covey. . . . . . . . . . . . . 650,000
Burr Northrop . . . . . . . . . . . 500,000
Douglas L. Parker . . . . . . . . . 1,250,000
Grover G. Moss. . . . . . . . . . . 910,000
James R. Christ . . . . . . . . . . 200,000
Donald G. St. Clair . . . . . . . . 40,000
San Diego Torrey Hills Capital. . . 375,000
Clayton Chase . . . . . . . . . . . 375,000
Norman T. Reynolds. . . . . . . . . 250,000
Public stockholders of the Company. 315,000
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Total . . . . . . . . . . . . . . . 9,865,000
=========
(e) Notwithstanding anything contained to the contrary in the
Stock Purchase Agreement, the Company as of the date of this Amendment and
before the Closing is a publicly held company. It will make available to the
Investor true and complete copies of any requested SEC Documents. Further, the
shares of the Common Stock are registered for trading pursuant to Section 12 of
the 1934 Act, and listed and traded on the OTC Bulletin Board maintained by The
Nasdaq Stock Market, Inc. As of the date hereof, the Company has received no
notice, either oral or written, with respect to the eligibility of the Common
Stock for such listing on the OTC Bulletin Board. Any reference to a future
acquisition of a publicly trading corporate shell has no further application.
The Company will use its best efforts to comply in all respects with its
reporting and filing obligations under the 1934 Act, and will not take any
action or file any document (whether or not permitted by the 1934 Act or the
rules thereunder) to terminate or suspend such registration or to terminate or
suspend its reporting and filing obligations under the 1934 until the Investor
has disposed of all of its Shares or the shares of Common Stock underlying the
Warrants.
(f) Paragraph 9.1 of the Stock Purchase Agreement is amended to
read as follows:
"9.1 Further Covenants of the Company. As of the Closing, the Company
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does not have any liabilities in excess of $100,000. Following the
Closing, the Company shall assume all of the obligations of the
Company described hereunder, including, but not limited to the
issuance of the Warrants, and the obligations under the Registration
Rights Agreement. For example, if 315,000 shares of the Common Stock
are issued and outstanding in favor of the public stockholders of the
Company, then the Investor's ownership on a primary shares of the
Common Stock outstanding basis would be 2,000,000 shares (2,000,000 +
9,865,000) = 16.86 percent ownership of the entire resulting ownership
of the Company. Moreover, on a fully diluted basis, the Investor would
own (2,000,000 shares of the Common Stock + Warrants to purchase
7,150,000 additional shares) (9,865,000 shares + 2,000,000 shares +
Warrants to purchase 7,150,000 shares) = 48.12 percent of the entire
resulting ownership of the Company. The fully diluted calculation is
an approximation because the calculation does not include the exercise
of other warrants or options of the Company may be then outstanding."
2. Ratification and Republication. Except as amended by this
--------------------------------
Agreement, the Company and the Investor do hereby ratify and republish the Stock
Purchase Agreement.
3. Incorporation by Reference. The attachments to this Agreement
----------------------------
referred to or included herein constitute integral parts to this Agreement and
are incorporated into this Agreement by this reference.
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4. Benefit. All the terms and provisions of this Agreement shall be
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binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
5. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
6. Multiple Counterparts. This Agreement may be executed in one or
----------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7. Entire Agreement. This Agreement and the Stock Purchase Agreement
-----------------
contain the entire understanding of the parties with respect to the subject
matter hereof, and may not be changed orally, but only by an instrument in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
IN WITNESS WHEREOF, this Agreement has been executed in multiple
counterparts on January 21, 2004.
CYBER PUBLIC RELATIONS, INC.
By
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Steven D. Rosenthal, Chief Executive Officer
BARRON PARTNERS LP
By
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Andrew Barron Worden, President, Barron Capital
Advisors LLC, General Partner
Attachments:
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Attachment A - Form of Warrants
Attachment B - Registration Rights Agreement
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THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A STOCK PURCHASE AGREEMENT (THE "STOCK PURCHASE AGREEMENT"), DATED
THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE
PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE
RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE
COMPANY.
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CYBER PUBLIC RELATIONS, INC.
A WARRANT FOR THE PURCHASE OF COMMON STOCK
1,500,000 Shares Rancho Cucamonga, California
THIS IS TO CERTIFY that pursuant to that certain Stock Purchase Agreement
of even date herewith executed by the parties hereto (the "Stock Purchase
Agreement"), for value received, BARRON PARTNERS LP (the "Holder") is entitled
at any time from the date hereof, but prior to 5:00 p.m., Rancho Cucamonga,
California time on January ___, 2009, or 18 months after the effectiveness of a
Registration Statement (hereinafter defined) subsequent to the issuance hereof,
whichever is longer, subject to and upon the terms and conditions contained
herein, to purchase up to 1,500,000 fully paid and non-assessable shares of the
common stock, par value $0.001 per share (the "Common Stock") of CYBER PUBLIC
RELATIONS, INC., a Florida corporation (the "Company"), at a purchase price of
$1.00 per share of the Common Stock (the "Exercise Price") such number of the
shares and the Exercise Price being subject to adjustment as provided herein.
This A Warrant shall be void and of no effect and all rights hereunder
shall cease at 5:00 p.m., Rancho Cucamonga, California time on January ___,
2009, or 18 months after the effectiveness of a Registration Statement
subsequent to the issuance hereof, whichever is longer, except to the extent
theretofore exercised; provided that in the case of the earlier dissolution of
the Company, this A Warrant shall become void on the date fixed for such
dissolution. As used herein, "Registration Statement" means a registration
statement filed by the Company on Form S-1, SB-2, or S-3, or some other similar
form pursuant to the Securities Act of 1933, as amended (the "1933 Act") to
register the resale of the shares of the Common Stock upon the exercise of this
A Warrant.
1. Registration of this A Warrant. The Company shall register this A
--------------------------------
Warrant upon records to be maintained by the Company for that purpose (the "A
Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this A Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
2. Investment Representation. The Holder by accepting this A Warrant
--------------------------
represents that the Holder is acquiring this A Warrant for its own account or
the account of an affiliate for investment purposes and not with the view to any
offering or distribution and that the Holder will not sell or otherwise dispose
of this A Warrant or the underlying Common Stock in violation of applicable
securities laws. The Holder acknowledges that the certificates representing any
shares of the Common Stock will bear a legend indicating that they have not been
registered under the 1933 Act and may not be sold by the Holder except pursuant
to an effective Registration Statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws.
3. Validity of A Warrant and Issuance of the Common Stock. The Company
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represents and warrants that this A Warrant has been duly authorized and validly
issued and warrants and agrees that the Common Stock that may be issued upon the
exercise of the rights represented by this A Warrant will, when issued upon such
exercise,
1
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof. The Company
further warrants and agrees that during the period within which the rights
represented by this A Warrant may be exercised, the Company will at all times
have authorized and reserved a sufficient number of shares of the Common Stock
to provide for the exercise of the rights represented by this A Warrant.
4. Registration of Transfers and Exchange of this A Warrant.
--------------------------------------------------------------
(a) Subject to compliance with the legend set forth on the face of
this A Warrant, the Company shall register the transfer of any portion of this A
Warrant in the A Warrant Register, upon surrender of this A Warrant with the
Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to Paragraph 9 hereof. Upon any such
registration or transfer, a new warrant to purchase the Common Stock, in
substantially the form of this A Warrant (any such new warrant, a "New A
Warrant"), evidencing the portion of this A Warrant so transferred shall be
issued to the transferee and a New A Warrant evidencing the remaining portion of
this A Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New A Warrant by the transferee thereof shall be
deemed the acceptance of such transferee of all of the rights and obligations of
the Holder.
(b) This A Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Paragraph 9
for one or more New A Warrants, evidencing in the aggregate the right to
purchase the number of shares of the Common Stock which may then be purchased
hereunder. Any such New A Warrant will be dated the date of such exchange.
5. Exercise of this A Warrant.
----------------------------
(a) Upon surrender of this A Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Paragraph 9 hereof, and upon payment and delivery of the
Exercise Price multiplied by the number of shares of the Common Stock that the
Holder intends to purchase hereunder, in lawful money of the United States of
America, in cash or by certified or official bank check or checks, to the
Company, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly but in no event later than five business days after the
Date of Exercise (as defined herein) issue or cause to be issued and delivered
to or upon the written order of the Holder and in such name or names as the
Holder may designate (subject to the restrictions on transfer described in the
legend set forth on the face of this A Warrant), a certificate for the shares of
the Common Stock issuable upon such exercise, with such restrictive legend as
required by the 1933 Act. Any person so designated by the Holder to receive the
shares of the Common Stock shall be deemed to have become holder of record of
the Common Stock as of the Date of Exercise of this A Warrant.
(b) "Date of Exercise" means the date on which the Company shall
have received (i) this A Warrant (or any New A Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New A Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of shares of the Common Stock so indicated by the Holder to be
purchased.
(c) This A Warrant shall be exercisable at any time and from time
to time for such number of shares of the Common Stock as is indicated in the
attached Form of Election to Purchase. If less than all of the shares of the
Common Stock which may be purchased under this A Warrant are purchased at any
time, the Company shall issue or cause to be issued, at its expense, a New A
Warrant evidencing the right to purchase the remaining number of shares of the
Common Stock for which no exercise has been evidenced by this A Warrant.
(d) Notwithstanding anything contained herein to the contrary, the
holder of this A Warrant may, at its election exercised in its sole discretion,
exercise this A Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Exercise Price, elect instead to receive upon such exercise the
"Net Number" of shares of the Common Stock determined according to the following
formula (a "Cashless Exercise"):
2
Net Number = (A x B) - (A x C)
-----------------
B
For purposes of the foregoing formula:
A = the total number shares with respect to which this A
Warrant is then being exercised.
B = the last reported sale price (as reported by Bloomberg) of
the Common Stock on the date immediately preceding the date
of the notice of exercise of this A Warrant.
C = the Exercise Price then in effect at the time of such
exercise.
Provided, however, notwithstanding anything herein contained to the
contrary, the Holder may not affect a Cashless Exercise of this A Warrant until
after July ___, 2004, and thereafter so long as there is an effective
Registration Statement with respect to the shares of the Common Stock.
6. Adjustment of Exercise Price and Number of Shares. The shares of
----------------------------------------------------
the Common Stock or other securities at the time issuable upon exercise of this
A Warrant and the Exercise Price therefore, are subject to adjustment upon the
occurrence of the following events:
(a) Adjustment of the Exercise Price due to EBIT. The Exercise
-----------------------------------------------
Price will be adjusted on a sliding scale if the earnings before interest and
taxes ("EBIT") of the Company, not including any non recurring gains or losses,
is less than $3,000,000 for the fiscal year of the Company ending September 30,
2004 (the "Adjustment Date") as hereinafter described. If the EBIT of the
Company is $2,000,000 or less as of the Adjustment Date, then the Exercise Price
will be $0.25 per share of the Common Stock. If the EBIT of the Company is less
than $3,000,000 but more than $2,000,000 as of the Adjustment Date, then the
Exercise Price will equal $1.00 - [$.75 x ($3,000,000-E)/$1,000,000], where E is
the actual EBIT as of Adjustment Date. For example, if EBIT is $2,500,000, the
Exercise Price will be $1.00 - [$.75 x ($3,000,000-$2,500,000)/$1,000,000], or
$0.63. In no event will the Exercise Price be less than $0.25 per share of the
Common Stock.
(b) Adjustment for Stock Splits, Stock Dividends,
--------------------------------------------------
Recapitalizations, Etc. The Exercise Price of this A Warrant and the number of
- -----------------------
shares of the Common Stock or other securities at the time issuable upon the
exercise of this A Warrant shall be appropriately adjusted to reflect any stock
dividend, stock split, combination of shares, reclassification, recapitalization
or other similar event affecting the number of outstanding shares of the Common
Stock or other securities of the Company.
(c) Adjustment for Reorganization, Consolidation, Merger, Etc. In
---------------------------------------------------------
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being referred to
as a "Reorganization"), then, in each case, the Holder, on exercise hereof at
any time after the consummation or effective date of such Reorganization (the
"Effective Date"), shall receive, in lieu of the shares of the Common Stock or
other securities of the Company at any time issuable upon the exercise of this A
Warrant prior to the Effective Date, the shares of the Common Stock and other
securities of the Company and property (including cash) to which the Holder
would have been entitled upon the Effective Date if the Holder had exercised
this A Warrant immediately prior thereto (all subject to further adjustment as
provided in this A Warrant).
(d) Certificate as to Adjustments. In case of any adjustment or
-------------------------------
readjustment in the price or kind of securities issuable on the exercise of this
A Warrant, the Company will promptly give written notice thereof to the Holder
in the form of a certificate, certified and confirmed by the Board of Directors
of the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
3
7. Fractional Shares. The Company shall not be required to issue or
------------------
cause to be issued fractional shares of the Common Stock on the exercise of this
A Warrant. The number of full shares of the Common Stock that shall be issuable
upon the exercise of this A Warrant shall be computed on the basis of the
aggregate number of shares of the Common Stock purchasable on exercise of this A
Warrant so presented. If any fraction of shares of the Common Stock would,
except for the provisions of this Paragraph 8, be issuable on the exercise of
this A Warrant, the Company shall, at its option, (a) pay an amount in cash
equal to the Exercise Price multiplied by such fraction or (b) round the number
of shares of the Common Stock issuable, up to the next whole number.
8. Notice. All notices and other communications hereunder shall be in
------
writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Mr. Steven D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga,
California 91730, with a copy to Norman T. Reynolds, Esq. at 815 Walker Street,
Suite 1250, Houston, Texas 77002, and if to the Holder addressed to Mr. Andrew
Barron Worden 730 Fifth Avenue, 9th Floor, New York, New York 10019. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
9. Miscellaneous.
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(a) This A Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This
A Warrant may be amended only in writing and signed by the Company and the
Holder.
(b) Nothing in this A Warrant shall be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this A Warrant. This A Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
(c) This A Warrant shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflicts of laws provisions thereof. Each party hereby irrevocably submits to
the personal jurisdiction of the United States District Court for the Central
District of California, as well as of the Superior Courts of the State of
California in Riverside County, California over any suit, action or proceeding
arising out of or relating to this Agreement. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such mediation, arbitration,
suit, action or proceeding brought in any such county and any claim that any
such mediation, arbitration, suit, action or proceeding brought in such county
has been brought in an inconvenient forum.
(d) The headings herein are for convenience only, do not
constitute a part of this A Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(e) In case any one or more of the provisions of this A Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this A Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this A Warrant.
(f) The Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this A Warrant.
(g) In the event of any conflict between the terms of this A
Warrant or the Stock Purchase Agreement, the terms of the Stock Purchase
Agreement shall control.
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IN WITNESS WHEREOF, the Company has caused this A Warrant to be duly
executed by the authorized officer as of the date first above stated.
CYBER PUBLIC RELATIONS, INC.
By
--------------------------------------------
Steven D. Rosenthal, Chief Executive Officer
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FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing A Warrant)
To: Cyber Public Relations, Inc.
In accordance with the A Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase ______________
shares of the Common Stock (the "Common Stock"), $0.001 par value, of Cyber
Public Relations, Inc. and encloses this A Warrant and $_______ for each share
of the Common Stock being purchased or an aggregate of $________________ in cash
or certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the A Warrant) together with any
applicable taxes payable by the undersigned pursuant to the A Warrant.
The undersigned requests that certificates for the shares of the Common
Stock issuable upon this exercise be issued in the name of:
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Please print name and address)
_____________________________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of the Common Stock issuable upon this exercise
shall not be all of the shares of the Common Stock which the undersigned is
entitled to purchase in accordance with the enclosed A Warrant, the undersigned
requests that a New A Warrant (as defined in the A Warrant) evidencing the right
to purchase the shares of the Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Please print name and address)
Dated: ________________________ Name of Holder:
(Print)_______________________________
By____________________________________
Name__________________________________
Title_________________________________
Signature must conform in all respects
to name of Holder as specified on the
face of the A Warrant
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A STOCK PURCHASE AGREEMENT (THE "STOCK PURCHASE AGREEMENT"), DATED
THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE
PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE
RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE
COMPANY.
---------------------------------------
CYBER PUBLIC RELATIONS, INC.
B WARRANT FOR THE PURCHASE OF COMMON STOCK
1,650,000 Shares Rancho Cucamonga, California
THIS IS TO CERTIFY that pursuant to that certain Stock Purchase Agreement
of even date herewith executed by the parties hereto (the "Stock Purchase
Agreement"), for value received, BARRON PARTNERS LP (the "Holder") is entitled
at any time from the date hereof, but prior to 5:00 p.m., Rancho Cucamonga,
California time on January ___, 2009, or 18 months after the effectiveness of a
Registration Statement (hereinafter defined) subsequent to the issuance hereof,
whichever is longer, subject to and upon the terms and conditions contained
herein, to purchase up to 1,650,000 fully paid and non-assessable shares of the
common stock, par value $0.001 per share (the "Common Stock") of CYBER PUBLIC
RELATIONS, INC., a Florida corporation (the "Company"), at a purchase price of
$1.00 per share of the Common Stock (the "Exercise Price") such number of the
shares and the Exercise Price being subject to adjustment as provided herein.
This B Warrant shall be void and of no effect and all rights hereunder
shall cease at 5:00 p.m., Rancho Cucamonga, California time on January ___,
2009, or 18 months after the effectiveness of a Registration Statement
subsequent to the issuance hereof, whichever is longer, except to the extent
theretofore exercised; provided that in the case of the earlier dissolution of
the Company, this B Warrant shall become void on the date fixed for such
dissolution. As used herein, "Registration Statement" means a registration
statement filed by the Company on Form S-1, SB-2, or S-3, or some other similar
form pursuant to the Securities Act of 1933, as amended (the "1933 Act") to
register the resale of the shares of the Common Stock upon the exercise of this
B Warrant.
1. Registration of this B Warrant. The Company shall register this B
--------------------------------
Warrant upon records to be maintained by the Company for that purpose (the "B
Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this B Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
2. Investment Representation. The Holder by accepting this B Warrant
--------------------------
represents that the Holder is acquiring this B Warrant for its own account or
the account of an affiliate for investment purposes and not with the view to any
offering or distribution and that the Holder will not sell or otherwise dispose
of this B Warrant or the underlying Common Stock in violation of applicable
securities laws. The Holder acknowledges that the certificates representing any
shares of the Common Stock will bear a legend indicating that they have not been
registered under the 1933 Act and may not be sold by the Holder except pursuant
to an effective Registration Statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws.
3. Validity of B Warrant and Issuance of the Common Stock. The Company
------------------------------------------------------
represents and warrants that this B Warrant has been duly authorized and validly
issued and warrants and agrees that the Common Stock that may be issued upon the
exercise of the rights represented by this B Warrant will, when issued upon such
exercise, be
1
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof. The Company further
warrants and agrees that during the period within which the rights represented
by this B Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of the Common Stock to
provide for the exercise of the rights represented by this B Warrant.
4. Registration of Transfers and Exchange of this B Warrant.
--------------------------------------------------------------
(a) Subject to compliance with the legend set forth on the face of
this B Warrant, the Company shall register the transfer of any portion of this B
Warrant in the B Warrant Register, upon surrender of this B Warrant with the
Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to Paragraph 9 hereof. Upon any such
registration or transfer, a new warrant to purchase the Common Stock, in
substantially the form of this B Warrant (any such new warrant, a "New B
Warrant"), evidencing the portion of this B Warrant so transferred shall be
issued to the transferee and a New B Warrant evidencing the remaining portion of
this B Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New B Warrant by the transferee thereof shall be
deemed the acceptance of such transferee of all of the rights and obligations of
the Holder.
(b) This B Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Paragraph 9
for one or more New B Warrants, evidencing in the aggregate the right to
purchase the number of shares of the Common Stock which may then be purchased
hereunder. Any such New B Warrant will be dated the date of such exchange.
5. Exercise of this B Warrant.
----------------------------
(a) Upon surrender of this B Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Paragraph 9 hereof, and upon payment and delivery of the
Exercise Price multiplied by the number of shares of the Common Stock that the
Holder intends to purchase hereunder, in lawful money of the United States of
America, in cash or by certified or official bank check or checks, to the
Company, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly but in no event later than five business days after the
Date of Exercise (as defined herein) issue or cause to be issued and delivered
to or upon the written order of the Holder and in such name or names as the
Holder may designate (subject to the restrictions on transfer described in the
legend set forth on the face of this B Warrant), a certificate for the shares of
the Common Stock issuable upon such exercise, with such restrictive legend as
required by the 1933 Act. Any person so designated by the Holder to receive the
shares of the Common Stock shall be deemed to have become holder of record of
the Common Stock as of the Date of Exercise of this B Warrant.
(b) "Date of Exercise" means the date on which the Company shall
have received (i) this B Warrant (or any New B Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New B Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of shares of the Common Stock so indicated by the Holder to be
purchased.
(c) This B Warrant shall be exercisable at any time and from time
to time for such number of shares of the Common Stock as is indicated in the
attached Form of Election to Purchase. If less than all of the shares of the
Common Stock which may be purchased under this B Warrant are purchased at any
time, the Company shall issue or cause to be issued, at its expense, a New B
Warrant evidencing the right to purchase the remaining number of shares of the
Common Stock for which no exercise has been evidenced by this B Warrant.
(d) Notwithstanding anything contained herein to the contrary, the
holder of this B Warrant may, at its election exercised in its sole discretion,
exercise this B Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Exercise Price, elect instead to receive upon such exercise the
"Net Number" of shares of the Common Stock determined according to the following
formula (a "Cashless Exercise"):
2
Net Number = (A x B) - (A x C)
-----------------
B
For purposes of the foregoing formula:
A = the total number shares with respect to which this B
Warrant is then being exercised.
B = the last reported sale price (as reported by
Bloomberg) of the Common Stock on the date immediately
preceding the date of the notice of exercise of this B
Warrant.
C = the Exercise Price then in effect at the time of such
exercise.
Provided, however, notwithstanding anything herein contained to the
contrary, the Holder may not affect a Cashless Exercise of this B Warrant until
after July ___, 2004, and thereafter so long as there is an effective
Registration Statement with respect to the shares of the Common Stock.
6. Call by the Company. In the event that the closing price of the
------------------
Common Stock as listed on a nationally public securities market is $1.75 or more
for a period of 20 consecutive trading days and the Registration Statement for
the Common Stock is effective for such 20 consecutive trading days, the Company
may call this B Warrant upon 30 days notice and pay to the Holder the sum of
$0.001 per share of the Common Stock covered by this B Warrant, for all such
shares not purchased under the exercise provisions at the expiration of the 30
days notice period.
7. Adjustment of Exercise Price and Number of Shares. The shares of
----------------------------------------------------
the Common Stock or other securities at the time issuable upon exercise of this
B Warrant and the Exercise Price therefore, are subject to adjustment upon the
occurrence of the following events:
(a) Adjustment of the Exercise Price due to EBIT. The Exercise
-----------------------------------------------
Price will be adjusted on a sliding scale if the earnings before interest and
taxes ("EBIT") of the Company, not including any non recurring gains or losses,
is less than $3,000,000 for the fiscal year of the Company ending September 30,
2004 (the "Adjustment Date") as hereinafter described. If the EBIT of the
Company is $2,000,000 or less as of the Adjustment Date, then the Exercise Price
will be $0.25 per share of the Common Stock. If the EBIT of the Company is less
than $3,000,000 but more than $2,000,000 as of the Adjustment Date, then the
Exercise Price will equal $1.00 - [$.75 x ($3,000,000-E)/$1,000,000], where E is
the actual EBIT as of Adjustment Date. For example, if EBIT is $2,500,000, the
Exercise Price will be $1.00 - [$.75 x ($3,000,000-$2,500,000)/$1,000,000], or
$0.63. In no event will the Exercise Price be less than $0.25 per share of the
Common Stock.
(b) Adjustment for Stock Splits, Stock Dividends,
--------------------------------------------------
Recapitalizations, Etc. The Exercise Price of this B Warrant and the number of
- -----------------------
shares of the Common Stock or other securities at the time issuable upon the
exercise of this B Warrant shall be appropriately adjusted to reflect any stock
dividend, stock split, combination of shares, reclassification, recapitalization
or other similar event affecting the number of outstanding shares of the Common
Stock or other securities of the Company.
(c) Adjustment for Reorganization, Consolidation, Merger, Etc. In
---------------------------------------------------------
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being referred to
as a "Reorganization"), then, in each case, the Holder, on exercise hereof at
any time after the consummation or effective date of such Reorganization (the
"Effective Date"), shall receive, in lieu of the shares of the Common Stock or
other securities of the Company at any time issuable upon the exercise of this B
Warrant prior to the Effective Date, the shares of the Common Stock and other
securities of the Company and property (including cash) to which the Holder
would have been entitled upon the Effective Date
3
if the Holder had exercised this B Warrant immediately prior thereto (all
subject to further adjustment as provided in this B Warrant).
(d) Certificate as to Adjustments. In case of any adjustment or
-------------------------------
readjustment in the price or kind of securities issuable on the exercise of this
B Warrant, the Company will promptly give written notice thereof to the Holder
in the form of a certificate, certified and confirmed by the Board of Directors
of the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
8. Fractional Shares. The Company shall not be required to issue or
------------------
cause to be issued fractional shares of the Common Stock on the exercise of this
B Warrant. The number of full shares of the Common Stock that shall be issuable
upon the exercise of this B Warrant shall be computed on the basis of the
aggregate number of shares of the Common Stock purchasable on exercise of this B
Warrant so presented. If any fraction of shares of the Common Stock would,
except for the provisions of this Paragraph 8, be issuable on the exercise of
this B Warrant, the Company shall, at its option, (a) pay an amount in cash
equal to the Exercise Price multiplied by such fraction or (b) round the number
of shares of the Common Stock issuable, up to the next whole number.
9. Notice. All notices and other communications hereunder shall be in
------
writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Mr. Steven D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga,
California 91730, with a copy to Norman T. Reynolds, Esq. at 815 Walker Street,
Suite 1250, Houston, Texas 77002, and if to the Holder addressed to Mr. Andrew
Barron Worden 730 Fifth Avenue, 9th Floor, New York, New York 10019. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
10. Miscellaneous.
-------------
(a) This B Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This
B Warrant may be amended only in writing and signed by the Company and the
Holder.
(b) Nothing in this B Warrant shall be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this B Warrant. This B Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
(c) This B Warrant shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflicts of laws provisions thereof. Each party hereby irrevocably submits to
the personal jurisdiction of the United States District Court for the Central
District of California, as well as of the Superior Courts of the State of
California in Riverside County, California over any suit, action or proceeding
arising out of or relating to this Agreement. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such mediation, arbitration,
suit, action or proceeding brought in any such county and any claim that any
such mediation, arbitration, suit, action or proceeding brought in such county
has been brought in an inconvenient forum.
(d) The headings herein are for convenience only, do not
constitute a part of this B Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(e) In case any one or more of the provisions of this B Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this B Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this B Warrant.
4
(f) The Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this B Warrant.
(g) In the event of any conflict between the terms of this B
Warrant or the Stock Purchase Agreement, the terms of the Stock Purchase
Agreement shall control.
IN WITNESS WHEREOF, the Company has caused this B Warrant to be duly
executed by the authorized officer as of the date first above stated.
CYBER PUBLIC RELATIONS, INC.
By
----------------------------------------------
Steven D. Rosenthal, Chief Executive Officer
5
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing B Warrant)
To: Cyber Public Relations, Inc.
In accordance with the B Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase ______________
shares of the Common Stock (the "Common Stock"), $0.001 par value, of Cyber
Public Relations, Inc. and encloses this B Warrant and $_______ for each share
of the Common Stock being purchased or an aggregate of $________________ in cash
or certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the B Warrant) together with any
applicable taxes payable by the undersigned pursuant to the B Warrant.
The undersigned requests that certificates for the shares of the Common
Stock issuable upon this exercise be issued in the name of:
________________________________________________
________________________________________________
________________________________________________
________________________________________________
(Please print name and address)
________________________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of the Common Stock issuable upon this exercise
shall not be all of the shares of the Common Stock which the undersigned is
entitled to purchase in accordance with the enclosed B Warrant, the undersigned
requests that a New B Warrant (as defined in the B Warrant) evidencing the right
to purchase the shares of the Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:
_________________________________________
_________________________________________
_________________________________________
(Please print name and address)
Dated: __________________________ Name of Holder:
(Print)________________________________
By_____________________________________
Name___________________________________
Title__________________________________
Signature must conform in all respects
to name of Holder as specified on the
face of the B Warrant
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A STOCK PURCHASE AGREEMENT (THE "STOCK PURCHASE AGREEMENT"), DATED
THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE
PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE
RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE
COMPANY.
---------------------------------------
CYBER PUBLIC RELATIONS, INC.
C WARRANT FOR THE PURCHASE OF COMMON STOCK
2,000,000 Shares Rancho Cucamonga, California
THIS IS TO CERTIFY that pursuant to that certain Stock Purchase Agreement
of even date herewith executed by the parties hereto (the "Stock Purchase
Agreement"), for value received, BARRON PARTNERS LP (the "Holder") is entitled
at any time from the date hereof, but prior to 5:00 p.m., Rancho Cucamonga,
California time on January ___, 2009, or 18 months after the effectiveness of a
Registration Statement (hereinafter defined) subsequent to the issuance hereof,
whichever is longer, subject to and upon the terms and conditions contained
herein, to purchase up to 2,000,000 fully paid and non-assessable shares of the
common stock, par value $0.001 per share (the "Common Stock") of CYBER PUBLIC
RELATIONS, INC., a Florida corporation (the "Company"), at a purchase price of
$2.00 per share of the Common Stock (the "Exercise Price") such number of the
shares and the Exercise Price being subject to adjustment as provided herein.
This C Warrant shall be void and of no effect and all rights hereunder
shall cease at 5:00 p.m., Rancho Cucamonga, California time on January ___,
2009, or 18 months after the effectiveness of a Registration Statement
subsequent to the issuance hereof, whichever is longer, except to the extent
theretofore exercised; provided that in the case of the earlier dissolution of
the Company, this C Warrant shall become void on the date fixed for such
dissolution. As used herein, "Registration Statement" means a registration
statement filed by the Company on Form S-1, SB-2, or S-3, or some other similar
form pursuant to the Securities Act of 1933, as amended (the "1933 Act") to
register the resale of the shares of the Common Stock upon the exercise of this
C Warrant.
1. Registration of this C Warrant. The Company shall register this C
--------------------------------
Warrant upon records to be maintained by the Company for that purpose (the "C
Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this C Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
2. Investment Representation. The Holder by accepting this C Warrant
--------------------------
represents that the Holder is acquiring this C Warrant for its own account or
the account of an affiliate for investment purposes and not with the view to any
offering or distribution and that the Holder will not sell or otherwise dispose
of this C Warrant or the underlying Common Stock in violation of applicable
securities laws. The Holder acknowledges that the certificates representing any
shares of the Common Stock will bear a legend indicating that they have not been
registered under the 1933 Act and may not be sold by the Holder except pursuant
to an effective Registration Statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws.
3. Validity of C Warrant and Issuance of the Common Stock. The Company
------------------------------------------------------
represents and warrants that this C Warrant has been duly authorized and validly
issued and warrants and agrees that the Common Stock that may be issued upon the
exercise of the rights represented by this C Warrant will, when issued upon such
exercise, be
1
duly authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof. The Company further
warrants and agrees that during the period within which the rights represented
by this C Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of the Common Stock to
provide for the exercise of the rights represented by this C Warrant.
4. Registration of Transfers and Exchange of this C Warrant.
--------------------------------------------------------------
(a) Subject to compliance with the legend set forth on the face of
this C Warrant, the Company shall register the transfer of any portion of this C
Warrant in the C Warrant Register, upon surrender of this C Warrant with the
Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to Paragraph 9 hereof. Upon any such
registration or transfer, a new warrant to purchase the Common Stock, in
substantially the form of this C Warrant (any such new warrant, a "New C
Warrant"), evidencing the portion of this C Warrant so transferred shall be
issued to the transferee and a New C Warrant evidencing the remaining portion of
this C Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New C Warrant by the transferee thereof shall be
deemed the acceptance of such transferee of all of the rights and obligations of
the Holder.
(b) This C Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Paragraph 9
for one or more New C Warrants, evidencing in the aggregate the right to
purchase the number of shares of the Common Stock which may then be purchased
hereunder. Any such New C Warrant will be dated the date of such exchange.
5. Exercise of this C Warrant.
----------------------------
(a) Upon surrender of this C Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Paragraph 9 hereof, and upon payment and delivery of the
Exercise Price multiplied by the number of shares of the Common Stock that the
Holder intends to purchase hereunder, in lawful money of the United States of
America, in cash or by certified or official bank check or checks, to the
Company, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly but in no event later than five business days after the
Date of Exercise (as defined herein) issue or cause to be issued and delivered
to or upon the written order of the Holder and in such name or names as the
Holder may designate (subject to the restrictions on transfer described in the
legend set forth on the face of this C Warrant), a certificate for the shares of
the Common Stock issuable upon such exercise, with such restrictive legend as
required by the 1933 Act. Any person so designated by the Holder to receive the
shares of the Common Stock shall be deemed to have become holder of record of
the Common Stock as of the Date of Exercise of this C Warrant.
(b) "Date of Exercise" means the date on which the Company shall
have received (i) this C Warrant (or any New C Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New C Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of shares of the Common Stock so indicated by the Holder to be
purchased.
(c) This C Warrant shall be exercisable at any time and from time
to time for such number of shares of the Common Stock as is indicated in the
attached Form of Election to Purchase. If less than all of the shares of the
Common Stock which may be purchased under this C Warrant are purchased at any
time, the Company shall issue or cause to be issued, at its expense, a New C
Warrant evidencing the right to purchase the remaining number of shares of the
Common Stock for which no exercise has been evidenced by this C Warrant.
(d) Notwithstanding anything contained herein to the contrary, the
holder of this C Warrant may, at its election exercised in its sole discretion,
exercise this C Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Exercise Price, elect instead to receive upon such exercise the
"Net Number" of shares of the Common Stock determined according to the following
formula (a "Cashless Exercise"):
2
Net Number = (A x B) - (A x C)
-----------------
B
For purposes of the foregoing formula:
A = the total number shares with respect to which this C
Warrant is then being exercised.
B = the last reported sale price (as reported by
Bloomberg) of the Common Stock on the date immediately
preceding the date of the notice of exercise of this C
Warrant.
C = the Exercise Price then in effect at the time of such
exercise.
Provided, however, notwithstanding anything herein contained to the
contrary, the Holder may not affect a Cashless Exercise of this C Warrant until
after January ___, 2006, and thereafter so long as there is an effective
Registration Statement with respect to the shares of the Common Stock.
6. Call by the Company. In the event that the closing price of the
-------------------
Common Stock as listed on a nationally public securities market is $2.75 or more
for a period of 20 consecutive trading days and the Registration Statement for
the Common Stock is effective for such 20 consecutive trading days, the Company
may call this C Warrant upon 30 days notice and pay to the Holder the sum of
$0.001 per share of the Common Stock covered by this C Warrant, for all such
shares not purchased under the exercise provisions at the expiration of the 30
days notice period.
7. Adjustment of Exercise Price and Number of Shares. The shares of
----------------------------------------------------
the Common Stock or other securities at the time issuable upon exercise of this
C Warrant and the Exercise Price therefor, are subject to adjustment upon the
occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends,
--------------------------------------------------
Recapitalizations, Etc. The Exercise Price of this C Warrant and the number of
- -----------------------
shares of the Common Stock or other securities at the time issuable upon the
exercise of this C Warrant shall be appropriately adjusted to reflect any stock
dividend, stock split, combination of shares, reclassification, recapitalization
or other similar event affecting the number of outstanding shares of the Common
Stock or other securities of the Company.
(b) Adjustment for Reorganization, Consolidation, Merger, Etc. In
---------------------------------------------------------
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being referred to
as a "Reorganization"), then, in each case, the Holder, on exercise hereof at
any time after the consummation or effective date of such Reorganization (the
"Effective Date"), shall receive, in lieu of the shares of the Common Stock or
other securities of the Company at any time issuable upon the exercise of this C
Warrant prior to the Effective Date, the shares of the Common Stock and other
securities of the Company and property (including cash) to which the Holder
would have been entitled upon the Effective Date if the Holder had exercised
this C Warrant immediately prior thereto (all subject to further adjustment as
provided in this C Warrant).
(c) Certificate as to Adjustments. In case of any adjustment or
-------------------------------
readjustment in the price or kind of securities issuable on the exercise of this
C Warrant, the Company will promptly give written notice thereof to the Holder
in the form of a certificate, certified and confirmed by the Board of Directors
of the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
8. Fractional Shares. The Company shall not be required to issue or
------------------
cause to be issued fractional shares of the Common Stock on the exercise of this
C Warrant. The number of full shares of the Common Stock
3
that shall be issuable upon the exercise of this C Warrant shall be computed on
the basis of the aggregate number of shares of the Common Stock purchasable on
exercise of this C Warrant so presented. If any fraction of shares of the Common
Stock would, except for the provisions of this Paragraph 8, be issuable on the
exercise of this C Warrant, the Company shall, at its option, (a) pay an amount
in cash equal to the Exercise Price multiplied by such fraction or (b) round the
number of shares of the Common Stock issuable, up to the next whole number.
9. Notice. All notices and other communications hereunder shall be in
------
writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Mr. Steven D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga,
California 91730, with a copy to Norman T. Reynolds, Esq. at 815 Walker Street,
Suite 1250, Houston, Texas 77002, and if to the Holder addressed to Mr. Andrew
Barron Worden 730 Fifth Avenue, 9th Floor, New York, New York 10019. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
10. Miscellaneous.
-------------
(a) This C Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This
C Warrant may be amended only in writing and signed by the Company and the
Holder.
(b) Nothing in this C Warrant shall be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this C Warrant. This C Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
(c) This C Warrant shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflicts of laws provisions thereof. Each party hereby irrevocably submits to
the personal jurisdiction of the United States District Court for the Central
District of California, as well as of the Superior Courts of the State of
California in Riverside County, California over any suit, action or proceeding
arising out of or relating to this Agreement. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such mediation, arbitration,
suit, action or proceeding brought in any such county and any claim that any
such mediation, arbitration, suit, action or proceeding brought in such county
has been brought in an inconvenient forum.
(d) The headings herein are for convenience only, do not
constitute a part of this C Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(e) In case any one or more of the provisions of this C Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this C Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this C Warrant.
(f) The Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this C Warrant.
(g) In the event of any conflict between the terms of this C
Warrant or the Stock Purchase Agreement, the terms of the Stock Purchase
Agreement shall control.
4
IN WITNESS WHEREOF, the Company has caused this C Warrant to be duly
executed by the authorized officer as of the date first above stated.
CYBER PUBLIC RELATIONS, INC.
By
-----------------------------------------------
Steven D. Rosenthal, Chief Executive Officer
5
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing C Warrant)
To: Cyber Public Relations, Inc.
In accordance with the C Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase ______________
shares of the Common Stock (the "Common Stock"), $0.001 par value, of Cyber
Public Relations, Inc. and encloses this C Warrant and $_______ for each share
of the Common Stock being purchased or an aggregate of $________________ in cash
or certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the C Warrant) together with any
applicable taxes payable by the undersigned pursuant to the C Warrant.
The undersigned requests that certificates for the shares of the Common
Stock issuable upon this exercise be issued in the name of:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print name and address)
_______________________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of the Common Stock issuable upon this exercise
shall not be all of the shares of the Common Stock which the undersigned is
entitled to purchase in accordance with the enclosed C Warrant, the undersigned
requests that a New C Warrant (as defined in the C Warrant) evidencing the right
to purchase the shares of the Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:
__________________________________________
__________________________________________
__________________________________________
(Please print name and address)
Dated: _________________________ Name of Holder:
(Print)________________________________
By_____________________________________
Name___________________________________
Title__________________________________
Signature must conform in all respects
to name of Holder as specified on the
face of the C Warrant
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A STOCK PURCHASE AGREEMENT (THE "STOCK PURCHASE AGREEMENT"), DATED
THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE
PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE
RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE
COMPANY.
---------------------------------------
CYBER PUBLIC RELATIONS, INC.
D WARRANT FOR THE PURCHASE OF COMMON STOCK
1,000,000 Shares Rancho Cucamonga, California
THIS IS TO CERTIFY that pursuant to that certain Stock Purchase Agreement
of even date herewith executed by the parties hereto (the "Stock Purchase
Agreement"), for value received, BARRON PARTNERS LP (the "Holder") is entitled
at any time from the date hereof, but prior to 5:00 p.m., Rancho Cucamonga,
California time on January ___, 2009, or 18 months after the effectiveness of a
Registration Statement (hereinafter defined) subsequent to the issuance hereof,
whichever is longer, subject to and upon the terms and conditions contained
herein, to purchase up to 1,000,000 fully paid and non-assessable shares of the
common stock, par value $0.001 per share (the "Common Stock") of CYBER PUBLIC
RELATIONS, INC., a Florida corporation (the "Company"), at a purchase price of
$4.00 per share of the Common Stock (the "Exercise Price") such number of the
shares and the Exercise Price being subject to adjustment as provided herein.
This D Warrant shall be void and of no effect and all rights hereunder
shall cease at 5:00 p.m., Rancho Cucamonga, California time on January ___,
2009, or 18 months after the effectiveness of a Registration Statement
subsequent to the issuance hereof, whichever is longer, except to the extent
theretofore exercised; provided that in the case of the earlier dissolution of
the Company, this D Warrant shall become void on the date fixed for such
dissolution. As used herein, "Registration Statement" means a registration
statement filed by the Company on Form S-1, SB-2, or S-3, or some other similar
form pursuant to the Securities Act of 1933, as amended (the "1933 Act") to
register the resale of the shares of the Common Stock upon the exercise of this
D Warrant.
1. Registration of this D Warrant. The Company shall register this D
--------------------------------
Warrant upon records to be maintained by the Company for that purpose (the "D
Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this D Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
2. Investment Representation. The Holder by accepting this D Warrant
--------------------------
represents that the Holder is acquiring this D Warrant for its own account or
the account of an affiliate for investment purposes and not with the view to any
offering or distribution and that the Holder will not sell or otherwise dispose
of this D Warrant or the underlying Common Stock in violation of applicable
securities laws. The Holder acknowledges that the certificates representing any
shares of the Common Stock will bear a legend indicating that they have not been
registered under the 1933 Act and may not be sold by the Holder except pursuant
to an effective Registration Statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws.
3. Validity of D Warrant and Issuance of the Common Stock. The Company
------------------------------------------------------
represents and warrants that this D Warrant has been duly authorized and validly
issued and warrants and agrees that the Common Stock that may be issued upon the
exercise of the rights represented by this D Warrant will, when issued upon such
exercise,
1
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof. The Company
further warrants and agrees that during the period within which the rights
represented by this D Warrant may be exercised, the Company will at all times
have authorized and reserved a sufficient number of shares of the Common Stock
to provide for the exercise of the rights represented by this D Warrant.
4. Registration of Transfers and Exchange of this D Warrant.
--------------------------------------------------------------
(a) Subject to compliance with the legend set forth on the face of
this D Warrant, the Company shall register the transfer of any portion of this D
Warrant in the D Warrant Register, upon surrender of this D Warrant with the
Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to Paragraph 9 hereof. Upon any such
registration or transfer, a new warrant to purchase the Common Stock, in
substantially the form of this D Warrant (any such new warrant, a "New D
Warrant"), evidencing the portion of this D Warrant so transferred shall be
issued to the transferee and a New D Warrant evidencing the remaining portion of
this D Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New D Warrant by the transferee thereof shall be
deemed the acceptance of such transferee of all of the rights and obligations of
the Holder.
(b) This D Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Paragraph 9
for one or more New D Warrants, evidencing in the aggregate the right to
purchase the number of shares of the Common Stock which may then be purchased
hereunder. Any such New D Warrant will be dated the date of such exchange.
5. Exercise of this D Warrant.
----------------------------
(a) Upon surrender of this D Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Paragraph 9 hereof, and upon payment and delivery of the
Exercise Price multiplied by the number of shares of the Common Stock that the
Holder intends to purchase hereunder, in lawful money of the United States of
America, in cash or by certified or official bank check or checks, to the
Company, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly but in no event later than five business days after the
Date of Exercise (as defined herein) issue or cause to be issued and delivered
to or upon the written order of the Holder and in such name or names as the
Holder may designate (subject to the restrictions on transfer described in the
legend set forth on the face of this D Warrant), a certificate for the shares of
the Common Stock issuable upon such exercise, with such restrictive legend as
required by the 1933 Act. Any person so designated by the Holder to receive the
shares of the Common Stock shall be deemed to have become holder of record of
the Common Stock as of the Date of Exercise of this D Warrant.
(b) "Date of Exercise" means the date on which the Company shall
have received (i) this D Warrant (or any New D Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New D Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of shares of the Common Stock so indicated by the Holder to be
purchased.
(c) This D Warrant shall be exercisable at any time and from time
to time for such number of shares of the Common Stock as is indicated in the
attached Form of Election to Purchase. If less than all of the shares of the
Common Stock which may be purchased under this D Warrant are purchased at any
time, the Company shall issue or cause to be issued, at its expense, a New D
Warrant evidencing the right to purchase the remaining number of shares of the
Common Stock for which no exercise has been evidenced by this D Warrant.
(d) Notwithstanding anything contained herein to the contrary, the
holder of this D Warrant may, at its election exercised in its sole discretion,
exercise this D Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Exercise Price, elect instead to receive upon such exercise the
"Net Number" of shares of the Common Stock determined according to the following
formula (a "Cashless Exercise"):
2
Net Number = (A x B) - (A x C)
-----------------
B
For purposes of the foregoing formula:
A = the total number shares with respect to which this D
Warrant is then being exercised.
B = the last reported sale price (as reported by
Bloomberg) of the Common Stock on the date immediately
preceding the date of the notice of exercise of this D
Warrant.
C = the Exercise Price then in effect at the time of such
exercise.
Provided, however, notwithstanding anything herein contained to the
contrary, the Holder may not affect a Cashless Exercise of this D Warrant until
after January ___, 2006, and thereafter so long as there is an effective
Registration Statement with respect to the shares of the Common Stock.
6. Call by the Company. In the event that the closing price of the
-------------------
Common Stock as listed on a nationally public securities market is $5.50 or more
for a period of 20 consecutive trading days and the Registration Statement for
the Common Stock is effective for such 20 consecutive trading days, the Company
may call this D Warrant upon 30 days notice and pay to the Holder the sum of
$0.001 per share of the Common Stock covered by this D Warrant, for all such
shares not purchased under the exercise provisions at the expiration of the 30
days notice period.
7. Adjustment of Exercise Price and Number of Shares. The shares of
----------------------------------------------------
the Common Stock or other securities at the time issuable upon exercise of this
D Warrant and the Exercise Price therefore, are subject to adjustment upon the
occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends,
--------------------------------------------------
Recapitalizations, Etc. The Exercise Price of this D Warrant and the number of
- -----------------------
shares of the Common Stock or other securities at the time issuable upon the
exercise of this D Warrant shall be appropriately adjusted to reflect any stock
dividend, stock split, combination of shares, reclassification, recapitalization
or other similar event affecting the number of outstanding shares of the Common
Stock or other securities of the Company.
(b) Adjustment for Reorganization, Consolidation, Merger, Etc. In
---------------------------------------------------------
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being referred to
as a "Reorganization"), then, in each case, the Holder, on exercise hereof at
any time after the consummation or effective date of such Reorganization (the
"Effective Date"), shall receive, in lieu of the shares of the Common Stock or
other securities of the Company at any time issuable upon the exercise of this D
Warrant prior to the Effective Date, the shares of the Common Stock and other
securities of the Company and property (including cash) to which the Holder
would have been entitled upon the Effective Date if the Holder had exercised
this D Warrant immediately prior thereto (all subject to further adjustment as
provided in this D Warrant).
(c) Certificate as to Adjustments. In case of any adjustment or
-------------------------------
readjustment in the price or kind of securities issuable on the exercise of this
D Warrant, the Company will promptly give written notice thereof to the Holder
in the form of a certificate, certified and confirmed by the Board of Directors
of the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
8. Fractional Shares. The Company shall not be required to issue or
------------------
cause to be issued fractional shares of the Common Stock on the exercise of this
D Warrant. The number of full shares of the Common Stock that shall be issuable
upon the exercise of this D Warrant shall be computed on the basis of the
aggregate number of shares of the Common Stock purchasable on exercise of this D
Warrant so presented. If any fraction of shares of the
3
Common Stock would, except for the provisions of this Paragraph 8, be issuable
on the exercise of this D Warrant, the Company shall, at its option, (a) pay an
amount in cash equal to the Exercise Price multiplied by such fraction or (b)
round the number of shares of the Common Stock issuable, up to the next whole
number.
9. Notice. All notices and other communications hereunder shall be in
------
writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Mr. Steven D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga,
California 91730, with a copy to Norman T. Reynolds, Esq. at 815 Walker Street,
Suite 1250, Houston, Texas 77002, and if to the Holder addressed to Mr. Andrew
Barron Worden 730 Fifth Avenue, 9th Floor, New York, New York 10019. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
10. Miscellaneous.
-------------
(a) This D Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This
D Warrant may be amended only in writing and signed by the Company and the
Holder.
(b) Nothing in this D Warrant shall be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this D Warrant. This D Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
(c) This D Warrant shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflicts of laws provisions thereof. Each party hereby irrevocably submits to
the personal jurisdiction of the United States District Court for the Central
District of California, as well as of the Superior Courts of the State of
California in Riverside County, California over any suit, action or proceeding
arising out of or relating to this Agreement. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such mediation, arbitration,
suit, action or proceeding brought in any such county and any claim that any
such mediation, arbitration, suit, action or proceeding brought in such county
has been brought in an inconvenient forum.
(d) The headings herein are for convenience only, do not
constitute a part of this D Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(e) In case any one or more of the provisions of this D Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this D Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this D Warrant.
(f) The Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this D Warrant.
(g) In the event of any conflict between the terms of this D
Warrant or the Stock Purchase Agreement, the terms of the Stock Purchase
Agreement shall control.
4
IN WITNESS WHEREOF, the Company has caused this D Warrant to be duly
executed by the authorized officer as of the date first above stated.
CYBER PUBLIC RELATIONS, INC.
By
-----------------------------------------------
Steven D. Rosenthal, Chief Executive Officer
5
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing D Warrant)
To: Cyber Public Relations, Inc.
In accordance with the D Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase ______________
shares of the Common Stock (the "Common Stock"), $0.001 par value, of Cyber
Public Relations, Inc. and encloses this D Warrant and $_______ for each share
of the Common Stock being purchased or an aggregate of $________________ in cash
or certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the D Warrant) together with any
applicable taxes payable by the undersigned pursuant to the D Warrant.
The undersigned requests that certificates for the shares of the
Common Stock issuable upon this exercise be issued in the name of:
_______________________________________________
_______________________________________________
_______________________________________________
(Please print name and address)
_______________________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of the Common Stock issuable upon this exercise
shall not be all of the shares of the Common Stock which the undersigned is
entitled to purchase in accordance with the enclosed D Warrant, the undersigned
requests that a New D Warrant (as defined in the D Warrant) evidencing the right
to purchase the shares of the Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:
_________________________________________
_________________________________________
_________________________________________
(Please print name and address)
Dated: __________________________ Name of Holder:
(Print)____________________________
By_________________________________
Name_______________________________
Title______________________________
Signature must conform in all respects
to name of Holder as specified on the
face of the D Warrant
THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 ACT, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS COMMON STOCK PURCHASE WARRANT, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, OR
(C) IF REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, A STOCK PURCHASE AGREEMENT (THE "STOCK PURCHASE AGREEMENT"), DATED
THE DATE HEREOF, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS AMONG THE
PARTIES, INCLUDING, WITHOUT LIMITATION, PROVISIONS WHICH LIMIT THE EXERCISE
RIGHTS OF THE HOLDER AND SPECIFY MANDATORY REDEMPTION OBLIGATIONS OF THE
COMPANY.
---------------------------------------
CYBER PUBLIC RELATIONS, INC.
E WARRANT FOR THE PURCHASE OF COMMON STOCK
1,000,000 Shares Rancho Cucamonga, California
THIS IS TO CERTIFY that pursuant to that certain Stock Purchase Agreement
of even date herewith executed by the parties hereto (the "Stock Purchase
Agreement"), for value received, BARRON PARTNERS LP (the "Holder") is entitled
at any time from the date hereof, but prior to 5:00 p.m., Rancho Cucamonga,
California time on January ___, 2009, or 18 months after the effectiveness of a
Registration Statement (hereinafter defined) subsequent to the issuance hereof,
whichever is longer, subject to and upon the terms and conditions contained
herein, to purchase up to 1,000,000 fully paid and non-assessable shares of the
common stock, par value $0.001 per share (the "Common Stock") of CYBER PUBLIC
RELATIONS, INC., a Florida corporation (the "Company"), at a purchase price of
$6.00 per share of the Common Stock (the "Exercise Price")
such number of the shares and the Exercise Price being subject to
adjustment as provided herein.
This E Warrant shall be void and of no effect and all rights hereunder
shall cease at 5:00 p.m., Rancho Cucamonga, California time on January ___,
2009, or 18 months after the effectiveness of a Registration Statement
subsequent to the issuance hereof, whichever is longer, except to the extent
theretofore exercised; provided that in the case of the earlier dissolution of
the Company, this E Warrant shall become void on the date fixed for such
dissolution. As used herein, "Registration Statement" means a registration
statement filed by the Company on Form S-1, SB-2, or S-3, or some other similar
form pursuant to the Securities Act of 1933, as amended (the "1933 Act") to
register the resale of the shares of the Common Stock upon the exercise of this
E Warrant.
1. Registration of this E Warrant. The Company shall register this E
--------------------------------
Warrant upon records to be maintained by the Company for that purpose (the "E
Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this E Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
2. Investment Representation. The Holder by accepting this E Warrant
--------------------------
represents that the Holder is acquiring this E Warrant for its own account or
the account of an affiliate for investment purposes and not with the view to any
offering or distribution and that the Holder will not sell or otherwise dispose
of this E Warrant or the underlying Common Stock in violation of applicable
securities laws. The Holder acknowledges that the certificates representing any
shares of the Common Stock will bear a legend indicating that they have not been
registered under the 1933 Act and may not be sold by the Holder except pursuant
to an effective Registration Statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws.
3. Validity of E Warrant and Issuance of the Common Stock. The Company
------------------------------------------------------
represents and warrants that this E Warrant has been duly authorized and validly
issued and warrants and agrees that the Common Stock that
1
may be issued upon the exercise of the rights represented by this E Warrant
will, when issued upon such exercise, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof. The Company further warrants and agrees that during the
period within which the rights represented by this E Warrant may be exercised,
the Company will at all times have authorized and reserved a sufficient number
of shares of the Common Stock to provide for the exercise of the rights
represented by this E Warrant.
4. Registration of Transfers and Exchange of this E Warrant.
--------------------------------------------------------------
(a) Subject to compliance with the legend set forth on the face of
this E Warrant, the Company shall register the transfer of any portion of this E
Warrant in the E Warrant Register, upon surrender of this E Warrant with the
Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to Paragraph 9 hereof. Upon any such
registration or transfer, a new warrant to purchase the Common Stock, in
substantially the form of this E Warrant (any such new warrant, a "New E
Warrant"), evidencing the portion of this E Warrant so transferred shall be
issued to the transferee and a New E Warrant evidencing the remaining portion of
this E Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New E Warrant by the transferee thereof shall be
deemed the acceptance of such transferee of all of the rights and obligations of
the Holder.
(b) This E Warrant is exchangeable, upon the surrender hereof by
the Holder to the office of the Company specified in or pursuant to Paragraph 9
for one or more New E Warrants, evidencing in the aggregate the right to
purchase the number of shares of the Common Stock which may then be purchased
hereunder. Any such New E Warrant will be dated the date of such exchange.
5. Exercise of this E Warrant.
----------------------------
(a) Upon surrender of this E Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Paragraph 9 hereof, and upon payment and delivery of the
Exercise Price multiplied by the number of shares of the Common Stock that the
Holder intends to purchase hereunder, in lawful money of the United States of
America, in cash or by certified or official bank check or checks, to the
Company, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly but in no event later than five business days after the
Date of Exercise (as defined herein) issue or cause to be issued and delivered
to or upon the written order of the Holder and in such name or names as the
Holder may designate (subject to the restrictions on transfer described in the
legend set forth on the face of this E Warrant), a certificate for the shares of
the Common Stock issuable upon such exercise, with such restrictive legend as
required by the 1933 Act. Any person so designated by the Holder to receive the
shares of the Common Stock shall be deemed to have become holder of record of
the Common Stock as of the Date of Exercise of this E Warrant.
(b) "Date of Exercise" means the date on which the Company shall
have received (i) this E Warrant (or any New E Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such New E Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of shares of the Common Stock so indicated by the Holder to be
purchased.
(c) This E Warrant shall be exercisable at any time and from time
to time for such number of shares of the Common Stock as is indicated in the
attached Form of Election to Purchase. If less than all of the shares of the
Common Stock which may be purchased under this E Warrant are purchased at any
time, the Company shall issue or cause to be issued, at its expense, a New E
Warrant evidencing the right to purchase the remaining number of shares of the
Common Stock for which no exercise has been evidenced by this E Warrant.
(d) Notwithstanding anything contained herein to the contrary, the
holder of this E Warrant may, at its election exercised in its sole discretion,
exercise this E Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in
payment of the Exercise Price, elect instead to receive upon such exercise the
"Net Number" of shares of the Common Stock determined according to the following
formula (a "Cashless Exercise"):
Net Number = (A x B) - (A x C)
-----------------
B
2
For purposes of the foregoing formula:
A = the total number shares with respect to which this E
Warrant is then being exercised.
B = the last reported sale price (as reported by
Bloomberg) of the Common Stock on the date immediately
preceding the date of the notice of exercise of this E
Warrant.
C = the Exercise Price then in effect at the time of such
exercise.
Provided, however, notwithstanding anything herein contained to the
contrary, the Holder may not affect a Cashless Exercise of this E Warrant until
after January ___, 2006, and thereafter so long as there is an effective
Registration Statement with respect to the shares of the Common Stock.
6. Call by the Company. In the event that the closing price of the
-------------------
Common Stock as listed on a nationally public securities market is $8.00 or more
for a period of 20 consecutive trading days and the Registration Statement for
the Common Stock is effective for such 20 consecutive trading days, the Company
may call this E Warrant upon 30 days notice and pay to the Holder the sum of
$0.001 per share of the Common Stock covered by this E Warrant, for all such
shares not purchased under the exercise provisions at the expiration of the 30
days notice period.
7. Adjustment of Exercise Price and Number of Shares. The shares of
----------------------------------------------------
the Common Stock or other securities at the time issuable upon exercise of this
E Warrant and the Exercise Price therefore, are subject to adjustment upon the
occurrence of the following events:
(a) Adjustment for Stock Splits, Stock Dividends,
--------------------------------------------------
Recapitalizations, Etc. The Exercise Price of this E Warrant and the number of
- -----------------------
shares of the Common Stock or other securities at the time issuable upon the
exercise of this E Warrant shall be appropriately adjusted to reflect any stock
dividend, stock split, combination of shares, reclassification, recapitalization
or other similar event affecting the number of outstanding shares of the Common
Stock or other securities of the Company.
(b) Adjustment for Reorganization, Consolidation, Merger, Etc. In
---------------------------------------------------------
case of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being referred to
as a "Reorganization"), then, in each case, the Holder, on exercise hereof at
any time after the consummation or effective date of such Reorganization (the
"Effective Date"), shall receive, in lieu of the shares of the Common Stock or
other securities of the Company at any time issuable upon the exercise of this E
Warrant prior to the Effective Date, the shares of the Common Stock and other
securities of the Company and property (including cash) to which the Holder
would have been entitled upon the Effective Date if the Holder had exercised
this E Warrant immediately prior thereto (all subject to further adjustment as
provided in this E Warrant).
(c) Certificate as to Adjustments. In case of any adjustment or
-------------------------------
readjustment in the price or kind of securities issuable on the exercise of this
E Warrant, the Company will promptly give written notice thereof to the Holder
in the form of a certificate, certified and confirmed by the Board of Directors
of the Company, setting forth such adjustment or readjustment and showing in
reasonable detail the facts upon which such adjustment or readjustment is based.
8. Fractional Shares. The Company shall not be required to issue or
------------------
cause to be issued fractional shares of the Common Stock on the exercise of this
E Warrant. The number of full shares of the Common Stock that shall be issuable
upon the exercise of this E Warrant shall be computed on the basis of the
aggregate number of shares of the Common Stock purchasable on exercise of this E
Warrant so presented. If any fraction of shares of the Common Stock would,
except for the provisions of this Paragraph 8, be issuable on the exercise of
this E Warrant,
3
the Company shall, at its option, (a) pay an amount in cash equal to the
Exercise Price multiplied by such fraction or (b) round the number of shares of
the Common Stock issuable, up to the next whole number.
9. Notice. All notices and other communications hereunder shall be in
------
writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Mr. Steven D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga,
California 91730, with a copy to Norman T. Reynolds, Esq. at 815 Walker Street,
Suite 1250, Houston, Texas 77002, and if to the Holder addressed to Mr. Andrew
Barron Worden 730 Fifth Avenue, 9th Floor, New York, New York 10019. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
10. Miscellaneous.
-------------
(a) This E Warrant shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns. This
E Warrant may be amended only in writing and signed by the Company and the
Holder.
(b) Nothing in this E Warrant shall be construed to give to any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or cause of action under this E Warrant. This E Warrant
shall be for the sole and exclusive benefit of the Company and the Holder.
(c) This E Warrant shall be governed by and construed in
accordance with the laws of the State of California, without regard to any
conflicts of laws provisions thereof. Each party hereby irrevocably submits to
the personal jurisdiction of the United States District Court for the Central
District of California, as well as of the Superior Courts of the State of
California in Riverside County, California over any suit, action or proceeding
arising out of or relating to this Agreement. Each party hereby irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such mediation, arbitration,
suit, action or proceeding brought in any such county and any claim that any
such mediation, arbitration, suit, action or proceeding brought in such county
has been brought in an inconvenient forum.
(d) The headings herein are for convenience only, do not
constitute a part of this E Warrant and shall not be deemed to limit or affect
any of the provisions hereof.
(e) In case any one or more of the provisions of this E Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this E Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this E Warrant.
(f) The Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this E Warrant.
(g) In the event of any conflict between the terms of this E
Warrant or the Stock Purchase Agreement, the terms of the Stock Purchase
Agreement shall control.
4
IN WITNESS WHEREOF, the Company has caused this E Warrant to be duly
executed by the authorized officer as of the date first above stated.
CYBER PUBLIC RELATIONS, INC.
By
----------------------------------------------
Steven D. Rosenthal, Chief Executive Officer
5
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing E Warrant)
To: Cyber Public Relations, Inc.
In accordance with the E Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase ______________
shares of the Common Stock (the "Common Stock"), $0.001 par value, of Cyber
Public Relations, Inc. and encloses this E Warrant and $_______ for each share
of the Common Stock being purchased or an aggregate of $________________ in cash
or certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the E Warrant) together with any
applicable taxes payable by the undersigned pursuant to the E Warrant.
The undersigned requests that certificates for the shares of the Common
Stock issuable upon this exercise be issued in the name of:
____________________________________________
____________________________________________
____________________________________________
(Please print name and address)
____________________________________________
(Please insert Social Security or Tax Identification Number)
If the number of shares of the Common Stock issuable upon this exercise
shall not be all of the shares of the Common Stock which the undersigned is
entitled to purchase in accordance with the enclosed E Warrant, the undersigned
requests that a New E Warrant (as defined in the E Warrant) evidencing the right
to purchase the shares of the Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:
____________________________________________
____________________________________________
____________________________________________
(Please print name and address)
Dated: ___________________________ Name of Holder:
(Print)___________________________
By________________________________
Name______________________________
Title_____________________________
Signature must conform in all respects
to name of Holder as specified on the
face of the E Warrant
ATTACHMENT B
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of ___ day of January, 2004 by and among CYBER PUBLIC RELATIONS, INC., a
Florida corporation (the "Company"), and BARRON PARTNERS LP (the "Investor").
WHEREAS, the Company and the Investor have executed that certain Stock
Purchase Agreement dated January 13, 2004, as amended on January 23, 2004 (the
"Stock Purchase Agreement"); and
WHEREAS, pursuant to the Stock Purchase Agreement, the Investor purchased
from the Company 2,000,000 shares of its Common Stock for a purchase price of
$1.00 per share, 1,500,000 cashless non-callable A Warrant for the purchase of
the Common Stock exercisable at $1.00 per share, 1,650,000 cashless and callable
B Warrant for the purchase of the Common Stock exercisable at $1.00 per share,
2,000,000 cashless and callable C Warrant for the purchase of the Common Stock
exercisable at $2.00 per share, 1,000,000 cashless and callable D Warrant for
the purchase of the Common Stock exercisable at $4.00 per share, and 1,000,000
cashless and callable E Warrant for the purchase of the Common Stock exercisable
at $6.00 per share; and
WHEREAS, unless otherwise defined herein, all capitalized terms herein
shall have the identical meaning as in the Stock Purchase Agreement; and
WHEREAS, the ability of the Investor to sell its shares of the Common Stock
is subject to certain restrictions under the 1933 Act; and
WHEREAS, as a condition to the Stock Purchase Agreement, the Company has
agreed to provide the Investor with a mechanism that will permit the Investor,
subject to a market stand-off agreement, to sell its shares of the Common Stock
in the future;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements, and subject to the terms and conditions herein
contained, the parties hereto hereby agree as follows:
ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER
1.1 Incorporation by Reference. The foregoing recitals are hereby
----------------------------
acknowledged to be true and accurate, and are incorporated herein by this
reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent
----------
with any other instrument or understanding among the parties governing the
affairs of the Company, shall supersede such instrument or understanding to the
fullest extent permitted by law. A copy of this Agreement shall be filed at the
Company's principal office.
ARTICLE II
DEMAND REGISTRATION RIGHTS
2.1 Definitions. As used herein, "Registrable Shares" means and
-----------
includes the shares of the Common Stock issued to the Investor pursuant to the
Stock Purchase Agreement. As to any particular Registrable Shares, such
securities will cease to be Registrable Shares when:
(a) They have been effectively registered under the 1933 Act and
disposed of in accordance with the Registration Statement hereinafter defined
covering them;
(b) They are or may be freely traded without registration pursuant
to Rule 144 under the 1933 Act (or any similar provisions that are then in
effect); or
1
(c) They have been otherwise transferred and new certificates for
them not bearing a restrictive legend have been issued by the Company and the
Company shall not have "stop transfer" instructions against them.
"Shares" shall mean, collectively, the shares of the Common Stock of the
Company being issued pursuant to the Stock Purchase Agreement and those shares
of the Common Stock issuable to the Investor upon exercise of the Warrants being
issued pursuant to the Stock Purchase Agreement.
2.2 Registration of Registrable Securities. The Company shall prepare
---------------------------------------
and file within 60 days following the date hereof (the "Filing Date") a
registration statement (the "Registration Statement") covering the resale of the
Registrable Securities. As used herein, "Registration Statement" means a
registration statement filed by the Company on Form S-1, SB-2, or S-3, or some
other similar form pursuant to the 1933 Act to register the resale of the
Shares. The Company shall use its best efforts to cause the Registration
Statement to be declared effective by the SEC on the earlier of:
(a) One hundred eighty days following the Closing Date pursuant to
the Stock Purchase Agreement;
(b) Ten days following the receipt of a "No Review" or similar
letter from the SEC; or
(c) The first day following the day the SEC determines the
Registration Statement eligible to be declared effective (the "Required
Effectiveness Date").
Nothing contained herein shall be deemed to limit the number of Registrable
Securities to be registered by the Company hereunder. As a result, should the
Registration Statement not relate to the maximum number of Registrable
Securities acquired by (or potentially acquirable by) the Investor pursuant to
the Stock Purchase Agreement, the Company shall be required to promptly file a
separate Registration Statement (utilizing Rule 462 promulgated under the 1933
Act, where applicable) relating to such Registrable Securities which then remain
unregistered. The provisions of this Agreement shall relate to any such
separate Registration Statement as if it were an amendment to the Registration
Statement.
2.3 Demand Registration. Subject to the limitations of Paragraph 2.2,
--------------------
at any time, the Investor may request the registration, once and only once,
under the 1933 Act of all or part of the Registrable Shares then outstanding (a
"Demand Registration"). Subject to the conditions of Paragraph 3 hereof, the
Company shall use its best efforts to file such Registration Statement under the
1933 Act as promptly as practicable after the date any such request is received
by the Company and to cause such Registration Statement to be declared
effective. The Company shall notify the Investor promptly when any such
Registration Statement has been declared effective. If more than 80 percent of
the Shares as of the date of the Stock Purchase Agreement have been registered
or sold, this provision shall expire.
2.4 Registration Statement Form. Registrations under Paragraph 2.2 and
---------------------------
Paragraph 2.3 hereof shall permit the disposition of such Registrable Securities
in accordance with the intended method or methods of disposition specified in
the Registration Statement; provided, however, such intended method of
disposition shall not include an underwritten offering of the Registrable
Securities.
2.5 Registration Expenses. The Company will pay all Registration
----------------------
Expenses in connection with any registration required by under Paragraphs 2.2
and Paragraph 2.3 hereof.
2.6 Effective Registration Statement. A registration requested
----------------------------------
pursuant to Paragraphs 2.2 and Paragraph 2.3 hereof shall not be deemed to have
been effected:
(a) Unless a Registration Statement with respect thereto has
become effective within the time period specified herein, provided that a
registration which does not become effective after the Company filed a
Registration Statement with respect thereto solely by reason of the refusal to
proceed of the Investor (other than a refusal to proceed based upon the advice
of counsel in the form of a letter signed by such counsel and provided to the
2
Company relating to a disclosure matter unrelated to the Investor) shall be
deemed to have been affected by the Company unless the Investor shall have
elected to pay all Registration Expenses in connection with such registration;
(b) If, after it has become effective, such registration becomes
subject to any stop order, injunction or other order or extraordinary
requirement of the SEC or other governmental agency or court for any reason; or
(c) If, after it has become effective, such registration ceases to
be effective for more than the allowable Black-Out Periods (as defined herein).
2.7 Plan of Distribution. The Company hereby agrees that the
----------------------
Registration Statement shall include a plan of distribution section reasonably
acceptable to the Investor; provided, however, such plan of distribution section
shall be modified by the Company so as to not provide for the disposition of the
Registrable Securities on the basis of an underwritten offering.
2.8 Liquidated Damages. If, after 180 days following the Closing Date
-------------------
pursuant to the Stock Purchase Agreement, in the event the Company does not
register the Registrable Securities pursuant to the requirements of Paragraph
2.2 hereof, or if the Registration Statement filed pursuant to Paragraph 2.2
hereof is not declared effective, or if the Registrable Securities are
registered pursuant to an effective Registration Statement and such Registration
Statement or other Registration Statement including the Registrable Securities
is not effective in the period within 180 days following the Closing Date
pursuant to the Stock Purchase Agreement, the Company shall, for each such day,
pay the Investor, as liquidated damages and not as a penalty, an amount equal to
24 percent of the Purchase Price per annum; and for any such day, such payment
shall be made no later than the first business day of the calendar month next
succeeding the month in which such day occurs.
The parties agree that the only damages payable for a violation of the
terms of this Agreement with respect to which liquidated damages are expressly
provided shall be such liquidated damages. Nothing shall preclude the Investor
from pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement.
The parties hereto agree that the liquidated damages provided for in this
Paragraph 2.8 constitute a reasonable estimate of the damages that may be
incurred by the Investor by reason of the failure of the Registration Statement
to be filed or declared effective in accordance with the provisions hereof.
The obligation of the Company terminates when the Investor no longer holds
more than 20 percent of the Registrable Securities.
ARTICLE III
INCIDENTAL REGISTRATION RIGHTS
3.1 Right to Include ("Piggy-Back") Registrable Securities. Provided
--------------------------------------------------------
that the Registrable Securities have not been registered, if at any time after
the date hereof but before the second anniversary of the date hereof, the
Company proposes to register any of its securities under the 1933 Act (other
than by a registration in connection with an acquisition in a manner which would
not permit registration of Registrable Securities for sale to the public, on
Form S-8, or any successor form thereto, on Form S-4, or any successor form
thereto and other than pursuant to Paragraph 2 hereof), on an underwritten basis
(either "best-efforts" or "firm-commitment"), then, the Company will each such
time give prompt written notice to the Investor of its intention to do so and of
the Investor's rights under this Paragraph 3.1. Upon the written request of the
Investor made within 10 days after the receipt of any such notice (which request
shall specify the Registrable Securities intended to be disposed of by the
Investor and the intended method of disposition thereof), the Company will,
subject to the terms of this Agreement, use its commercially reasonable best
efforts to effect the registration under the 1933 Act of the Registrable
Securities, to the extent requisite to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be registered, by inclusion of the Registrable Securities in the Registration
Statement which covers the securities which the Company proposes to register,
provided that if, at any time after written notice of its intention to register
any securities and prior to the effective date of the Registration Statement
filed in connection
3
with such registration, the Company shall determine for any reason either not to
register or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to the Investor and,
thereupon:
(a) In the case of a determination not to register, shall be
relieved of this obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
the Investor to request that such registration be effected as a registration
under Paragraph 2 hereof; and
(b) In the case of a determination to delay registering, shall be
permitted to delay registering any Registrable Securities, for the same period
as the delay in registering such other securities.
No registration effected under this Paragraph 3.1 shall relieve the Company
of its obligation to effect any registration upon request under Paragraph 2
hereof. The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Paragraph 3.1.
The right provided the Investor pursuant to this Paragraph shall be exercisable
at its sole discretion.
3.2 Priority in Incidental Registrations. If the managing underwriter
-------------------------------------
of the underwritten offering contemplated by this Paragraph 3 shall inform the
Company and the Investor by letter of its belief that the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering, then the Company will include in such registration, to
the extent of the number which the Company is so advised can be sold in such
offering:
(a) First, securities proposed by the Company to be sold for its
own account; and
(b) Second, Registrable Securities and securities of other selling
security holders requested to be included in such registration pro rata on the
basis of the number of shares of such securities so proposed to be sold and so
requested to be included; provided, however, the Investor shall have pro rata
rights of registration with all shares sought to be included by officers and
directors of the Company as well as holders of 10 percent or more of the Common
Stock.
ARTICLE IV
REGISTRATION PROCEDURES
4.1 Registration Procedures. If and whenever the Company is required
------------------------
to affect the registration of any Registrable Securities under the 1933 Act as
provided in Paragraph 2.2 hereof and, as applicable, Paragraph 2.3 hereof, the
Company shall, as expeditiously as possible:
(a) Prepare and file with the SEC the Registration Statement, or
amendments thereto, to effect such registration (including such audited
financial statements as may be required by the 1933 Act or the rules and
regulations promulgated thereunder) and thereafter use its commercially
reasonable best efforts to cause such Registration Statement to be declared
effective by the SEC, as soon as practicable, but in any event no later than the
Required Effectiveness Date (with respect to a registration pursuant to
Paragraph 2.2 hereof); provided, however, that before filing such Registration
Statement or any amendments thereto, the Company will furnish to the counsel
selected by the Investor, copies of all such documents proposed to be filed;
(b) With respect to any Registration Statement pursuant to
Paragraph 2.2 hereof or Paragraph 2.3 hereof, prepare and file with the SEC such
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities covered by such
Registration Statement until the earlier to occur of 18 months after the date of
this Agreement (subject to the right of the Company to suspend the effectiveness
thereof for not more than 10 consecutive Trading Days or an aggregate of 40
Trading Days during each year (each a "Black-Out Period") or such time as all of
the securities which are the subject of such Registration Statement cease to be
Registrable Securities;
4
(c) Furnish to the Investor such number of conformed copies of
such Registration Statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such Registration Statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the 1933 Act, in conformity with the requirements of the 1933 Act, and such
other documents, as the Investor and underwriter, if any, may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Securities owned by the Investor;
(d) Use its commercially reasonable best efforts to register or
qualify all Registrable Securities and other securities covered by such
Registration Statement under such other securities laws or blue sky laws as the
Investor shall reasonably request, to keep such registrations or qualifications
in effect for so long as such Registration Statement remains in effect, and take
any other action which may be reasonably necessary to enable the Investor to
consummate the disposition in such jurisdictions of the securities owned by the
Investor, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (d) be
obligated to be so qualified or to consent to general service of process in any
such jurisdiction;
(e) Use its commercially reasonable best efforts to cause all
Registrable Securities covered by such Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Investor to consummate the disposition of such
Registrable Securities;
(f) Furnish to the Investor a signed counterpart, addressed to the
Investor, and the underwriters, if any, of an opinion of counsel for the
Company, dated the effective date of such Registration Statement (or, if such
registration includes an underwritten public offering, an opinion dated the date
of the closing under the underwriting agreement), reasonably satisfactory in
form and substance to the Investor including that the prospectus and any
prospectus supplement forming a part of the Registration Statement does not
contain an untrue statement of a material fact or omits a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(g) Notify the Investor and its counsel promptly and confirm such
advice in writing promptly after the Company has knowledge thereof:
(i) When the Registration Statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
Registration Statement has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective;
(ii) Of any request by the SEC for amendments or supplements
to the Registration Statement or the prospectus or for additional information;
(iii) Of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings by any Person for that purpose; and
(iv) Of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale under the securities or blue sky laws of any jurisdiction or the initiation
or threat of any proceeding for such purpose;
(h) Notify each holder of Registrable Securities covered by such
Registration Statement, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material facts required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of the Investor promptly prepare
and furnish to the Investor a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
5
(i) Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(j) Otherwise use its commercially reasonable best efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least 12 months, but not more 18 eighteen
months, beginning with the first full calendar month after the effective date of
such Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
(k) Enter into such agreements and take such other actions as the
Investor shall reasonably request in writing (at the expense of the requesting
or benefiting Investor) in order to expedite or facilitate the disposition of
such Registrable Securities; and
(l) Use its commercially reasonable best efforts to list all
Registrable Securities covered by such Registration Statement on any securities
exchange on which any of the Registrable Securities are then listed.
The Company may require each holder of Registrable Securities as to which
any registration is being affected to furnish the Company such information
regarding such holder of Registrable Securities and the distribution of such
securities as the Company may from time to time reasonably request in writing.
4.2 Filings. The Company will not file any Registration Statement
-------
pursuant to Paragraph 2.2 or Paragraph 2.3 hereof, or amendment thereto or any
prospectus or any supplement thereto to which the Investor shall reasonably
object, provided that the Company may file such documents in a form required by
law or upon the advice of its counsel.
4.3 Representations and Warranties of the Company. The Company
--------------------------------------------------
represents and warrants to each holder of Registrable Securities that it has
obtained all necessary waivers, consents and authorizations necessary to execute
this Agreement and consummate the transactions contemplated hereby other than
such waivers, consents and/or authorizations specifically contemplated by the
Stock Purchase Agreement.
4.4 Discontinuance of Disposition of Registrable Securities. The
------------------------------------------------------------
Investor agrees that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subdivision (h) of Paragraph
4.1 hereof, the Investor will forthwith discontinue the Investor's disposition
of Registrable Securities pursuant to the Registration Statement relating to
such Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (h) of Paragraph
4.1 and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in the
Investor's possession of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
ARTICLE V
UNDERWRITTEN OFFERINGS
5.1 Incidental Underwritten Offerings. If the Company at any time
-----------------------------------
proposes to register any of its securities under the 1933 Act as contemplated by
Paragraph 3.1 hereof and such securities are to be distributed by or through one
or more underwriters, the Company will, if requested by the Investor as provided
in Paragraph 3.1 and subject to the provisions of Paragraph 3.2 hereof, use its
commercially reasonable best efforts to arrange for such underwriters to include
all the Registrable Securities to be offered and sold by the Investor among the
securities to be distributed by such underwriters.
5.2 Holdback Agreements. Subject to such other reasonable requirements
-------------------
as may be imposed by the underwriter as a condition of inclusion of the
Registrable Securities in the Registration Statement, the Investor agrees by
acquisition of the Registrable Securities, if so required by the managing
underwriter, not to sell, make any short sale of, loan, grant any option for the
purchase of, effect any public sale or distribution of or otherwise dispose of,
except as part of such underwritten registration, any equity securities of the
Company, during such reasonable period of time requested by the underwriter;
provided however:
6
(a) The secondary offering is intended to raise a minimum of
$8,000,000 on behalf of the Company and
(b) Such period shall not exceed the 90 day period commencing with
the completion of an underwritten offering.
The Company agrees and acknowledges that during any holdback period, the
Investor may sell, in the holdback period, Registrable Securities in the amount
of up to one percent per week of the shares of the Common Stock held by the
Investor as long as this Agreement remains effective.
5.3 Participation in Underwritten Offerings. The Investor may not
------------------------------------------
participate in any underwritten offering under Paragraph 3.1 hereof unless the
Investor:
(a) Agrees to sell such Person's securities on the basis provided
in any underwriting arrangements approved, subject to the terms and conditions
hereof, by the Investor; and
(b) Completes and executes all questionnaires, indemnities,
underwriting agreements and other documents (other than powers of attorney)
required under the terms of such underwriting arrangements.
Notwithstanding the foregoing, no underwriting agreement (or other
agreement in connection with such offering) shall require the Investor to make a
representation or warranty to or agreements with the Company or the underwriters
other than representations and warranties contained in a writing furnished by
the Investor expressly for use in the related Registration Statement or
representations, warranties or agreements regarding the Investor, the Investor
and the Investor's intended method of distribution and any other representation
required by law.
5.4 Preparation; Reasonable Investigation. In connection with the
---------------------------------------
preparation and filing of each Registration Statement under the 1933 Act
pursuant to this Agreement, the Company will give the Investor and its counsel
and accountants, the opportunity to participate in the preparation of such
Registration Statement, each prospectus included therein or filed with the SEC,
and each amendment thereof or supplement thereto, and will give each of them
such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of the Investor's and such underwriters' respective counsel,
to conduct a reasonable investigation within the meaning of the 1933 Act.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by the Company. In the event of any registration
--------------------------------
of any securities of the Company under the 1933 Act, the Company will, and
hereby does agree to indemnify and hold harmless the Investor, its directors and
officers, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls the
Investor or any such underwriter within the meaning of the 1933 Act against any
losses, claims, damages or liabilities, joint or several, to which the Investor
or any such director or officer or underwriter or controlling person may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such securities were registered under the 1933 Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, 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 the Company will reimburse the Investor
and each such director, officer, underwriter and controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability, (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written
7
information furnished to the Company by the Investor or underwriter stating that
it is for use in the preparation thereof and, provided further that the Company
shall not be liable to any Person who participates as an underwriter in the
offering or sale of Registrable Securities or to any other Person, if any, who
controls such underwriter within the meaning of the 1933 Act, in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such Person's failure to
send or give a copy of the final prospectus, as the same may be then
supplemented or amended, within the time required by the 1933 Act to the Person
asserting the existence of an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus or an amendment or supplement thereto. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Investor or any such director, officer, underwriter
or controlling person and shall survive the transfer of such securities by the
Investor.
6.2 Indemnification by the Investor. The Company may require, as a
--------------------------------
condition to including any Registrable Securities in any Registration Statement
filed pursuant to this Agreement, that the Company shall have received an
undertaking satisfactory to it from the Investor, to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Paragraph 6.1 hereof)
the Company, each director of the Company, each officer of the Company and each
other Person, if any, who controls the Company within the meaning of the 1933
Act, with respect to any statement or alleged statement in or omission or
alleged omission from such Registration Statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by the
Investor specifically stating that it is for use in the preparation of such
Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by the Investor.
6.3 Notices of Claims, Etc. Promptly after receipt by an indemnified
------------------------
party of notice of the commencement of any action or proceeding involving a
claim referred to in Paragraph 6.1 and Paragraph 6.2 hereof, such indemnified
party will, if claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under
Paragraph 6.1 and Paragraph 6.2 hereof, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which 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, or a covenant not to sue, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
6.4 Other Indemnification. Indemnification similar to that specified
----------------------
in Paragraph 6.1 and Paragraph 6.2 hereof (with appropriate modifications) shall
be given by the Company and the Investor (but only if and to the extent required
pursuant to the terms hereof) with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority, other than the 1933 Act.
6.5 Indemnification Payments. The indemnification required by
-------------------------
Paragraph 6.1 and Paragraph 6.2 hereof shall be made by periodic payments of the
amount thereof during the course of the investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred.
8
6.6 Contribution. If the indemnification provided for in Paragraph 6.1
------------
and Paragraph 6.2 hereof is unavailable to an indemnified party in respect of
any expense, loss, claim, damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such expense, loss, claim, damage or liability:
(a) In such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Investor or
underwriter, as the case may be, on the other from the distribution of the
Registrable Securities; or
(b) If the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (a) above but also the relative
fault of the Company on the one hand and of the Investor or underwriter, as the
case may be, on the other in connection with the statements or omissions which
resulted in such expense, loss, damage or liability, as well as any other
relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Investor or underwriter, as the case may be, on the other in connection with the
distribution of the Registrable Securities shall be deemed to be in the same
proportion as the total net proceeds received by the Company from the initial
sale of the Registrable Securities by the Company to the purchasers bear to the
gain, if any, realized by all selling holders participating in such offering or
the underwriting discounts and commissions received by the underwriter, as the
case may be. The relative fault of the Company on the one hand and of the
Investor or underwriter, as the case may be, on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission to state a material fact relates to information
supplied by the Company, by the Investor or by the underwriter and the parties'
relative intent, knowledge, access to information supplied by the Company, by
the Investor or by the underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, provided that the foregoing contribution agreement shall not inure to
the benefit of any indemnified party if indemnification would be unavailable to
such indemnified party by reason of the provisions contained hereof, and in no
event shall the obligation of any indemnifying party to contribute under this
Paragraph 6.6 exceed the amount that such indemnifying party would have been
obligated to pay by way of indemnification if the indemnification provided for
hereunder had been available under the circumstances.
The Company and the Investor agree that it would not be just and equitable
if contribution pursuant to this Paragraph 6.6 were determined by pro rata
allocation (even if the Investor and any underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
herein, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Paragraph 6.6, the Investor and an
underwriter shall not be required to contribute any amount in excess of the
amount by which (i) in the case of any the Investor, the net proceeds received
by the Investor from the sale of Registrable Securities or (ii) in the case of
an underwriter, the total price at which the Registrable Securities purchased by
it and distributed to the public were offered to the public exceeds, in any such
case, the amount of any damages that the Investor or underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
ARTICLE VII
RULE 144
7.1 Rule 144. The Company shall timely file the reports required to be
--------
filed by it under the 1933 Act and the 1934 Act (including but not limited to
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the SEC under the 1933 Act) and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, will, upon the request of the Investor, make
publicly available other information) and will take such further action as the
Investor may reasonably request,
9
all to the extent required from time to time to enable the Investor to sell
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (a) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of the Investor, the
Company will deliver to the Investor a written statement as to whether it has
complied with the requirements of this Paragraph 7.1.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments and Waivers. This Agreement may be amended and the
------------------------
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of the sum of the 51 percent or more of the shares of (a) Registrable
Securities issued at such time, plus (b) Registrable Securities issuable upon
exercise or conversion of the Securities then constituting derivative securities
(if such Securities were not fully exchanged or converted in full as of the date
such consent if sought). Each holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any consent authorized by this
Paragraph 8.1, whether or not such Registrable Securities shall have been marked
to indicate such consent.
8.2 Nominees for Beneficial Owners. In the event that any Registrable
-------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number of percentage of shares of Registrable Securities
held by a holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership or such Registrable Securities.
8.3 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been given (a) on the date they are
delivered if delivered in person; (b) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (c) on the date delivered by an overnight courier service; or (d)
on the third business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid, if to the Company
addressed to Mr. Steven D. Rosenthal at 8513 Rochester Avenue, Rancho Cucamonga,
California 91730, with a copy to Norman T. Reynolds, Esq. at 815 Walker Street,
Suite 1250, Houston, Texas 77002, and if to the Investor addressed to Mr. Andrew
Barron Worden 730 Fifth Avenue, 9th Floor, New York, New York 10019. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
8.4 Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto. In addition, and whether
or not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto other than the Company
shall also be for the benefit of and enforceable by any subsequent holder of any
Registrable Securities. The Investor agrees, by accepting any portion of the
Registrable Securities after the date hereof, to the provisions of this
Agreement including, without limitation, appointment of the Investor's
Representative to act on behalf of the Investor pursuant to the terms hereof
which such actions shall be made in the good faith discretion of the Investor's
Representative and be binding on all persons for all purposes.
8.5 Descriptive Headings. The descriptive headings of the several
---------------------
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
8.6 Law Governing; Jurisdiction. This Agreement shall be governed by
-----------------------------
and construed in accordance with the laws of the State of California, without
regard to any conflicts of laws provisions thereof. Each party hereby
irrevocably submits to the personal jurisdiction of the United States District
Court for the Central District of California, as well as of the Superior Courts
of the State of California in Riverside County, California over any suit, action
or proceeding arising out of or relating to this Agreement. Each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
10
8.7 Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the Company and each other party hereto relating to the
subject matter hereof and supercedes all prior agreements and understandings
relating to such subject matter.
8.8 Severability. If any provision of this Agreement, or the
------------
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
8.9 Binding Effect. All the terms and provisions of this Agreement
---------------
whether so expressed or not, shall be binding upon, inure to the benefit of, and
be enforceable by the parties and their respective administrators, executors,
legal representatives, heirs, successors and assignees.
8.10 Preparation of Agreement. This Agreement shall not be construed
--------------------------
more strongly against any party regardless of who is responsible for its
preparation. The parties acknowledge each contributed and is equally
responsible for its preparation.
8.11 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
-----------------------------------------------------
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty, covenant or agreement herein, nor
shall nay single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
8.12 Controlling Agreement. In the event of any conflict between the
----------------------
terms of this Agreement or the Stock Purchase Agreement, the terms of the Stock
Purchase Agreement shall control.
8.13 Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement. A facsimile transmission
of this signed Agreement shall be legal and binding on all parties hereto.
IN WITNESS WHEREOF, the Investor and the Company have as of the date first
written above executed this Agreement.
CYBER PUBLIC RELATIONS, INC.
By
------------------------------------------------
Steven D. Rosenthal, Chief Executive Officer
BARRON PARTNERS LP
By
------------------------------------------------
Andrew Barron Worden, President, Barron Capital
Advisors LLC, General Partner
11