EXHIBIT 10.4
CONSULTING AGREEMENT
This is a Consulting Agreement ("Agreement") between SAFE LANE SYSTEMS,
INC., a Colorado corporation with offices in Denver, Colorado, ("SLS") on the
one hand, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual ("Consultant") on the other hand.
SLS and Consultant may be referred to herein separately as "Party" and jointly
as "Parties." This Agreement shall be effective as of the date of the last Party
to sign ("Effective Date").
1. BASIC AGREEMENT
1.1 SERVICES. Consultant agrees to provide the services to SLS described on
Schedule A hereto ("Services"), for the compensation set forth on Schedules A
and B. If the Parties later enter into additional schedules, and any such
schedules shall be deemed to be incorporated into and part of this Agreement.
1.2 COMPENSATION. The fees specified on the Schedules hereto will be
Consultant's sole compensation for the Services described thereon. Consultant is
to invoice SLS for work done by emailing invoices to the SLS Contact person
listed on the applicable Schedule or otherwise identified as the contact person
by SLS. SLS will pay all invoices within 30 days of receipt of each invoice.
1.3 ADDITIONAL SERVICES. If SLS asks Consultant to perform services that
are not specifically listed herein and that are above and beyond that which is
reasonable and customary under the circumstances, Consultant will submit a
written change order to SLS describing (i) the additional services to be
performed; and (ii) the proposed additional fees, if any, associated with such
services. Consultant will not perform or receive payments for any service not
authorized by SLS in an approved change order.
2. WORKING RELATIONSHIP
2.1 METHOD OF WORK. Consultant will perform the Services in a timely and
professional manner consistent with industry standards. Consultant will have
sole discretion over, and sole responsibility for, the planning, method, means,
sequencing, time, and place of the work he performs in connection with the
Services. Consultant will provide his own equipment, tools, and materials, if
any are necessary.
2.2 ACCESS TO SLS'S PROPERTY. If necessary to perform the Services, SLS
will make its facilities and equipment available to Consultant in accordance
with SLS's access, hours of operation, and security policies, unless otherwise
agreed given the nature of the Services. SLS will retain sole ownership of all
documents, records, equipment, and other physical or intellectual property that
it makes available to Consultant. At SLS's request, and upon termination of this
Agreement, Consultant will promptly return to SLS any of this property in
Consultant's possession.
2.3 OWNERSHIP OF WORK PRODUCT. Consultant and SLS intend that SLS will have
full and exclusive ownership of and all right, title, and interest in and to any
work product, including, without limitation, the deliverables set forth on
Schedule A and to all research, analyses, presentations and reports prepared by
Consultant and any intellectual property (including, without limitation, any
trade secret, copyright, patent or trademark) that Consultant creates or helps
create in performing the Services under this Agreement. Consultant will assist
SLS in obtaining and enforcing these rights in the work product. Notwithstanding
the foregoing, SLS acknowledges that, with its prior written consent, Consultant
may use certain third party materials in connection with its performance of the
Services, and that all intellectual property in any such third party materials
incorporated into any work product will remain with the relevant third party
proprietors.
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2.4 CONFIDENTIALITY. Consultant will use Confidential Information (defined
below) only in connection with the Services under this Agreement and will keep
the same confidential, using at least the same degree of care as Consultant uses
to prevent the unauthorized use or disclosure of his own confidential
information, but in no case less than a reasonable degree of care. "Confidential
Information" means information from or relating to SLS which is furnished by SLS
to Consultant during the course of providing the Services, and does not include
information which: (i) is or becomes generally available to the public other
than as a result of a disclosure by Consultant or its agent or a party acting on
his behalf; (ii) was known by Consultant prior to its being furnished to
Consultant by SLS; or (iii) is or becomes available to Consultant on a
non-confidential basis from a source other than SLS. All Confidential
Information furnished by SLS under this Agreement is and will remain the
property of SLS. In the event that Consultant is required by operation of law,
rule, regulation or legal process or any governmental agency, to disclose any
Confidential Information, Consultant will promptly notify SLS so that Consultant
may seek an appropriate protective order, and Consultant will provide
commercially reasonable cooperation with any such efforts. If in the absence, or
prior to the delivery, of such protective order Consultant is required to
disclose any such Confidential Information, Consultant may make such disclosure
without liability under this Agreement.
2.5 RELATIONSHIP. Consultant is and will be an independent contractor.
Nothing in this Agreement creates an employment, partnership, joint venture,
fiduciary, or similar relationship between Consultant and SLS for any purpose.
SLS understands that Consultant is entering into this Agreement on his own
behalf and not on behalf of any other person or entity, and that his obligations
hereunder are his and his alone. Consultant will not be entitled to or eligible
for any benefits that SLS makes available to its employees, including, without
limitation, coverage under any SLS medical, dental, liability, automobile or
other insurance policies. Consultant waives any rights or claims to those
benefits.
2.6 AVAILABILITY OF SLS CONTENT. SLS agrees to provide any data, analysis,
text, photos, graphics, recordings, software, documentation, images, or other
content or materials of any kind or nature made necessary in order for
Consultant to provide the Services.
3. INDEMNIFICATION
3.1 INDEMNIFICATION. The parties will each defend, indemnify and hold the
other party and his or its directors, officers, employees, agents, and assigns
(collectively, the "Indemnified Parties") harmless against all third-party
claims, liabilities, losses, damages, and expenses which the Indemnified Parties
may suffer and which arise directly or indirectly from (i) the other party's
performance or breach under this Agreement, or (ii) an assertion that the other
party infringed upon third-party intellectual property rights.
3.2 LIMITATION OF REMEDIES AND DAMAGES. THE LIABILITY OF CONSULTANT TO SLS
ARISING HEREUNDER WILL BE LIMITED TO FEES PAID BY SLS HEREUNDER. CONSULTANT
SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES,
INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF BUSINESS, PROFITS, BUSINESS
INTERRUPTION, DOWNTIME, OR COST OF COVER, WHETHER FORESEEABLE OR NOT, AND
WHETHER ARISING IN CONTRACT, TORT, OR NEGLIGENCE, EVEN IF A REPRESENTATIVE OF
CONSULTANT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE
LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF
ANY LIMITED REMEDY. THE FOREGOING LIMITATIONS AND EXCLUSIONS ARE AN ESSENTIAL
PART OF THE CONSIDERATION UNDER THE TERMS OF THIS AGREEMENT, AND SHALL TAKE
EFFECT TO THE FULLEST EXTENT PERMITTED BY LAW.
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4. DISCLAIMER OF WARRANTIES. EXCEPT FOR THE WARRANTIES EXPLICITLY SET FORTH IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY
KIND, WHETHER ORAL OR WRITTEN, WHETHER EXPRESS, IMPLIED, OR ARISING BY STATUTE,
CUSTOM, COURSE OF DEALING OR TRADE USAGE, WITH RESPECT TO THE SUBJECT MATTER
HEREOF IN CONNECTION WITH THIS AGREEMENT. EACH PARTY SPECIFICALLY DISCLAIMS ANY
AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, SATISFACTORY QUALITY,
ACCEPTABLE QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
COMPLIANCE WITH DESCRIPTION AND NON-INFRINGEMENT. NOTHING IN THIS SECTION 4
SHALL BE CONSTRUED TO RELIEVE CONSULTANT FROM ITS OBLIGATIONS SET FORTH
ELSEWHERE IN THIS AGREEMENT OR IN THE SCHEDULE(S) INCORPORATED HEREIN.
5. TERM, PAYMENT, AND TERMINATION
5.1 TERM. This Agreement shall commence on the Commencement Date and shall
terminate on the Completion Date listed on Schedule A.
5.2 TERMINATION. Notwithstanding Section 5.1 above: Either party may
immediately terminate this Agreement upon a material breach by the other party
that has not been cured to the terminating party's satisfaction within 30 days
following written notice of said breach; Consultant may terminate this Agreement
on 30 days written notice for SLS' uncured failure to meet its payment
obligations hereunder within 30 days of receiving written notice of such failure
from Consultant.
5.3 CONSEQUENCES OF TERMINATION. If this Agreement is terminated before all
the Services described on Schedule A have been fully performed by Consultant,
SLS will pay for work completed as of the date of such termination. SLS will pay
undisputed fees within 30 days after the later of receiving Consultant's invoice
or the effective date of termination. Upon termination of this Agreement,
Consultant will promptly return all SLS property. The provisions of Sections 2,
3, 4, 5 and 6 will remain effective after termination. All of the Parties'
rights, powers, and remedies under this Agreement are cumulative and not
alternative and will be in addition to all rights, powers, and remedies given to
the Parties at law or in equity. The exercise of one or more of these rights or
remedies will not impair the Parties' right to exercise any other right or
remedy.
6. GENERAL PROVISIONS
6.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with any
agreed-upon schedules, is the entire agreement between the Parties and
supersedes prior or contemporaneous written and oral agreements, negotiations,
correspondence, course of dealing and communications between the Parties
relating to the same subject matter. This Agreement may be amended only as
stated in a writing signed by both Parties that recites that it is an amendment
to this Agreement. The schedule(s) may be amended only as stated in a writing
signed by both Parties that recites that it is an addendum thereto.
6.2 SEVERABILITY. If any provision in this Agreement is held invalid or
unenforceable, the other provisions will remain enforceable, and the invalid or
unenforceable provision will be considered modified so that it is valid and
enforceable to the maximum extent permitted by law.
6.3 ASSIGNMENT AND SUCCESSORS.. SLS may not make any assignment of this
Agreement without Consultant's written consent, which consent shall not be
unreasonably withheld. Consultant will not make any assignment of this Agreement
without the consent of Superior's or Superior's Successor's written consent,
which consent shall not be unreasonably withheld. This Agreement shall be
binding upon and inure to the benefit of the successors and permitted assignees
of the parties hereto, and the non-assigning party shall be considered a
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third-party beneficiary of any agreement between the assigning party and the
assignee.
6.4 WAIVER. Any waiver under this Agreement must be in writing and signed
by the party granting the waiver. Waiver of any breach or provision of this
Agreement will not be considered a waiver of any later breach or of the right to
enforce any provision of this Agreement.
6.5 NO THIRD PARTY BENEFICIARIES. This Agreement is for the exclusive
benefit of Consultant and SLS and not for the benefit of any third party
including, without limitation, any employee, affiliate, or agent of the parties.
6.6 NOTICES. Notices and consents under this Agreement must be in writing
and delivered by email to the designated contact persons identified on the
schedule(s) or otherwise by the parties.
6.7 GOVERNING LAW. This Agreement is governed by California law.
6.8 ARBITRATION. The parties agree that any and all disputes relating to
this Agreement will be resolved by binding arbitration before and under the
rules of the American Arbitration Association. Such arbitration will be
conducted in Orange County, California. Each party will bear his or its own fees
and costs relating to such arbitration.
6.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will be
taken together and deemed to be one instrument. Transmission by fax or PDF of
executed counterparts constitutes effective delivery.
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Accepted and Agreed:
Dated: July 14, 2014
Signed by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, on his own behalf
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Dated: July 7, ▇▇▇▇
▇▇▇▇ ▇▇▇▇ SYSTEMS, INC.
Signed by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, Ceo
President
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SCHEDULE A TO CONSULTING AGREEMENT
This Schedule sets forth additional terms of the Consulting Agreement. The terms
of this Schedule are deemed incorporated in full into the Consulting Agreement.
NAME OF CONSULTANT: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
COMMENCEMENT DATE: JULY 7, 2014
COMPLETION DATE: OCTOBER 1, 2014
DESCRIPTION OF SERVICES, INCLUDING ACTIVITIES, EXPECTED WORK PRODUCT, AND
TIMETABLE:
SERVICES
Develop a strategic plan for SLS ("Strategic Plan")
o Create a suggested company tactical execution plan leveraging
Consultant's knowledge, expertise, relationships and experience.
o Introduce and help open new business relationships to accelerate
growth and drive new product sales revenues.
o| Help in the planning process to best position Company for long-term
success in product development, manufacturing, marketing, sales and
customer support.
The Strategic Plan shall be comprised of the following elements:
o Sales/Revenue initiatives
o Design a proposed sales organization structure
(internal/external)
o Design a Sales Compensation model/structure
o Design a 36 month model with revenue growth planning
o Design an Indirect Channel plan including illustration of "steps"
from company manufacturing to end user delivery
o Create Channel Sales wholesale recommendations (define)
o Develop a Written Plan for Strategic /Wholesale Channels and Go
to Market relationships
o Marketing / Marketing Communications:
o Provide market analysis (market size and top 3 vertical markets
for Kone General and Spring Cone product lines)
o Present Competitive Analysis: Kone General verses researched
current available solutions
o Develop suggested product Pricing Model
o Develop suggestions for Corporate Brand guidelines (to implement
with creative agencies)
o Develop suggestions for corporate marketing use standards (to
implement with creative agencies)
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o Develop suggestions for On-line and Digital Media Messaging:
include social media, useful data share strategies, traditional
electronic direct response marketing.
o Develop suggestions for attending/joining industry associations,
industry sponsored events, industry conferences, strategic
customer acquisition, strategic marketing.
o Develop suggestions for a communications calendar: Corporate
relations, IR, PR, and Marketing Communications Is he qualified
to do this?
o Business Operations:
o Introduce manufacturing companies who could best serve Company's
Kone General and Spring Cone products. Focus introductions on
Quality, Cost and Scale Done why?
o Develop suggestions for companies that can help with product
fulfillment services including boxing, labeling, shipping, and
inventory
o Respond to Company's requests when at all possible during
calls/meetings when evaluating manufacturers and other introduced
possible partners
o Develop suggestions whenever possible for areas of "value
engineering" and/or creating competitive differentiation/barriers
to enter
o Suggest Customer Service Best Practices by researching industry
leaders and market vertical expectations (examples: Returns,
Warranty, RMA.) Qualified?
DELIVERABLES
Consultant will provide SLS with two documents reflecting the above-described
services, and SLS will give Consultant feedback on draft document(s) from date
hereof, as follows:
30 days: Consultant to deliver Draft of Strategic Plan to SLS
60 days: SLS to provide Consultant with feedback on Draft of Strategic Plan
60-90 days: Ongoing feedback and discussion on any additional drafts of
Strategic Plan
90 days: Consultant to deliver final copy of Strategic Plan
Consultant will prepare the Strategic Plan consistent with the above-described
parameters and requirements, but Consultant in his sole discretion will
determine the structure, scope, format, and content of the Strategic Plan. The
parties agree and acknowledge that more than one draft and exchange of feedback
may be necessary. The parties may agree in writing to changes in the above
dates.
FEES
Consultant's compensation for the Services shall be comprised of two elements:
(1) to be paid as follows:
$5,000 due each Month
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Consultant will invoice SLS for each of these payments.
(2) WARRANTS: As set forth in Schedule B to this Agreement.
Accepted and Agreed:
Dated: July 7, 2014
Signed by _________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, on his own behalf
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dated: July 7, ▇▇▇▇
▇▇▇▇ ▇▇▇▇ SYSTEMS, INC.
Signed by /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, CEO
President
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SCHEDULE B TO CONSULTING AGREEMENT
WARRANT AGREEMENT
This Schedule sets forth additional terms of the Consulting Agreement. The terms
of this Schedule are deemed incorporated in full into the Consulting Agreement.
WARRANT AGREEMENT
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED
UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY,
SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE STOCK
COMPANY: SAFE LANE SYSTEMS, INC. STOCK SYMBOL TO BE DETERMINED.
NUMBER OF SHARES: 3,000,000 (SEE SECTION 1.1 BELOW: MILESTONE BASED GRANT.)
TYPE/SERIES OF STOCK: COMMON STOCK
WARRANT PRICE: $0.20 PER SHARE
ISSUE DATE: JULY 14, 2014
EXPIRATION DATE: January 25, 2023
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇ ("HOLDER") is entitled to purchase the number of fully paid and
non-assessable shares (the "SHARES") of the above-stated Type/Series of Stock
(the "CLASS") of the above-named company (the "COMPANY") at the above-stated
Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of
this Warrant, subject to the provisions and upon the terms and conditions set
forth in this Warrant. In the event that the name of the Company and/or the
stock symbol for the company
SECTION 1. EXERCISE.
1.1 MILESTONE BASED GRANT.
Holder shall be granted THE MILLION (3,000,000) Warrants per this agreement
subject to achieving the following milestones;
ONE MILLION (1,000,000) Warrants at execution if this consulting agreement
ONE MILLION (1,000,000) Warrants upon the sale of the 250th Kone General
cone distribution product or equivalent revenue.
ONE MILLION (1,000,000) Warrants upon the sale of the 500th Kone General
cone distribution product or equivalent revenue.
EXAMPLE: If the Kone General product sells for $2,000, then target revenue goal
would be $500,000 whether selling Kone General or other products the company
offers. This example would meet the 250 unit or equivalent revenue milestone.
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1.2 METHOD OF EXERCISE. Holder may at any time and from time to time
exercise this Warrant, in whole or in part, by delivering to the Company the
original of this Warrant together with a duly executed Notice of Exercise in
substantially the form attached hereto as Appendix 1 and, unless Holder is
exercising this Warrant pursuant to a cashless exercise set forth in Section
1.3, a check, wire transfer of same-day funds (to an account designated by the
Company), or other form of payment acceptable to the Company for the aggregate
Warrant Price for the Shares being purchased.
1.2 CASHLESS EXERCISE. On any exercise of this Warrant, in lieu of payment
of the aggregate Warrant Price in the manner as specified in Section 1.1 above,
but otherwise in accordance with the requirements of Section 1.1, Holder may
elect to receive Shares equal to the value of this Warrant, or portion hereof as
to which this Warrant is being exercised. Thereupon, the Company shall issue to
the Holder such number of fully paid and non-assessable Shares as are computed
using the following formula:
X = Y(A-B)/A
where:
X = the number of Shares to be issued to the Holder;
Y = the number of Shares with respect to which
this Warrant is being exercised (inclusive
of the Shares surrendered to the Company in
payment of the aggregate Warrant Price);
A = the Fair Market Value (as determined pursuant to
Section 1.3 below) of one Share; and
B = the Warrant Price.
1.3 FAIR MARKET VALUE. If the Company's common stock is then traded or
quoted on a nationally recognized securities exchange, inter-dealer quotation
system or over-the-counter market (a "TRADING MARKET") and the Class is common
stock, the fair market value of a Share shall be the closing price or last sale
price of a share of common stock reported for the Business Day immediately
before the date on which Holder delivers this Warrant together with its Notice
of Exercise to the Company. If the Company's common stock is then traded in a
Trading Market and the Class is a series of the Company's convertible preferred
stock, the fair market value of a Share shall be the closing price or last sale
price of a share of the Company's common stock reported for the Business Day
immediately before the date on which Holder delivers this Warrant together with
its Notice of Exercise to the Company multiplied by the number of shares of the
Company's common stock into which a Share is then convertible. If the Company's
common stock is not traded in a Trading Market, the Board of Directors of the
Company shall determine the fair market value of a Share in its reasonable good
faith judgment.
1.4 DELIVERY OF CERTIFICATE AND NEW WARRANT. Within a reasonable time after
Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2
above, the Company shall deliver to Holder a certificate representing the Shares
issued to Holder upon such exercise and, if this Warrant has not been fully
exercised and has not expired, a new warrant of like tenor representing the
Shares not so acquired.
1.5 REPLACEMENT OF WARRANT. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form, substance and amount to the Company
or, in the case of mutilation, on surrender of this Warrant to the Company for
cancellation, the Company shall, within a reasonable time, execute and deliver
to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.
1.6 TREATMENT OF WARRANT UPON ACQUISITION OF COMPANY.
(a) ACQUISITION. For the purpose of this Warrant, "ACQUISITION" means
any transaction or series of related transactions involving: (i) the sale,
lease, exclusive license, or other disposition of all or substantially all of
the assets of the Company; (ii) any merger or consolidation of the Company into
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or with another person or entity (other than a merger or consolidation effected
exclusively to change the Company's domicile), or any other corporate
reorganization, in which the stockholders of the Company in their capacity as
such immediately prior to such merger, consolidation or reorganization, own less
than a majority of the Company's (or the surviving or successor entity's)
outstanding voting power immediately after such merger, consolidation or
reorganization; or (iii) any sale or other transfer by the stockholders of the
Company to a person or "group" (as defined under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT")) of shares representing at least a
majority of the Company's then-total outstanding combined voting power.
(b) TREATMENT OF WARRANT AT ACQUISITION. In the event of an
Acquisition in which the consideration to be received by the Company's
stockholders consists solely of cash, solely of Marketable Securities or a
combination of cash and Marketable Securities (a "CASH/PUBLIC ACQUISITION"),
either (i) Holder shall exercise this Warrant pursuant to Section 1.1 and/or 1.2
and such exercise will be deemed effective immediately prior to and contingent
upon the consummation of such Acquisition or (ii) if Holder elects not to
exercise the Warrant, this Warrant will expire immediately prior to the
consummation of such Acquisition.
(c) The Company shall provide Holder with written notice of its
request relating to the Cash/Public Acquisition (together with such reasonable
information as Holder may reasonably require regarding the treatment of this
Warrant in connection with such contemplated Cash/Public Acquisition giving rise
to such notice), which is to be delivered to Holder not less than seven (7)
Business Days prior to the closing of the proposed Cash/Public Acquisition. In
the event the Company does not provide such notice, then if, immediately prior
to the Cash/Public Acquisition, the fair market value of one Share (or other
security issuable upon the exercise hereof) as determined in accordance with
Section 1.3 above would be greater than the Warrant Price in effect on such
date, then this Warrant shall automatically be deemed on and as of such date to
be exercised pursuant to Section 1.2 above as to all Shares (or such other
securities) for which it shall not previously have been exercised, and the
Company shall promptly notify the Holder of the number of Shares (or such other
securities) issued upon such exercise to the Holder and Holder shall be deemed
to have restated each of the representations and warranties in Section 4 of the
Warrant as the date thereof.
(d) Upon the closing of any Acquisition other than a Cash/Public
Acquisition defined above, the acquiring, surviving or successor entity shall
assume the obligations of this Warrant, and this Warrant shall thereafter be
exercisable for the same securities and/or other property as would have been
paid for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on and as of the closing of such
Acquisition, subject to further adjustment from time to time in accordance with
the provisions of this Warrant.
(e) As used in this Warrant, "MARKETABLE SECURITIES" means securities
meeting all of the following requirements: (i) the issuer thereof is then
subject to the reporting requirements of Section 13 or Section 15(d) of the
Exchange Act, and is then current in its filing of all required reports and
other information under the Act and the Exchange Act; (ii) the class and series
of shares or other security of the issuer that would be received by Holder in
connection with the Acquisition were Holder to exercise this Warrant on or prior
to the closing thereof is then traded in Trading Market, and (iii) following the
closing of such Acquisition, Holder would not be restricted from publicly
re-selling all of the issuer's shares and/or other securities that would be
received by Holder in such Acquisition were Holder to exercise or convert this
Warrant in full on or prior to the closing of such Acquisition, except to the
extent that any such restriction (x) arises solely under federal or state
securities laws, rules or regulations, and (y) does not extend beyond six (6)
months from the closing of such Acquisition.
SECTION 2. ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.
2.1 STOCK DIVIDENDS, SPLITS, ETC. If the Company declares or pays a
dividend or distribution on the outstanding shares of the Class payable in
common stock or other securities or property (other than cash), then upon
exercise of this Warrant, for each Share acquired, Holder shall receive, without
additional cost to Holder, the total number and kind of securities and property
which Holder would have received had Holder owned the Shares of record as of the
date the dividend or distribution occurred. If the Company subdivides the
outstanding shares of the Class by reclassification or otherwise into a greater
number of shares, the number of Shares purchasable hereunder shall be
proportionately increased and the Warrant Price shall be proportionately
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decreased. If the outstanding shares of the Class are combined or consolidated,
by reclassification or otherwise, into a lesser number of shares, the Warrant
Price shall be proportionately increased and the number of Shares shall be
proportionately decreased.
2.2 RECLASSIFICATION, EXCHANGE, COMBINATIONS OR SUBSTITUTION. Upon any
event whereby all of the outstanding shares of the Class are reclassified,
exchanged, combined, substituted, or replaced for, into, with or by Company
securities of a different class and/or series, then from and after the
consummation of such event, this Warrant will be exercisable for the number,
class and series of Company securities that Holder would have received had the
Shares been outstanding on and as of the consummation of such event, and subject
to further adjustment thereafter from time to time in accordance with the
provisions of this Warrant. The provisions of this Section 2.2 shall similarly
apply to successive reclassifications, exchanges, combinations substitutions,
replacements or other similar events.
2.3 CONVERSION OF PREFERRED STOCK. If the Class is a class and series of
the Company's convertible preferred stock, in the event that all outstanding
shares of the Class are converted, automatically or by action of the holders
thereof, into common stock pursuant to the provisions of the Company's
Certificate of Incorporation, as such may be amended from time to time (the
"CERTIFICATE OF INCORPORATION") including, without limitation, in connection
with the Company's initial, underwritten public offering and sale of its common
stock pursuant to an effective registration statement under the Act (the "IPO"),
then from and after the date on which all outstanding shares of the Class have
been so converted, this Warrant shall be exercisable for such number of shares
of common stock into which the Shares would have been converted had the Shares
been outstanding on the date of such conversion, and the Warrant Price shall
equal the Warrant Price in effect as of immediately prior to such conversion
divided by the number of shares of common stock into which one Share would have
been converted, all subject to further adjustment thereafter from time to time
in accordance with the provisions of this Warrant.
2.4 ADJUSTMENTS FOR DILUTING ISSUANCES. Without duplication of any
adjustment otherwise provided for in this Section 2, the number of shares of
common stock issuable upon conversion of the Shares shall be subject to
anti-dilution adjustment from time to time in the manner set forth in the
Company's Certificate of Incorporation as if the Shares were issued and
outstanding on and as of the date of any such required adjustment.
2.6 NOTICE/CERTIFICATE AS TO ADJUSTMENTS. Upon each adjustment of the
Warrant Price, Class and/or number of Shares, the Company, at the Company's
expense, shall notify Holder in writing within a reasonable time setting forth
the adjustments to the Warrant Price, Class and/or number of Shares and facts
upon which such adjustment is based. The Company shall, upon written request
from Holder, furnish Holder with a certificate of its Chief Financial Officer,
including computations of such adjustment and the Warrant Price, Class and
number of Shares in effect upon the date of such adjustment.
SECTION 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to,
and agrees with, the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this
Warrant is not greater than the price per share at which shares of the Class
were last sold and issued prior to the Issue Date hereof in an arms-length
transaction in which at least $500,000 of such shares were sold.
(b) All Shares which may be issued upon the exercise of this Warrant,
and all securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and non-assessable, and
free of any liens and encumbrances except for restrictions on transfer provided
for herein or under applicable federal and state securities laws. The Company
covenants that it shall at all times cause to be reserved and kept available out
of its authorized and unissued capital stock such number of shares of the Class,
common stock and other securities as will be sufficient to permit the exercise
in full of this Warrant and the conversion of the Shares into common stock or
such other securities.
3.2 NOTICE OF CERTAIN EVENTS. If the Company proposes at any time to:
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(a) declare any dividend or distribution upon the outstanding shares
of the Class or common stock, whether in cash, property, stock, or other
securities and whether or not a regular cash dividend;
(b) offer for subscription or sale pro rata to the holders of the
outstanding shares of the Class any additional shares of any class or series of
the Company's stock (other than pursuant to contractual pre-emptive rights);
(c) effect any reclassification, exchange, combination, substitution,
reorganization or recapitalization of the outstanding shares of the Class;
(d) effect an Acquisition or to liquidate, dissolve or wind up; or
then, in connection with each such event, the Company shall give Holder:
(1) at least seven (7) Business Days prior written notice of the
date on which a record will be taken for such dividend, distribution,
or subscription rights (and specifying the date on which the holders
of outstanding shares of the Class will be entitled thereto) or for
determining rights to vote, if any, in respect of the matters referred
to in (a) and (b) above;
(2) in the case of the matters referred to in (c) and (d) above
at least seven (7) Business Days prior written notice of the date when
the same will take place (and specifying the date on which the holders
of outstanding shares of the Class will be entitled to exchange their
shares for the securities or other property deliverable upon the
occurrence of such event); and
SECTION 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.
The Holder represents and warrants to the Company as follows:
4.1 PURCHASE FOR OWN ACCOUNT. This Warrant and the securities to be
acquired upon exercise of this Warrant by Holder are being acquired for
investment for Holder's account, not as a nominee or agent, and not with a view
to the public resale or distribution within the meaning of the Act. Holder also
represents that it has not been formed for the specific purpose of acquiring
this Warrant or the Shares.
4.2 DISCLOSURE OF INFORMATION. Holder is aware of the Company's business
affairs and financial condition and has received or has had full access to all
the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities. Holder further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify any
information furnished to Holder or to which Holder has access.
4.3 INVESTMENT EXPERIENCE. Holder understands that the purchase of this
Warrant and its underlying securities involves substantial risk. Holder has
experience as an investor in securities of companies in the development stage
and acknowledges that Holder can bear the economic risk of such Holder's
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business relationship
with the Company and certain of its officers, directors or controlling persons
of a nature and duration that enables Holder to be aware of the character,
business acumen and financial circumstances of such persons.
4.4 ACCREDITED INVESTOR STATUS. Holder is an "accredited investor" within
the meaning of Regulation D promulgated under the Act.
4.5 THE ACT. Holder understands that this Warrant and the Shares issuable
upon exercise hereof have not been registered under the Act in reliance upon a
specific exemption therefrom, which exemption depends upon, among other things,
the bona fide nature of the Holder's investment intent as expressed herein.
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Holder understands that this Warrant and the Shares issued upon any exercise
hereof must be held indefinitely unless subsequently registered under the Act
and qualified under applicable state securities laws, or unless exemption from
such registration and qualification are otherwise available. Holder is aware of
the provisions of Rule 144 promulgated under the Act.
4.6 NO VOTING RIGHTS. Holder, as a Holder of this Warrant, will not have
any voting rights until the exercise of this Warrant.
SECTION 5. MISCELLANEOUS.
5.1 TERM AND AUTOMATIC CASHLESS EXERCISE UPON EXPIRATION.
(a) TERM. Subject to the provisions of Section 1.6 above, this Warrant
is exercisable in whole or in part at any time and from time to time on or
before 6:00 PM, Pacific time, on the Expiration Date and shall be void
thereafter.
(b) AUTOMATIC CASHLESS EXERCISE UPON EXPIRATION. In the event that,
upon the Expiration Date, the fair market value of one Share (or other security
issuable upon the exercise hereof) as determined in accordance with Section 1.3
above is greater than the Warrant Price in effect on such date, then this
Warrant shall automatically be deemed on and as of such date to be exercised
pursuant to Section 1.2 above as to all Shares (or such other securities) for
which it shall not previously have been exercised, and the Company shall, within
a reasonable time, deliver a certificate representing the Shares (or such other
securities) issued upon such exercise to Holder.
5.2 LEGENDS. Each certificate representing the Shares (and each certificate
representing the securities issued upon conversion of any Shares, if any) shall
be imprinted with a legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED
BY THE ISSUER TO ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ DATED JANUARY 25 , 2014, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID
ACT AND LAWS OR IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT
FROM SUCH REGISTRATION.
5.3 NOTICES. All notices and other communications hereunder from the
Company to the Holder, or vice versa, shall be deemed delivered and effective
(i) when given personally, (ii) on the third (3rd) Business Day after being
mailed by first-class registered or certified mail, postage prepaid, (iii) upon
actual receipt if given by facsimile or electronic mail and such receipt is
confirmed in writing by the recipient, or (iv) on the first Business Day
following delivery to a reliable overnight courier service, courier fee prepaid,
in any case at such address as may have been furnished to the Company or Holder,
as the case may be, in writing by the Company or such Holder from time to time
in accordance with the provisions of this Section 5.5. All notices to Holder
shall be addressed as follows until the Company receives notice of a change of
address in connection with a transfer or otherwise:
5.4 WAIVER. This Warrant and any term hereof may be changed, waived,
discharged or terminated (either generally or in a particular instance and
either retroactively or prospectively) only by an instrument in writing signed
by the party against which enforcement of such change, waiver, discharge or
termination is sought.
5.5 ATTORNEYS' FEES. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
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5.6 COUNTERPARTS; FACSIMILE/ELECTRONIC SIGNATURES. This Warrant may be
executed in counterparts, all of which together shall constitute one and the
same agreement. Any signature page delivered electronically or by facsimile
shall be binding to the same extent as an original signature page with regards
to any agreement subject to the terms hereof or any amendment thereto.
5.7 GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
5.8 HEADINGS. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
5.9 BUSINESS DAYS. "BUSINESS DAY" is any day that is not a Saturday,
Sunday or a holiday.
IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock
to be executed by their duly authorized representatives effective as of the
Issue Date written above.
ACCEPTED AND AGREED
"COMPANY"
SAFE LANE SYSTEMS, INC.
Dated: July 14, 2014
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇
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(Print)
Title: CEO
"HOLDER"
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Dated: July 14, 2014
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Consultant
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SCHEDULE B - APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned Holder hereby exercises its right to purchase
__________________ shares of the Symbol: Series A Stock of SAFE LANE SYSTEMS,
INC. (the "COMPANY") in accordance with the attached Warrant To Purchase Stock,
and tenders payment of the aggregate Warrant Price for such shares as follows:
/_/ Cashless Exercise pursuant to Section 1.2 of the Warrant
2. Please issue a certificate or certificates representing the Shares in
the name specified below:
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Holder's Name
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(Address)
3. By its execution below and for the benefit of the Company, Holder hereby
restates each of the representations and warranties in Section 4 of the Warrant
to Purchase Stock as of the date hereof.
HOLDER:
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By:
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Name:
----------------------------------------
Title:
----------------------------------------
(Date):
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