Document:

ex10-1.htm

Exhibit 10.1

 

RELEASE AND SETTLEMENT AGREEMENT

 AND

AMENDMENT TO CONTRACT

 

This Settlement and Release Agreement and Amendment to Contract (“Amendment”) is entered into and effective on May 20, 2010, by and between SCS Corporation, a Delaware Corporation, with an office located at 12012 Wickchester, Suite 475, Houston, TX 77079 (“SCS”), which is the wholly-owned subsidiary of Hyperdynamics Corporation (“HDY”), and Geophysical Service Inc., a Canadian Corporation, a service company with an office at 400, 400 5th Avenue S.W., Calgary, AB Canada T2P OL6, (“GSI”).  SCS and GSI are sometimes collectively referred to as “Parties”.

WHEREAS, SCS and GSI are parties to a Master Geophysical Data Acquisition Agreement dated February 13, 2008, as amended by and through the Release and Settlement Agreement between them dated June 27, 2008 (the “MGDA Agreement”); and

 

WHEREAS, the MGDA Agreement provided for seismic services by GSI in the Contract Area under the Hydrocarbon Production Sharing Contract (“PSC”) dated September 22, 2006 between SCS, as Contractor, and the Republic of Guinea (“Government” or “Guinea”), such Contract Area located offshore Guinea; and the PSC is subject to a Memorandum of Understanding dated September 14, 2009 between SCS and the Government (“MOU”) that requires, among other things, for SCS and the Government to review  and amend or clarify, if necessary, the PSC to ensure that it is consistent with terms similar to other international oil and gas production sharing agreements and requires that such review is completed no later than March 11, 2010 or such later time as agreed by the Parties (“PSC Amendment”); and

 

WHEREAS, SCS has assigned a partial participating interest as Contractor under the PSC to Dana Petroleum (E&P) Limited, of Aberdeen, Scotland (“Dana”) or a designated affiliate of Dana under the terms of a Sales and Purchase Agreement (“Dana SPA”) which calls for a payment of a total of Nineteen Million and Five Hundred Thousand Dollars US ($19,500,000) by Dana (“Dana Payment”) upon the execution and entry into full legal effect of any amendment that results from the review under the MOU; and, under the terms of the Dana SPA, Dana may, in its discretion, pay up to Fourteen Million and Five Hundred Thousand Dollars U.S. ($14,500,000) of the Dana Payment in ordinary shares of UK£0.15 each of Dana Petroleum plc (“Dana Stock”); and

 

WHEREAS, a dispute has arisen between the Parties concerning the MGDA Agreement; and

 

WHEREAS, the Parties wish to amicably resolve this dispute between them and amicably terminate the MGDA Agreement on mutually acceptable terms and conditions and in light of the contingencies set forth below.

 

NOW THEREFORE, in consideration of the mutual covenants and promises set forth in this Amendment, the Parties agree as follows:

 

1. Conditions.  Upon the occurrence of both (1) the execution and entry into full legal effectiveness of any amendment to the PSC that results from the review called for under the MOU and (2) Dana’s payment (whether in cash or stock) of the Nineteen Million and Five Hundred Thousand Dollars US ($19,500,000) pursuant to the Dana SPA, then the Parties shall perform and carry out the following.

 

2. Payments by SCS to GSI.  On or before May 25, 2010, SCS shall pay to GSI $3,000,000.00.  Unless stated otherwise, all dollar amounts shall be in U.S. dollars and payments to be made by SCS to GSI shall be valued in U.S. dollars.

 

3. Termination of MGDA Agreement.  Upon SCS’s full payment of the cash amount set forth in and under Paragraph 2 above, the MGDA Agreement shall be terminated and of no force and effect.  Specifically, the Parties recognize, acknowledge and agree that any interest that GSI would otherwise maintain in the seismic data generated or delivered under the MGDA Agreement, in whatever form and in whatever manner recorded or stored or delivered to others, including the revenue interest provided under the MGDA Agreement and any rights to market the seismic data, is terminated, released and relinquished for all purposes by GSI.  For all purposes, this termination, release and relinquishment shall also be subject to the provisions for the release by GSI of any and all of its claims, rights, causes of action as provided elsewhere in this Amendment.

 

4. No Admission.  This Amendment is not an admission of liability or wrongdoing by either Party, but is entered into solely in order to amicably resolve the dispute.

 

5. Full Release by GSI.  Upon GSI’s receipt of SCS’s full payment of the cash amount set forth in and under Paragraph 2 above, GSI hereby releases, relinquishes, indemnifies, holds harmless and protects HDY, its affiliates, officers and directors, employees, agents, attorneys and all other persons, natural and otherwise, associated or affiliated with it, past and present, from any and all claims, causes of actions, disputes and disagreements, whether now known or which should have been known through reasonable inquiry and due diligence, including those claims, assertions, allegations and causes of action arising from or related to the invoice for services delivered by GSI to SCS on or about November 17, 2009.  This release, relinquishment, indemnification and protection expressly extends to and includes any and all rights and any claims, causes of action, disputes and disagreements arising from any and all rights held, owned or asserted by GSI  under the MGDA Agreement, including the revenue interest or marketing rights set forth therein.

 

6. Full Release by SCS.  Upon GSI’s receipt of SCS’s full payment of the cash amount set forth in and under Paragraph 2 above, SCS hereby releases, relinquishes, indemnifies, holds harmless and protects GSI, its affiliates, officers and directors, employees, agents, attorneys and all other persons, natural and otherwise, associated or affiliated with it, past and present, from any and all claims, causes of actions, disputes and disagreements, whether now known or which should have been known through reasonable inquiry and due diligence, including those claims, assertions, allegations and causes of action arising from or related to the services delivered by GSI to SCS through or under the MGDA Agreement.  This release, relinquishment, indemnification and protection expressly extends to and includes any and all rights and any claims, causes of action, disputes and disagreements arising from any and all rights held, owned or asserted by SCS under the MGDA Agreement, including the revenue interest or marketing rights set forth therein.

 

7. Governing Law. This Amendment shall be governed by the laws of the State of Texas, and the Parties hereby mutually agree to and submit, for the purposes of enforcing this Amendment or resolving any dispute under it, to the courts of competent jurisdiction within the State of Texas; provided, however, that this Paragraph 7 shall be of no force and effect should either or both of the conditions set forth in Paragraph 1 above fail to occur before May 20, 2010, or such date as the Parties shall agree to in order to reasonably accomplish the conditions described in Paragraph 1, in which event the governing law, applicable jurisdiction, and choice of forum provisions shall be as set out in the MGDA Agreement as provided in Paragraph 11 below.

 

8. Survival of Certain Terms.  Terms and provisions necessary to carry out the purposes of this Amendment shall survive the execution of this Amendment.

 

9. Obligation to execute documents and take actions to carry out Amendment.  Both Parties shall take all actions, including execution of subsequent documents, and any and all other actions necessary to carry out the  purposes of this Amendment.

 

10. Amendment in Writing; Entireties clause. Subject to complete fulfillment of the conditions set out in Paragraph 1 and to the terms of Paragraph 11 below, this Amendment constitutes the entire agreement between the Parties and supersedes and supplants any other agreement, discussion and negotiation between them.  This Amendment may only be modified in writing signed by or on behalf of both Parties.

 

11. Failure of Conditions on Resolution of Dispute.  Notwithstanding anything in this Amendment to the contrary, should either or both of the conditions set forth in Paragraph 1 above fail to occur before May 20, 2010, or such date as the Parties shall agree to in order to reasonably accomplish the conditions described in Paragraph 1, both Parties agree that the Parties shall continue to attempt to resolve their disputes in a reasonable time and manner, but they shall maintain their respective rights, duties and obligations under the MGDA Agreement, which shall remain in effect, and may pursue all rights and remedies provided by law.  In these circumstances, it is also expressly recognized that this Amendment shall be considered as settlement discussions under Rule 408 of the Federal Rules of Evidence and the Texas Rules of Evidence in any subsequent proceeding, litigation, or arbitration.

 

[SIGNATURE PAGES FOLLOW]

 

 

  

  

  

 

 

12. EXECUTED this 20th day of May 2010.

 

SCS CORPORATION

 

 

By: /s/ Ray Leonard _______________

Ray Leonard

President and Chief Executive Officer

GEOPHYSICAL SERVICE INC.

By: /s/ Paul Einarrson _____________

Paul Einarrson

Chairman and Chief Operating Officerexh4-8_formrepwarrant.htm

 

 

 

 

 

 

 

 

 

EXHIBIT 4.8

 

FORM OF REPRESENTATIVE'S PURCHASE WARRANT

 

 

 

  

  

  

Healthy Fast Food, Inc.

PURCHASE WARRANT

Issued to:

PAULSON INVESTMENT COMPANY, INC.

Exercisable to Purchase

300,000 Units

of

HEALTHY FAST FOOD, INC.

Void after                     , 2015

  

  

  

This is to certify that, for value received and subject to the terms and conditions set forth below, the Warrantholder (hereinafter defined) is entitled to purchase, and the Company promises and agrees to sell and issue to the Warrantholder, at any time on or after         , 2010 and on or before         , 2015, up to 300,000 Units (hereinafter defined) at the Exercise Price (hereinafter defined).

 

This Warrant Certificate is issued subject to the following terms and conditions:

 

1.   Definitions of Certain Terms.  Except as may be otherwise clearly required by the context, the following terms have the following meanings:

 

(a)  “Act” means the Securities Act of 1933, as amended.

 

(b)  “Class C Warrant” means a warrant defined as a Class C Warrant in the Warrant Agreement.

 

(c)  “Closing Date” means the date on which the Offering is closed.

 

(d)  “Commission” means the Securities and Exchange Commission.

 

(e)  “Common Stock” means the common stock, par value $0.001, of the Company.

 

(f)  “Company” means Healthy Fast Food, Inc., a Nevada corporation.

 

(g)  “Company’s Expenses” means any and all expenses payable by the Company or the Warrantholder in connection with an offering described in Section 6 hereof, except Warrantholder’s Expenses.

 

(h)  “Corporate Financing Rule”  means Rule 5110 of the rules of the Financial Industry Regulatory Authority.

 

(i)  “Effective Date” means the date the Commission declares the Registration Statement effective under the Act.

 

(j)  “Exercise Price” means the price at which the Warrantholder may purchase one Unit upon exercise of Warrants as determined from time to time pursuant to the provisions hereof.  The initial Exercise Price is $        per Unit.

 

(k)  “Offering” means the public offering of Units made pursuant to the Registration Statement.

 

(l)  “Participating Underwriter” means any underwriter participating in the sale of the Securities pursuant to a registration under Section 6 of this Warrant Certificate.

 

(m)  “Registration Statement” means the Company’s registration statement (File No. 333 - 164096) as amended on the Closing Date.

 

  

  

  

 

(n)  “Rules and Regulations” means the rules and regulations of the Commission adopted under the Act.

 

(o)  “Securities” means the securities obtained or obtainable upon exercise of the Warrant or securities obtained or obtainable upon exercise, exchange, or conversion of such securities.

 

(p)  “Unit” means one share of Common Stock and one Class C Warrant.

 

(q)  “Warrant Agreement” means that certain Warrant Agreement, dated as of ________, 2010, by and between the Company and Computershare Trust Company relating to the issuance of Unit Warrants.

 

(r)  “Warrant Certificate” means a certificate evidencing the Warrant.

 

(s)  “Warrantholder” means a record holder of the Warrant or Securities.  The initial Warrantholder is Paulson Investment Company, Inc.

 

(t)  “Warrantholder’s Expenses” means the sum of (i) the aggregate amount of cash payments made to an underwriter, underwriting syndicate, or agent in connection with an offering described in Section 6 hereof multiplied by a fraction the numerator of which is the aggregate sales price of the Securities sold by such underwriter, underwriting syndicate, or agent in such offering and the denominator of which is the aggregate sales price of all of the securities sold by such underwriter, underwriting syndicate, or agent in such offering and (ii) all out-of-pocket expenses of the Warrantholder, except for the fees and disbursements of one firm retained as legal counsel for the Warrantholder that will be paid by the Company.

 

(u)  “Warrant” means the warrant evidenced by this certificate, any similar certificate issued in connection with the Offering, or any certificate obtained upon transfer or partial exercise of the Warrant evidenced by any such certificate.

 

2.   Exercise of Warrant.  All or any part of the Warrant represented by this Warrant Certificate may be exercised commencing on the first anniversary of the Effective Date and ending at 5 p.m. Pacific Time on the fifth anniversary of the Effective Date (the “Expiration Date”) by surrendering this Warrant Certificate, together with appropriate instructions, duly executed by the Warrantholder or by its duly authorized attorney, at the office of the Company, 1075 American Pacific, Suite C, Henderson, Nevada 89074; or at such other office or agency as the Company may designate.  The date on which such instructions are received by the Company shall be the date of exercise.  Subject to the provisions below, upon receipt of notice of exercise, the Company shall immediately instruct its transfer agent to prepare certificates for the Securities to be received by the Warrantholder upon completion of the Warrant exercise.  When such certificates are prepared, the Company shall notify the Warrantholder and deliver such certificates to the Warrantholder or as per the Warrantholder’s instructions immediately upon payment in full by the Warrantholder, in lawful money of the United States, of the Exercise Price payable with respect to the Securities being purchased, if any.  If the Warrantholder shall represent and warrant that all applicable registration and prospectus delivery requirements for their sale have been complied with upon sale of the Securities received upon exercise of the Warrant, such certificates shall not bear a legend with respect to the Act.

 

  

  

  

If fewer than all the Securities purchasable under the Warrant are purchased, the Company will, upon such partial exercise, execute and deliver to the Warrantholder a new Warrant Certificate (dated the date hereof), in form and tenor similar to this Warrant Certificate, evidencing that portion of the Warrant not exercised.  The Securities to be obtained on exercise of the Warrant will be deemed to have been issued, and any person exercising the Warrant will be deemed to have become a holder of record of those Securities, as of the date of the payment of the Exercise Price.

 

Notwithstanding the foregoing, in no event shall such Securities be issued, and the Company is authorized to refuse to honor the exercise of the Warrant, if such exercise would result in the opinion of the Company’s Board of Directors, upon advice of counsel, in the violation of any law; and provided further that, if the Warrant is exercisable solely for Securities listed on a securities exchange or for which there are at least three independent market makers, the Company may elect to redeem the Warrant submitted for exercise for a price equal to the difference between the aggregate low asked price, or closing price, as the case may be, of the Securities for which the Warrant is exercisable on the date of exercise and the Exercise Price; in the event of such redemption, the Company will pay to the holder of the Warrant the above-described redemption price in cash within 10 business days after receipt of notice of exercise.

 

3.   Adjustments in Certain Events.  The number, class, and price of Securities for which this Warrant Certificate may be exercised are subject to adjustment from time to time upon the happening of certain events as follows:

 

(a)  If the outstanding shares of the Company’s Common Stock are divided into a greater number of shares or a dividend in stock is paid on the Common Stock, the number of shares of Common Stock and the number of Class C Warrants for which the Warrant is then exercisable will be proportionately increased and the Exercise Price will be proportionately reduced; and, conversely, if the outstanding shares of Common Stock are combined into a smaller number of shares of Common Stock, the number of shares of Common Stock and the number of Class C Warrants for which the Warrant is then exercisable will be proportionately reduced and the Exercise Price and the number of Class C Warrants will be proportionately increased. The increases and reductions provided for in this Section 3(a) will be made with the intent and, as nearly as practicable, the effect that neither the percentage of the total equity of the Company obtainable on exercise of the Warrants nor the price payable for such percentage upon such exercise will be affected by any event described in this Section 3(a).

 

(b)  In case of any change in the Common Stock through merger, consolidation, reclassification, reorganization, partial or complete liquidation, purchase of substantially all the assets of the Company, or other change in the capital structure of the Company, then, as a condition of such change, lawful and adequate provision will be made so that the holder of this Warrant Certificate will have the right thereafter to receive upon the exercise of the Warrant the kind and amount of shares of stock or other securities or property to which he would have been entitled if, immediately prior to such event, he had held the number of shares of Common Stock and the number of Class C Warrants obtainable upon the exercise of the Warrant.  In any such case, appropriate adjustment will be made in the application of the provisions set forth herein with respect to the rights and interest thereafter of the Warrantholder, to the end that the provisions set forth herein will thereafter be applicable, as nearly as reasonably may be, in relation to any shares of stock or other securities or property thereafter 

 

  

  

  

 

deliverable upon the exercise of the Warrant.  The Company will not permit any change in its capital structure to occur unless the issuer of the shares of stock or other securities to be received by the holder of this Warrant Certificate, if not the Company, agrees to be bound by and comply with the provisions of this Warrant Certificate.

 

(c)  When any adjustment is required to be made in the number of shares of Common Stock, Class C Warrants, other securities, or the property purchasable upon exercise of the Warrant, the Company will promptly determine the new number of such shares or other securities or property purchasable upon exercise of the Warrant and (i) prepare and retain on file a statement describing in reasonable detail the method used in arriving at the new number of such shares or other securities or property purchasable upon exercise of the Warrant and (ii) cause a copy of such statement to be mailed to the Warrantholder within thirty (30) days after the date of the event giving rise to the adjustment.

 

(d)  No fractional shares of Common Stock or other securities will be issued in connection with the exercise of the Warrant, but the Company will pay, in lieu of fractional shares, a cash payment therefor on the basis of the mean between the bid and asked prices of the Common Stock in the over-the-counter market or the last sale price of the Common Stock on the principal exchange or other trading facility on which the Common Stock is traded on the day immediately prior to exercise.

 

(e)  If securities of the Company or securities of any subsidiary of the Company are distributed pro rata to holders of Common Stock, such number of securities will be distributed to the Warrantholder or its assignee upon exercise of its rights hereunder as such Warrantholder or assignee would have been entitled to if this Warrant Certificate had been exercised prior to the record date for such distribution.  The provisions with respect to adjustment of the Common Stock provided in this Section 3 will also apply to the securities to which the Warrantholder or its assignee is entitled under this Section 3(e).

 

(f)  Notwithstanding anything herein to the contrary, there will be no adjustment made hereunder on account of the sale by the Company of the Common Stock or other Securities purchasable upon exercise of the Warrant.

 

(g)  If, immediately prior to any exercise of Warrants, there shall be outstanding no securities of a class or series that, but for the provisions of this Section 3, would be issuable upon such exercise (the “Formerly Issuable Securities”), then, upon such exercise, and in lieu of the Formerly Issuable Securities, the Company shall issue that number and kind of other securities or property for which the Formerly Issuable Securities were most recently exercisable or into which the Formerly Issuable Securities were most recently convertible, as the case may be.

 

4.   Reservation of Securities.  The Company agrees that the number of shares of Common Stock or other Securities sufficient to provide for the exercise of the Warrant upon the basis set forth above will at all times during the term of the Warrant be reserved for exercise.

 

5.   Validity of Securities.  All Securities delivered upon the exercise of the Warrant will be duly and validly issued in accordance with their terms, and the Company will pay all 

 

  

  

  

 

documentary and transfer taxes, if any, in respect of the original issuance thereof upon exercise of the Warrant.

 

6.   Registration of Securities Issuable on Exercise of Warrant Certificate.

 

(a)  The Company will register the Securities with the Commission pursuant to the Act so as to allow the unrestricted sale of the Securities to the public from time to time commencing on the first anniversary of the Effective Date and ending at 5:00 p.m. Pacific Time on the fifth anniversary of the Effective Date (the “Registration Period”).  The Company will also file such applications and other documents necessary to permit the sale of the Securities to the public during the Registration Period in those states in which the Units were qualified for sale in the Offering or such other states as the Company and the Warrantholder agree to.  In order to comply with the provisions of this Section 6(a), the Company is not required to file more than one registration statement.  No registration right of any kind, “piggyback” or otherwise, will last longer than five years from the Effective Date.

 

(b)  The Company will pay all of the Company’s Expenses and each Warrantholder will pay its pro rata share of the Warrantholder’s Expenses relating to the registration, offer, and sale of the Securities.

 

(c)  Except as specifically provided herein, the manner and conduct of the registration, including the contents of the registration statement, will be entirely in the control and at the discretion of the Company.  The Company will file such post-effective amendments and supplements as may be necessary to maintain the currency of the registration statement during the period of its use.  In addition, if the Warrantholder participating in the registration is advised by counsel that the registration statement, in their opinion, is deficient in any material respect, the Company will use its best efforts to cause the registration statement to be amended to eliminate the concerns raised.

 

(d)  The Company will furnish to the Warrantholder the number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as it may reasonably request in order to facilitate the disposition of Securities owned by it.

 

(e)  The Company will, at the request of Warrantholders holding at least 50 percent of the then outstanding Warrants: (i) furnish an opinion of the counsel representing the Company for the purposes of the registration statement pursuant to this Section 6, addressed to the Warrantholders and any Participating Underwriter; (ii) furnish an appropriate letter from the independent public accountants of the Company, addressed to the Warrantholders and any Participating Underwriter; and (iii) make such representations and warranties to the Warrantholders and any Participating Underwriter as are customarily given to underwriters of public offerings in connection with such offerings.  A request pursuant to this subsection (e) may be made on three occasions.  The documents required to be delivered pursuant to this subsection (e) will be dated within ten days of the request and will be, in form and substance, equivalent to similar documents furnished to the underwriters in connection with the Offering, with such changes as may be appropriate in light of changed circumstances.

 

7.   Indemnification in Connection with Registration.

 

  

  

  

(a)  If any of the Securities are registered, the Company will indemnify and hold harmless each selling Warrantholder, any person who controls any selling Warrantholder within the meaning of the Act, and any Participating Underwriter against any losses, claims, damages, or liabilities, joint or several, to which any Warrantholder, controlling person, or Participating Underwriter may be subject under the Act or otherwise; and it will reimburse each Warrantholder, each controlling person, and each Participating Underwriter for any legal or other expenses reasonably incurred by the Warrantholder, controlling person, or Participating Underwriter in connection with investigating or defending any such loss, claim, damage, liability, or action, insofar as such losses, claims, damages, or liabilities, joint or several (or actions in respect thereof), arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any such registration statement or any preliminary prospectus or final prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any case to the extent that any loss, claim, damage, or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in any registration statement, preliminary prospectus, final prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with written information furnished by a Warrantholder for use in the preparation thereof.  The indemnity agreement contained in this subparagraph (a) will not apply to amounts paid to any claimant in settlement of any suit or claim unless such payment is first approved by the Company, such approval not to be unreasonably withheld.

 

(b)  Each selling Warrantholder, as a condition of the Company’s registration obligation, will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed any registration statement or other filing or any amendment or supplement thereto, and any person who controls the Company within the meaning of the Act, against any losses, claims, damages, or liabilities to which the Company or any such director, officer, or controlling person may become subject under the Act or otherwise, and will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, or controlling person in connection with investigating or defending any such loss, claim, damage, liability, or action, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in said registration statement, any preliminary or final prospectus, or other filing, or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in said registration statement, preliminary or final prospectus, or other filing, or amendment or supplement, in reliance upon and in conformity with written information furnished by such Warrantholder for use in the preparation thereof; provided, however, that the indemnity agreement contained in this subparagraph (b) will not apply to amounts paid to any claimant in settlement of any suit or claim unless such payment is first approved by the Warrantholder, such approval not to be unreasonably withheld.

 

(c)  Promptly after receipt by an indemnified party under subparagraphs (a) or (b) above of notice of the commencement of any action, such indemnified party will, if a claim 

 

 

  

  

  

 

in respect thereof is to be made against an indemnifying party, notify the indemnifying party of the commencement thereof; but the omission to notify the indemnifying party will not relieve it from any liability that it may have to any indemnified party otherwise than under subparagraphs (a) and (b).

 

(d)  If any such action is brought against any indemnified party and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party; and after notice from the indemnifying party to such indemnified party of its election to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation.

 

8.   Restrictions on Transfer.  This Warrant Certificate and the Warrant may not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of one year immediately following the Effective Date, except as permitted in subparagraph (g)(2) of the Corporate Financing Rule.  The Warrant may be divided or combined, upon request to the Company by the Warrantholder, into a certificate or certificates evidencing the same aggregate number of Warrants.

 

9.   No Rights as a Shareholder.  Except as otherwise provided herein, the Warrantholder will not, by virtue of ownership of the Warrant, be entitled to any rights of a shareholder of the Company but will, upon written request to the Company, be entitled to receive such quarterly or annual reports as the Company distributes to its shareholders.

 

10.    Notice.  Any notices required or permitted to be given hereunder will be in writing and may be served personally or by mail; and if served will be addressed as follows:

 

If to the Company:

Healthy Fast Food, Inc.

1075 American Pacific, Suite C

Henderson, NV  89074

Attention:  President

If to the Warrantholder:

at the address furnished

by the Warrantholder to the

Company for the purpose of

notice.

 

Any notice so given by mail will be deemed effectively given 48 hours after mailing when deposited in the United States mail, registered or certified mail, return receipt requested, postage prepaid and addressed as specified above.  Any party may by written notice to the other specify a different address for notice purposes.

  

  

  

11.  Applicable Law.  This Warrant Certificate will be governed by and construed in accordance with the laws of the State of Oregon, without reference to conflict of laws principles thereunder.  All disputes relating to this Warrant Certificate shall be tried before the courts of Oregon located in Multnomah County, Oregon to the exclusion of all other courts that might have jurisdiction.

 

Dated as of           , 2010

HEALTHY FAST FOOD, INC.

By: ______________________________________

Name:  Henry E. Cartwright

Title:    President

Agreed and Accepted as of            , 2010

 

PAULSON INVESTMENT COMPANY, INC.

By: ______________________________________

Name:

Title:

 

 

 

 

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