Document:

Unassociated Document

EXHIBIT 10.2

   

UNIT PURCHASE AGREEMENT

This is a Unit Purchase Agreement (this “Agreement”), dated as of July ___, 2010, by and among Live Current Media Inc., a Nevada corporation (the “Company”), and certain other persons (each such person, a “Purchaser” and collectively, the “Purchasers”) listed on Exhibit A attached hereto, as Exhibit A may be amended from time to time.

Pursuant to this Agreement:

(i)    the Purchasers are purchasing up to 80 Units (as defined below) in the aggregate amount of up to $400,000 (the “Purchase Price”) at the Closing (as defined in Section 2 below) and

(ii)    the Purchasers are purchasing Units at a Purchase Price of $5,000 per Unit.  Each Unit shall consist of (a) 50,000 shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (“Common Stock”) and (b) a Warrant  (the “Warrant”) to purchase 50,000 shares of Common Stock having the rights and in the form set forth on Exhibit B hereto.  The shares of Common Stock issuable upon exercise of the Warrants shall collectively sometimes be referred to herein as the “Warrant Shares”.  The Warrants and the Shares collectively shall sometimes be referred to herein as the “Units.”

Certain capitalized terms used herein are defined in Article 7.

The parties hereby agree as follows:

   

1.    Purchase and Sale of Units.

 

1.1   Authorization of Units.  On or prior to the Closing, the Company shall have authorized the sale and issuance to the Purchasers of the Shares, and the issuance of the Warrants.

 

1.2    Sale and Purchase of Units. Subject to the terms and conditions hereof, at the Closing, the Company hereby agrees to issue and sell to each Purchaser, and each Purchaser agrees to purchase from the Company, that number of Units as set forth opposite such Purchaser's name on Exhibit A, as Exhibit A may be amended from time to time, at a Purchase Price of $5,000 per Unit.

 

1.3   Additional Offering.  The Purchasers agree that the Company shall have the right to sell up to an additional 70 Units (the “Additional Units”) to other persons pursuant to agreements with terms and conditions substantially similar to this Agreement; provided, however, that all such Additional Units are sold on or before the Final Closing Date (as defined below).

  

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2.    The Closing; Delivery.

 

2.1   The Closing. The purchase and sale of the Units, and the issuance of the Shares and Warrants, shall be consummated in a closing (the “Closing”), which is to take place at the Company’s headquarters, 780 Beatty Street, Suite 307, Vancouver, British Columbia V6B 2M1, upon the satisfaction of all conditions to Closing set forth in this Agreement; provided, however, that the final closing shall occur on or before August 31, 2010 (the “Final Closing Date”).  The “Closing Date” shall be the date that the Purchaser’s funds, representing the amount due to the Company for the Purchase Price, is transmitted by wire transfer or otherwise to or for the benefit of the Company.

 

2.2   Deliveries.  At each Closing,

 

2.2.1   The Purchaser shall deliver an executed completed Purchaser Signature Page.

 

2.2.2   The Purchaser shall deliver payment in full in the amount of the Purchase Price for each Unit purchased, which payment shall be in the form of a check or wire transfer to the Company.  Where the Purchase Price is identified on Exhibit A as a cancellation of indebtedness, payment of the Purchase Price shall be made by (y) surrendering for cancellation the original instrument evidencing such indebtedness or otherwise being offered for exchange, or (z) delivering an affidavit of loss and indemnity in a form reasonably prescribed by the Company.

 

2.2.3   The Company will cause to be issued to the Purchaser the (i) certificates representing the Shares issued as part of the Units purchased by the Purchaser.   Each such Share shall be in definitive form and registered in the name of the Purchaser, as set forth on the Purchaser Signature Page, against delivery to the Company by the Purchaser of the items set forth in Sub-Sections 2.2.1 and 2.2.2 above.

 

2.2.4   The Company will issue the Warrants to the Purchaser.  Each such Warrant shall be in definitive form and registered in the name of the Purchaser, as set forth on the Purchaser Signature Page, against delivery to the Company by the Purchaser of the items set forth in Sub-Sections 2.2.1 and 2.2.2 above.

 

2.2.5   The Company shall deliver to each Purchaser (i) an executed completed Agreement, (ii) the certificates representing the Shares as part of the Units purchased by the Purchaser and (iii) the Warrant(s).

2.3   Each Closing Identical.  Each Closing shall be upon substantially identical terms and conditions to those contained herein.  Each Closing may be effected on or before the Final Closing Date at the Company’s sole election until all of the Units have been sold.

 

2.4   Use of Proceeds.  The Purchaser understands that immediately subsequent to the Closing the Company will have use of the funds; there is no minimum purchase requirement that must be met before the Company may use the funds.  The Company agrees that the proceeds from the sale of the Units will be used for the payment of debt, working capital and general corporate purposes.

 

  

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3.   Representations and Warranties of the Company.  In order to induce each Purchaser to enter into this Agreement and to purchase the Units, except as set forth in the SEC Documents (as defined in Section 3.4) the Company hereby makes such representations and warranties, as of the date of this Agreement and of the Closing, to each Purchaser as set forth below.

 

3.1   Incorporation. The Company is a corporation validly existing and in good standing under the laws of the State of Nevada, and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or the character of the property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not result in a Material Adverse Effect.  The Company has all requisite corporate power and authority to carry on its business as now conducted and to carry out the transactions contemplated hereby.  The Company is not in violation of any of the provisions of its Articles of Incorporation (or other charter document) or By-laws.

 

3.2    Capitalization.

 

(a)    The Company is authorized to issue 50,000,000 shares of Common Stock of which, as of July 12, 2010, 24,442,316 shares were issued and outstanding.  The Company is committed to issuing an additional 2,500,000 shares of Common Stock in settlement of a debt and has outstanding options, warrants and rights convertible into 4,413,098 shares of Common Stock.  The Company has no other contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock or any securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of any of the Units.

 

(b)    The Company has reserved for the purpose of issuance upon exercise of the Warrants a number of shares of Common Stock sufficient to cover the exercise of the Warrants.

3.3   Authorization; Lawful Issuance. All corporate action on the part of the Company, its officers and directors necessary for the authorization, execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated herein and therein has been taken.  When executed and delivered by the Company, the Transaction Documents shall constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and by general equitable principles.  The Company has all requisite corporate power and authority to enter into the Transaction Documents and to carry out and perform its obligations under their respective terms.  The issuance, sale and delivery hereunder by the Company of the Shares, the issuance of the Warrants, and the Warrant Shares, pursuant to the terms and subject to the conditions of this Agreement, have been duly authorized by all requisite corporate action of the Company.  The Shares and Warrant Shares, when issued, will be duly and validly issued and outstanding, fully paid and nonassessable, and not subject to preemptive or any other similar rights of the stockholders of the Company or others.

 

  

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3.4   SEC Documents.  The Company has furnished to the Purchasers (either directly or by providing to the Purchasers instructions to allow the Purchasers to view the documents filed by the Company on the Securities and Exchange Commission’s EDGAR website) true and complete copies of the following reports filed by the Company (collectively, the “SEC Documents”): (i) the annual report on Form 10-K for the year ended December 31, 2009; (ii) the quarterly report on Form 10-Q for the period ended March 31, 2010 and (iii) the Company’s Current Reports on Form 8-K filed after March 29, 2010 (the “Current Reports”).  As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act, and the rules and regulations promulgated thereunder, and none of the SEC Documents contain any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Documents comply in all material respects with applicable accounting requirements and the rules and regulations of the Securities and Exchange Commission with respect thereto in effect at the time of filing.

 

3.5   Consents.  Except for (a) the filing and effectiveness of any registration statement required to be filed by the Company under the Securities Act pursuant to the terms of this Agreement and (b) any required state “blue sky” law filings in connection with the transactions contemplated by this Agreement, all consents, approvals, orders and authorizations required on the part of the Company in connection with the execution or delivery of, or the performance of the obligations under, the Transaction Documents, and the consummation of the transactions contemplated herein and therein, have been obtained and will be effective as of the date hereof. The execution and delivery by the Company of the Transaction Documents, the consummation of the transactions contemplated herein and therein, and the issuance of the Shares, the Warrants and the Warrant Shares, do not require the consent or approval of the stockholders of, or any lender to, the Company.

 

3.6   No Conflict; Compliance With Laws.  Assuming the representations and warranties of the Purchasers in Section 4 are true and correct:

 

(a)    The execution, delivery and performance by the Company of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, including the issuance of the Shares, the Warrants and the Warrant Shares, do not and will not (i) conflict with or violate any provision of the Articles of Incorporation (or other charter documents) or By-laws of the Company, (ii) breach, conflict with or result in any violation of or default (or an event that with notice or lapse of time or both would become a default) under, or give rise to a right of termination, amendment, acceleration or cancellation (with or without notice or lapse of time, or both) of any obligation, contract, commitment, lease, agreement, mortgage, note, bond, indenture or other instrument or obligation to which the Company is a party or by which its properties or assets are bound, except in each case to the extent such breach, conflict, violation, default, termination, amendment, acceleration or cancellation does not, and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or (iii) result in a violation of any statute, law, rule, regulation, order, ordinance or restriction applicable to the Company or any of its properties or assets, or any judgment, writ, injunction or decree of any court, judicial or quasi-judicial tribunal applicable to the Company any of its properties or assets.

 

  

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(b)    Except as otherwise described herein, the Company (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company), nor has the Company received written notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties or assets is bound (whether or not such default or violation has been waived) except in each case as does not, and could not, reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.  The Company has issued $286,440 in convertible promissory notes to five former stockholders of Entity, Inc.  The convertible promissory notes were due to be paid on May 22, 2010.  Furthermore, in accordance with the Agreement and Plan of Merger entered into by the Company, Entity, Inc. and the stockholders of Entity, Inc. on March 25, 2008, the Company also owes a total of $40,861.60 (the “Cash Payment”) to four former stockholders of Entity, Inc.  This amount was part of the consideration to be paid to these stockholders for their shares of Entity, Inc.  The payment was due on May 22, 2009.  Neither the convertible promissory notes nor the Cash Payment have been paid.

3.7    Brokers or Finders. The Company has not dealt with any broker or finder in connection with the transactions contemplated by the Transaction Documents, and the Company has not incurred, or shall not incur, directly or indirectly, any liability for any brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Transaction Documents, or any transaction contemplated hereby or thereby.

 

3.8   OTCBB. The Company's Common Stock is currently quoted, on the OTCBB.

 

3.9   Litigation.  Except as otherwise disclosed in the SEC Documents and herein, there are no pending or, to the Company's knowledge, threatened actions, suits, claims, proceedings or investigations against or involving the Company.  The Company has been served with a complaint that was filed on May 14, 2010 in the Circuit Court of Cook County, Illinois County Department, Chancery Division.  The case is titled “David Jeffs and Richard Jeffs, derivatively on behalf of Live Current Media, Inc. (plaintiffs) vs. C. Geoffrey Hampson, James Taylor, Mark Benham and Boris Wertz (defendants) and Live Current Media, Inc. (nominal defendant)”.  The plaintiffs allege, among other matters, that the members of the current board of directors breached their fiduciary duties of loyalty, trust, good faith and due care by failing to properly supervise Mr. Hampson and that Mr. Hampson breached his fiduciary duties and his employment agreement by failing to devote the time necessary to manage the Company’s business and failing to disclose to the members of the former board of directors his activities relating to other businesses. The plaintiffs have asked the Court for compensatory damages of no less than $50 million, punitive damages and attorney’s fees and costs of bringing the action.  On June 29, 2010 the Company was served with a summons and complaint asking the District Court of the State of Nevada to issue an injunction ordering the election of directors at a special meeting of the shareholders.  The action was filed in the Second Judicial District Court of the State of Nevada in and for the County of Washoe and is titled “David Jeffs, Susan Jeffs, Carl Jackson and Jodi Sansone, plaintiffs and stockholders of Live Current Media, Inc. vs. Live Current Media, Inc., defendant”.  The Company has scheduled an annual meeting for the purpose of electing directors on October 12, 2010.

 

  

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3.10   No Undisclosed Liabilities; Indebtedness.  Since the date of the latest filed SEC Document, the Company has incurred no liabilities or obligations, whether known or unknown, asserted or unasserted, fixed or contingent, accrued or unaccrued, matured or unmatured, liquidated or unliquidated, or otherwise, except for liabilities or obligations that, individually or in the aggregate, do not or would not have a Material Adverse Effect and other than liabilities and obligations arising in the ordinary course of business.  Except for indebtedness reflected in the SEC Documents, the Company has no indebtedness outstanding as of the date hereof.  Except as described in Section 3.6(b) above, the Company is not in default with respect to any outstanding indebtedness or any instrument relating thereto.

 

3.11   Title to Assets.  The Company has good and marketable title to all real and personal property owned by it that is material to the business of the Company, in each case free and clear of all liens and encumbrances, except those, if any, reflected in the SEC Documents or incurred in the ordinary course of business consistent with past practice.  Any real property and facilities held under lease by the Company are held by it under valid, subsisting and enforceable leases (subject to laws of general application relating to bankruptcy, insolvency, reorganization, or other similar laws affecting creditors' rights generally and other equitable remedies) with which the Company is in compliance in all material respects.

 

3.12   Intellectual Property.  The Company is the sole and exclusive owner of, or has the exclusive right to use, all right, title and interest in and to all material foreign and domestic patents, patent rights, trademarks, service marks, trade names, brands, copyrights (whether or not registered and, if applicable, including pending applications for registration) and other proprietary rights or information, owned or used by the Company (collectively, the “Rights”), and in and to each material invention, software, trade secret, and technology used by the Company (the Rights and such other items, the “Intellectual Property”), and, to the Company's knowledge, the Company owns and has the right to use the same, free and clear of any claim or conflict with the rights of others (subject to the provisions of any applicable license agreement). There have been no written claims made against the Company asserting the invalidity, abuse, misuse, or unenforceability of any of the Intellectual Property, and, to the Company's knowledge, there are no reasonable grounds for any such claims.

 

3.13   Subsidiaries; Joint Ventures.  Except for the subsidiaries described in the SEC Documents, the Company has no subsidiaries and (i) does not otherwise own or control, directly or indirectly, any other Person and (ii) does not hold equity interests, directly or indirectly, in any other Person.  Except as described in the SEC Documents, the Company is not a participant in any joint venture, partnership, or similar arrangement material to its business.

 

  

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3.14   Private Placement; Communications with Purchasers.  Neither the Company nor any person acting on the Company's behalf has sold or offered to sell or solicited any offer to buy the Shares, the Warrants or the Warrant Shares by means of any form of general solicitation or advertising.  Neither the Company nor any of its Affiliates nor any person acting on the Company’s behalf has, directly or indirectly, at any time within the past six months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the sale or issuance of the Shares, the Warrants or the Warrant Shares as contemplated hereby or (ii) cause the offering or issuance of the Shares, the Warrants or the Warrant Shares pursuant to the Transaction Documents to be integrated with prior offerings by the Company for purposes of any applicable law, regulation or stockholder approval provisions.  No consent, license, permit, waiver, approval or authorization of, or designation, declaration, registration or filing with, the Securities and Exchange Commssion or any state securities regulatory authority is required in connection with the offer, sale, issuance or delivery of the Shares, the Warrants or the Warrant Shares other than the possible filing of Form D with the Securities and Exchange Commission and the appropriate “blue sky” filings with the states in which the Purchasers reside.

 

3.15   Disclosure.  Neither the Company nor, to the Company's knowledge, any other Person acting on its behalf and at the direction of the Company, has provided to any Purchaser or its agents or counsel any information that in the Company’s reasonable judgment, at the time such information was furnished, constitutes material, non-public information, except such information as may have been disclosed to certain members of the board of directors, who are affiliated with certain Purchasers, in their capacity as directors of the Company.  The Company understands and confirms that each Purchaser will rely on the representations and covenants contained herein in effecting the transactions contemplated by the Transaction Documents.  All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby furnished by or on behalf of the Company, taken as a whole is true and correct and does not contain any untrue statement of material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  No event or circumstance has occurred or information exists with respect to the Company or its business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.

4.   Representations and Warranties of the Purchasers.  Each Purchaser hereby severally and not jointly, represents and warrants to the Company, as to itself only, as follows:

 

4.1   Accreditation and Sophistication.  The Purchaser is an “accredited investor” as defined in Rule 50 1(a) promulgated under the Securities Act and has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the transactions contemplated under the Transaction Documents. The representations made by the Purchaser on the Purchaser Signature Page are true and correct.

 

  

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4.2   Foreign Investors.  If the Purchaser is not a United States Person (as defined by Section 770 1(a)(30) of the Code), such Purchaser hereby represents that the Purchaser has satisfied himself or itself as to the full observance of the laws of his, her or its jurisdiction in connection with any invitation to subscribe for the Units or any use of the Transaction Documents, including (i) the legal requirements within his, her or its jurisdiction for the purchase of the Securities, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Securities.  Such Purchaser’s subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other laws of the Purchaser’s jurisdiction.

 

4.3   Organization, Good Standing and Power.  The Purchaser, if not an individual, is validly existing and in good standing under the laws of the state in which it is organized or formed and it has the requisite power to own, lease and operate its properties and assets and to conduct its business as it is now being conducted.  The Purchaser has the requisite power and authority to enter into and perform the Transaction Documents and to purchase the Units in accordance with the terms thereof.  The execution, delivery and performance of the Transaction Documents by the Purchaser and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action, and no further consent or authorization of the Purchaser is required.  This Agreement has been duly executed and delivered by the Purchaser and constitutes, or shall constitute when duly executed and delivered by all parties thereto, a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles of general application.  The Purchaser represents that it has not been organized, reorganized or otherwise formed for the purpose of investing in the Company.

 

4.4   Ability to Bear Risk.  The Purchaser’s financial condition is such that he, she or it is able to bear all economic risks of investment in the Securities, including a complete loss of the investment therein.  The Purchaser has sufficient knowledge and experience in finance and business that he, she or it is capable of evaluating the risks and merits of his, her or its investment in the Company.

 

4.5   Investment Intent.  This Agreement is made with the Purchasers in reliance upon each Purchaser’s representation to the Company, which by such Purchaser’s execution of this Agreement, such Purchaser hereby confirms that he, she or it is acquiring the Units, the Shares, and the Warrant and the Warrant Shares into which such Warrant may be exercised (collectively, the “Securities”), solely for his, her or its own account and not as a nominee or agent, for investment purposes, with no present intention of, and not for the purpose of, distributing or reselling any of the Securities, or any interest therein in violation of applicable securities laws.

  

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4.6   Disclosure of Company Information. The Purchaser has received and read all information he, she or it has deemed necessary or appropriate for purposes of considering his, her or its investment hereunder including, without limitation, the SEC Documents, and has had the opportunity to discuss the Company’s business with the directors, officers and management of the Company.  The Purchaser has also had the opportunity to ask questions and receive answers from the Company regarding the terms and conditions of this investment.  The Purchaser represents that his, her or its decision to purchase the Units hereunder is in reliance solely upon his, her or its own judgment together with the advice of those advisors retained by such Purchaser, if any, and has been made without any reliance on any recommendation or endorsement of the Company or any third party with respect thereto.

 

4.7   Restricted Securities.

 

4.7.1   The Purchaser has been advised that neither the Units, the Shares, the Warrants, nor the Warrant Shares have been registered under the Securities Act or any other applicable securities laws and that Securities are being offered and sold pursuant to Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder, and that the Company’s reliance upon Section 4(2) and Rule 506 of Regulation D is predicated in part on the Purchaser representations as contained herein.  The Purchaser acknowledges that the Securities will be issued as “restricted securities” as defined by Rule 144 promulgated pursuant to the Securities Act.  None of the Securities may be resold in the absence of an effective registration thereof under the Securities Act and applicable state securities laws unless, in the opinion of the Company’s counsel, an applicable exemption from registration is available.

 

4.7.2   The Purchaser represents that the Purchaser is acquiring the Securities for the Purchaser’s own account, and not as nominee or agent, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act, in a manner which would require registration under the Securities Act or any state securities laws.

 

4.7.3   The Purchaser understands and acknowledges that the Securities, when issued, will bear the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF ANY STATE HAVING JURISDICTION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR ACTS.

4.7.4   The Purchaser acknowledges that an investment in the Securities is not liquid and is transferable only under limited conditions.  The Purchaser acknowledges that such securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available.  The Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act, which permits limited resale of restricted securities subject to the satisfaction of certain conditions and that such Rule is not now available and, in the future, may not become available for resale of any of the Securities.

 

  

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4.8   No General Solicitation.  Neither the Purchaser nor, if the Purchaser is an entity, any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Securities.

 

4.9   Exculpation Among Purchasers.  Each Purchaser acknowledges that he, she or it is not relying upon any Person, firm or corporation, other than the Company and its officers and directors, in making his, her or its investment or decision to invest in the Securities.  Such Purchaser agrees that no Purchaser nor the respective controlling Persons, officers, directors, partners, agents, or employees of any Purchaser that is an entity shall be liable to any other Purchaser for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Units.

 

4.10   Residence.  If the Purchaser is an individual, then the Purchaser resides in the state or province identified in the address the Purchaser set forth on the Purchaser Signature Page; if the Purchaser is a partnership, corporation, limited liability company or other entity, then the office or offices of the Purchaser in which its principal place of business is located is at the address or addresses of the Purchaser set forth on the Purchaser Signature Page.

 

4.11   Pre-existing Relationship.  The Purchaser has a preexisting personal or business relationship with the Company, one or more of its officers, directors or controlling persons, or one of the selling agents of the Company, if any.

 

4.12   Purchases by Group.  Each Purchaser represents, warrants and covenants that he, she or it is not acquiring the Units as part of a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.

 

4.13   No Governmental Review.  Each Purchaser understands that no federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities, nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

4.14   Correctness of Representations.  Each Purchaser represents that the foregoing representations and warranties are true and correct as of the date hereof and, unless a Purchaser otherwise notifies the Company prior to each Closing Date, shall be true and correct as of each Closing Date.

 

4.15   Survival.  The foregoing representations and warranties shall survive the Closing Date until two years after the Closing Date.

 

5.    Conditions to Closing.

   

5.1   Conditions Precedent to the Closing.  The obligations of the Purchasers to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

  

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(a)    The representations and warranties of the Company, as contained in Section 3 hereof, shall be true and correct in all material respects on and as of the Closing.

 

(b)    The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it, on or before the Closing, and shall have obtained all approvals, consents and qualifications necessary to complete the purchase and sale described herein.  All actions necessary for the purpose of authorizing the Company to consummate all of the transactions contemplated hereby, as applicable to the Company, shall have been taken, including, without limitation, the issuance of the Units, the issuance of the Shares and issuance of the Warrant Shares upon exercise of the Warrants.

 

(c)    All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Units pursuant to this Agreement shall be obtained and effective as of the Closing.

 

(d)    All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Purchasers, and the Purchasers (or their counsel) shall have received all such counterpart original or other copies of such documents as reasonably requested.

5.2   Conditions of the Company’s Obligations at the Closing.  The obligations of the Company to each Purchaser under this Agreement are subject to the fulfillment, on or before the Closing in which such Purchaser is participating, of each of the following conditions, unless otherwise waived:

 

(a)    The representations and warranties of each Purchaser contained in Section 4 shall be true and correct in all material respects on and as of the Closing.

 

(b)    All covenants, agreements and conditions contained in this Agreement to be performed by the Purchasers on or prior to the Closing, including payment of the Purchase Price, shall have been performed or complied with in all material respects.

 

(c)    All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities pursuant to this Agreement shall be obtained and effective as of the Closing.

6.    Certain Covenants and Agreements.

   

6.1   Transfer of Securities. Each Purchaser agrees severally (as to himself, herself or itself only) and not jointly that he, she or it shall not sell, assign, pledge, transfer or otherwise dispose of or encumber any of the Shares, the Warrants or the Warrant Shares, except (i) pursuant to an effective registration statement under the Securities Act, or (ii) pursuant to an available exemption from registration under the Securities Act (including sales permitted pursuant to Rule 144) and applicable state securities laws and, if requested by the Company, upon delivery by such Purchaser of either an opinion of counsel of such Purchaser reasonably satisfactory to the Company to the effect that the proposed transfer is exempt from or does not require registration under the Securities Act and applicable state securities laws or a representation letter of such Purchaser reasonably satisfactory to the Company setting forth a factual basis for concluding that such proposed transfer is exempt from or does not require registration under the Securities Act and applicable state securities laws.  Any transfer or purported transfer of the shares of Common Stock in violation of this Section 6.1 shall be void.  The Company shall not register any transfer of the shares of Common Stock in violation of this Section 6.1.  The Company may, and may instruct any transfer agent for the Company, to place such stop transfer orders as may be required on the transfer books of the Company in order to ensure compliance with the provisions of this Section 6.1.

  

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6.2   Registration of Common Stock.  The Company hereby agrees, at its expense and within six months of the Final Closing Date, to use commercially reasonable efforts to file with the Securities and Exchange Commission a registration statement for the purpose of registering for sale to the public the Shares and the Warrant Shares.

 

6.3   Required Approvals.  As promptly as practicable after the date of this Agreement, the Company shall make, or cause to be made, all filings with any governmental or administrative agency or any other Person necessary to consummate the transactions contemplated hereby.

 

6.4   Form 8-K.  The Company shall file a Current Report on Form 8-K describing the transactions consummated under this Agreement not later than the fourth business day after each Closing Date.

 

7.    Definitions.  Terms not otherwise defined in this Agreement are defined below.

 

(a)    “Affiliate” means any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a Person, as such terms are used and construed under Rule 144 (as defined below) and in all cases including, without limitation, any Person that serves as a general partner and/or investment adviser or in a similar capacity of a Person.

 

(b)    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.

 

(c)    “Majority Holders” means the holders of at least the majority of the Shares issued hereunder still outstanding.

 

(d)    “Material Adverse Effect” means any event, occurrence or development that has had, or that could reasonably be expected to have, individually or in the aggregate with other events, occurrences or developments, a material adverse effect on the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or condition (financial or otherwise) of the Company.

  

12

  

(e)    “OTCBB” means Over-the-Counter Bulletin Board.

 

(f)    “Person” (whether or not capitalized) means an individual, entity, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof.

 

(g)    “Rule 144” means Rule 144 promulgated under the Securities Act and any successor or substitute rule, law or provision.

 

(h)    “Securities Act” means the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.

 

(i)    “Transaction Documents” means, collectively, this Agreement and the Warrants.

 

(j)    “Warrant Shares” means the shares of Common Stock issued or issuable upon the exercise of the Warrants.

 

8.    Miscellaneous Provisions.

 

8.1    Amendments, Consents, Waivers, Etc.

 

(a)    This Agreement or any provision hereof may be amended or terminated by the agreement of the Company and the Majority Holders, and the observance of any provision of this Agreement that is for the benefit of the Purchasers may be waived (either generally or in a particular instance, and either retroactively or prospectively), and any consent, approval, or other action to be given or taken by the Purchaser pursuant to this Agreement may be given or taken by the written consent of the Majority Holders; provided that (i) any Person may in writing waive, as to himself, herself or itself only, the benefits of any provision of this Agreement; (ii) unanimous consent of all of the Purchasers shall be required to (1) waive any closing condition to this Agreement; (2) amend this Agreement, and (3) amend this Section 8.1(a)(ii) and (iii).  The Warrants may not be amended without the consent of the majority of the holders of the Warrants then issued hereunder.

 

(b)    No course of dealing between the Company and any Purchaser will operate as a waiver of the Company’s or any Purchaser’s rights under this Agreement.  No waiver of any breach or default hereunder will be valid unless in a writing signed by the waiving party.  No failure or other delay by any Person in exercising any right, power, or privilege hereunder will be or operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

 

  

13

  

 

8.2   Notices.  All notices, requests, payments, instructions or other documents to be given hereunder will be in writing or by written telecommunication, and will be deemed to have been duly given if (i) delivered personally (effective upon delivery), (ii) mailed by certified mail, return receipt requested, postage prepaid (effective five business days after dispatch), (iii) sent by a reputable, established courier service that provides evidence of delivery and guarantees next business day delivery (effective the next business day), or (iv) sent by facsimile followed by confirmation, addressed as follows (or to such other address as the recipient party may have furnished to the sending party for the purpose pursuant to this Section 8.2):

 

(a)    If to the Company:

Live Current Media Inc.

780 Beatty Street, Suite 307

Vancouver, British Columbia V6B 2M1

Telephone:  (604) 453-4870

Fax:  (604) 453-4871

Attention: Chief Executive Officer

(b)    If to any Purchaser, to the address of such Purchaser as set forth on the written records of the Company.

8.3   Counterparts.  This Agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered will be an original, but all of which together will constitute one and the same agreement.  In pleading or proving this Agreement, it will not be necessary to produce or account for more than one such counterpart.  Each party hereto will receive by delivery or facsimile transmission a duplicate original of this Agreement executed by each party, and each party agrees that the delivery of this Agreement by facsimile transmission will be deemed to be an original of this Agreement so transmitted.

 

8.4   Captions.  The captions of Sections or Sub-Sections of this Agreement are for reference only and will not affect the interpretation or construction of this Agreement.

 

8.5   Binding Effect and Benefits.  This Agreement will bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  Except as otherwise provided in this Agreement, the provisions of this Agreement that are for the Purchaser’s benefit will inure to the benefit of all permitted transferees of the Securities, and the applicable provisions of this Agreement that bind the Purchaser will bind all transferees of the Securities.  Nothing in this Agreement is intended to or will confer any rights or remedies on any Person other than the parties hereto, permitted transferees of the Securities, and their respective successors and permitted assigns.

 

8.6   Construction.  The language used in this Agreement is the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

 

8.7   Further Assurances.  From time to time on and after the date hereof, the parties hereto will promptly execute and deliver all such further instruments and assurances, and will promptly take all such further actions, as any of the other parties hereto may reasonably request in order to more effectively effect or confirm the transactions contemplated by the Transaction Documents and to carry out the purposes hereof and thereof.

  

14

  

8.8   Severability.  No invalidity or unenforceability of any section of this Agreement or any portion thereof will affect the validity or enforceability of any other section or the remainder of such section.

 

8.9   Entire Agreement.  This Agreement and the Transaction Documents together with any annexes and exhibits hereto and thereto contain the entire understanding and agreement among the parties, or between or among any of them, and supersede any prior or contemporaneous understandings or agreements between or among any of them, with respect to the subject matter hereof, including any term sheet or letter of intent relating to the transactions contemplated hereby and thereby.  No representations or warranties by the Company are made, or shall be deemed to have been made, at any time or in any manner, whether written or oral, other than such representations and warranties as expressly set forth in this Agreement.

 

8.10   Governing Law.  This Agreement shall be governed by the laws of the state of Nevada, without reference to its choice of law rules.  The courts of Nevada will have exclusive jurisdiction over this Agreement, including its enforcement and any dispute regarding its interpretation and application, and the parties hereby irrevocably submit to the jurisdiction of those courts for those purposes.

 

8.11   Waiver of Certain Damages.  Each party to this Agreement, to the fullest extent permitted by law, irrevocably waives any rights that they may have to incidental, consequential or special (including punitive or multiple) damages or any equitable equivalent thereof or substitute therefor based upon, or arising out of, this Agreement or any course of conduct, course of dealing, statements or actions of any of them relating thereto.

Executed and delivered as of the date first above written.

   

	COMPANY:	LIVE CURRENT MEDIA INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ C. Geoffrey Hampson	 
	 	 	C. Geoffrey Hampson	 
	 	 	Chief Executive Officer	 
	 	 	 	 

   

  

15

  

  

PURCHASER SIGNATURE PAGE

The undersigned Purchaser has read the Unit Purchase Agreement dated as of ____________________, 2010 and acknowledges that execution of this Purchaser Signature Page shall constitute the undersigned’s execution of such agreement.

I hereby subscribe for an aggregate of ____________ Units at $5,000 per Unit and hereby deliver good funds with respect to this subscription for the Units.

I am a resident of the State of ______________________________________________________________.

Please print above the exact name(s) in which the Units are to be held

My address is:  ________________________________________________________________

________________________________________________________________

  

I acknowledge that the offering of the Units is subject to the Federal securities laws of the United States and state securities laws of those states in which the Units are offered, and that, pursuant to the U.S. Federal securities laws and state securities laws, the Units may be purchased by persons who come within the definition of an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act (“Regulation D”).

 

By initialing one of the categories below, I represent and warrant that I come within the category so initialed and have truthfully set forth the factual basis or reason I come within that category.  All information in response to this paragraph will be kept strictly confidential.  I agree to furnish any additional information that the Company deems necessary in order to verify the answers set forth below.

NOTE:  You must either initial that at least ONE category.

 

Individual Purchaser:

(A Subscriber who is an individual may initial either Category I, II, or III)

 

	
Category I

	
_____I am a director or executive officer of the Company.

 

	
Category II

	
_____I am an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with my spouse, presently exceeds $1,000,000.

Explanation.  In calculation of net worth, you may include equity in personal property and real estate, including your principal residence, cash, short term investments, stocks and securities.  Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

  

16

  

   

	
Category III

	
_____I am an individual (not a partnership, corporation, etc.) who had an individual income in excess of $200,000 in 2008 and 2009, or joint income with my spouse in excess of $300,000 in 2008 and 2009, and I have a reasonable expectation of reaching the same income level in 2010.

Entity Purchasers:

(A Purchaser which is a corporation, limited liability company, partnership, trust, or other entity may initial either Category IV, V, VI, VII or VIII)

 

	
Category IV

	
_____The Purchaser is an entity in which all of the equity owners are “Accredited Investors” as defined in Rule 501(a) of Regulation D.  If relying upon this category alone, each equity owner must complete a separate copy of this Agreement.

   

(describe entity)

  

	
Category V

	
_____The Purchaser is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares offered, whose purchase is directed by a “Sophisticated Person” as described in Rule 506(b)(2)(ii) of Regulation D.

	
Category VI

	
_____The Purchaser is an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Units, with total assets in excess of $5,000,000.

    

(describe entity)

	
Category VII

	
_____The Purchaser is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

(describe entity)

Executed this _____ day of ____________, 2010 at ____________________, ________________.

  

17

  

 

SIGNATURES

INDIVIDUAL

____________________________

Signature (Individual)

____________________________

(Print Name)

____________________________

Signature (Individual)

____________________________

(Print Name)

   

Residence Address:

____________________________

 

____________________________

  

Mailing Address:

____________________________

 

____________________________

Tax Identification No.: ___________

Telephone No.: ________________

Facsimile No.: _________________

E-Mail Address:

____________________________

  

18

  

CORPORATION, PARTNERSHIP, TRUST ENTITY OR OTHER

If Units are being subscribed for by an entity, the Certificate of Signatory must also be completed.

 

____________________________

Name of Entity (please print)

 

 

By:_________________________

     (Signature of authorized person)

 

 

____________________________

(Print name of authorized person)

 

 

____________________________

(Print title of authorized person)

____________________________

Type of entity (corporation, partnership, etc.)

Address to which correspondenc should be directed:

____________________________

 

____________________________

 

____________________________

  

Tax Identification No.: ___________

Telephone No.: ________________

Facsimile No.: _________________

                                                                    

  

19

  

 

CERTIFICATE OF SIGNATORY

To be completed if Units are being subscribed for by an entity.

I,__________________________________, am the ___________________________ of ____________________________________________________________(the “Entity”).

I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Unit Purchase Agreement and to purchase and hold the Units.  The Unit Purchase Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have hereto set my hand this ______ day of ____________, 2010.

 

 

   

	 	
____________________________

(Signature)

  

20

  

 

SCHEDULE OF PURCHASERS

  

TO UNIT PURCHASE AGREEMENT

Purchasers of Units

	
Purchaser

	
 

Number of Units

	
 

Number of Shares

	
Number of

Warrant Shares

	
Debt to be Surrendered

or Exchanges

	
Total Purchase

Price ($)

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

 

 

21livecurrent_10q-ex1003.htm

EXHIBIT 10.3

   

WARRANT AGREEMENT

This WARRANT AGREEMENT (this “Agreement”) is dated as of __________________, 2010, between Live Current Media Inc., a Nevada corporation (the “Company”), and ____________________ (the “Investor”).  Collectively, the Company and the Investor are sometimes referred to as a “party” or the “parties”.

 

RECITALS

 

A.    The Company proposes to issue to the Investor a warrant (the “Warrant”) to purchase up to an aggregate of ___________ shares (the “Warrant Shares”) of common stock of the Company, par value $0.001 per share (the “Common Stock”); and

 

B.    The Warrant is being issued by the Company to the Investor in conjunction with the execution of that certain Unit Purchase Agreement of even date herewith between the Company and the Investor;

 

NOW, THEREFORE, in consideration of the foregoing premises, the agreements herein set forth and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.   Grant.  The Investor is hereby granted the right to purchase, at any time from __________, 2010 until 5:00 p.m., Pacific time, on __________, 2012 (the “Warrant Exercise Term”), up to an aggregate of ____________ Warrant Shares at the exercise price (subject to adjustment as provided in Section 7 hereof) of $0.15 per Warrant Share.

 

2.   Warrant Certificates.  The warrant certificate (the “Warrant Certificate”) delivered and to be delivered pursuant to this Agreement shall be in the form set forth as Attachment A attached hereto and made a part hereof, with such appropriate insertions, omissions, substitutions and other variations as required or permitted by this Agreement.

 

3.   Exercise of Warrant.  The Warrant is exercisable at a price of $0.15 per Warrant Share, payable in cash or by check to the order of the Company, or any combination of cash or check, subject to adjustment as provided in Section 7 hereof.  Upon surrender of the Warrant Certificate with the duly executed Form of Election to Purchase in the form set forth on Attachment B attached hereto and made a part hereof, together with payment of the Exercise Price (as hereinafter defined) for the Warrant Shares purchased at the Company’s principal offices, currently located at 780 Beatty Street, Suite 307, Vancouver, British Columbia V6B 2M1, the registered holder of a Warrant Certificate (“Holder” or “Holders”) shall be entitled to receive a certificate or certificates for the Warrant Shares so purchased.  The purchase rights represented by each Warrant Certificate are exercisable at the option of the Holder thereof, in whole or in part (but not as to fractional shares of the Common Stock underlying the Warrants).  In the case of the purchase of less than all the Warrant Shares purchasable under any Warrant Certificate, the Company shall cancel said Warrant Certificate upon the surrender thereof and shall execute and deliver a new Warrant Certificate of like tenor for the balance of the Warrant Shares purchasable thereunder.

 

  

1

  

 

4.   Issuance of Certificates.

 

4.1   Issuance.  Upon the exercise of the Warrant, the issuance of certificates for the Warrant Shares shall be made forthwith (and in any event within 5 business days thereafter) without any charge to the Holder thereof including, without limitation, any tax (other than income taxes) which may be payable in respect of the issuance thereof, and such certificates shall (subject to the provisions of Section 5 hereof) be issued in the name of, or in such names as may be directed by, the Holder thereof; provided however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificates in a name other than that of the Holder and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

4.2   Form of Certificates.  The Warrant Certificates and certificates representing the Warrant Shares shall be executed on behalf of the Company by such officer or officers as are permitted or required to execute such certificates on behalf of the Company by the Company’s by-laws and applicable law.  Warrant Certificates shall be dated the date of execution by the Company upon initial issuance, division, exchange, substitution or transfer.

 

(a)   The Warrant Certificates shall bear a legend substantially similar to the following:

 

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION THEREFROM.  ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE STATE SECURITIES LAWS.

 

THIS CERTIFICATE IS ISSUED SUBJECT TO THE PROVISIONS OF A WARRANT AGREEMENT DATED AS OF _________, 2010, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND ANY TRANSFEREE OF THIS CERTIFICATE OR OF THE SHARES ISSUABLE UPON EXERCISE OF IT SHALL BE BOUND BY THE PROVISIONS OF SAID AGREEMENT, A COPY OF WHICH IS ON FILE WITH, AND AVAILABLE FROM, THE SECRETARY OF THE COMPANY.

 

(b)   Upon exercise of the Warrants, in part or in whole, certificates representing the Warrant Shares issued upon such exercise shall bear a legend substantially similar to the following:

  

2

  

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS.

 

5.   Restriction on Transfer of Warrants.  The Holder of a Warrant Certificate, by his, her or its acceptance thereof, covenants and agrees that the Warrant is being acquired, and any Warrant Shares will be acquired, as an investment and not with a view to the distribution thereof, and that the Warrant and Warrant Shares may not be sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or in part, except pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Act”) or an applicable exemption from the registration requirements thereof.  In connection with the transfer or exercise of the Warrant, the transferee and Holder must agree to execute any documents which may be reasonably required by counsel to the Company to comply with the provisions of the Act and applicable state securities laws.

 

6.   Price.

 

6.1   Initial and Adjusted Exercise Price.  The initial exercise price of each Warrant shall be $0.15 per Warrant Share.  The adjusted exercise price shall be the price which shall result from time to time from any and all adjustments of the initial exercise price in accordance with the provisions of Section 7 hereof.

 

6.2   Exercise Price.  The term “Exercise Price” herein shall mean the initial exercise price or the adjusted exercise price, depending upon the context.

 

7.   Adjustments of Exercise Price and Number of Warrant Shares.  If outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced.  If outstanding shares of Common Stock shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously with the effectiveness of such combination, be proportionately increased.  When any adjustment is required to be made in the Exercise Price, the number of Warrant Shares purchasable upon the exercise of this Warrant shall be changed to the number determined by dividing (i) an amount equal to the number of shares issuable upon the exercise of this Warrant immediately prior to such adjustment, multiplied by the Exercise Price in effect immediately prior to such adjustment, by (ii) the Exercise Price in effect immediately after such adjustment.

 

8.   Exchange and Replacement of Warrant Certificates.

 

8.1   Exchange.  Each Warrant Certificate is exchangeable without expense, upon the surrender hereof by the registered Holder at the principal executive office of the Company, for a new Warrant Certificate of like tenor and date representing in the aggregate the right to purchase the same number of Warrant Shares in such denominations as shall be designated by the Holder thereof at the time of such surrender.

  

3

  

 

8.2   Replacement.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of any Warrant Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of the Warrant, if mutilated, the Company will make and deliver a new Warrant Certificate of like tenor, in lieu thereof.

 

9.   Elimination of Fractional Interests.  The Company shall not be required to issue certificates representing fractions of shares of Common Stock and shall not be required to issue scrip or pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up to the nearest whole number of shares of Common Stock.

 

10.   Reservation and Listing of Securities.  The Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon the exercise of the Warrant, such number of shares of Common Stock as shall be issuable upon the exercise thereof.  The Company covenants and agrees that, upon exercise of the Warrant and payment of the Exercise Price thereof, all shares of Common Stock issuable upon such exercise shall be duly and validly issued, fully paid, non-assessable and not subject to the preemptive rights of any stockholder.  As long as the Warrant shall be outstanding, the Company shall use its best efforts to cause all shares of Common Stock issuable upon the exercise of the Warrant to be listed on or quoted by the exchange or quotation service upon which the Company’s Common Stock is then listed or quoted.

 

11.   Notices to Warrant Holders.  Nothing contained in this Agreement shall be construed as conferring upon the Holder or Holders the right to vote or to consent or to receive notice as a stockholder in respect of any meetings of stockholders for the election of directors or any other matter, or as having any rights whatsoever as a stockholder of the Company.

 

12.   Notices.  All notices, requests, payments, instructions or other documents to be given hereunder will be in writing or by written telecommunication, and will be deemed to have been duly given if (i) delivered personally (effective upon delivery), (ii) mailed by certified mail, return receipt requested, postage prepaid (effective 5 business days after dispatch), (iii) sent by a reputable, established courier service that provides evidence of delivery and guarantees next business day delivery (effective the next business day), or (iv) sent by facsimile followed by confirmation, addressed as follows (or to such other address as the recipient party may have furnished to the sending party for the purpose pursuant to this Section 12):

 

(a)    If to the Company:

Live Current Media Inc.

780 Beatty Street, Suite 307

Vancouver, British Columbia V6B 2M1

Telephone:  (604) 453-4870

Fax:  (604) 453-4871

Attention: Chief Executive Officer

  

4

  

(b)    If to any Investor, to the address of such Investor as set forth on the written records of the Company.

 

13.   Supplements and Amendments.  The Company and the Investor may from time to time supplement or amend this Agreement in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any provisions herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company and the Investor may deem necessary or desirable.

 

14.   Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company and the Holders inure to the benefit of their respective successors and assigns hereunder.

 

15.   Termination.  This Agreement shall terminate upon the expiration of the Warrant Exercise Term.

 

16.   Governing Law.  This Agreement and each Warrant Certificate issued hereunder shall be governed by the laws of Nevada, without reference to its choice of law rules.  The courts of Nevada will have exclusive jurisdiction over this Agreement and each Warrant Certificate, including their enforcement and any dispute regarding its interpretation and application, and the parties hereby irrevocably submit to the jurisdiction of those courts for those purposes.

 

17.   Benefits of This Agreement.  Nothing in this Agreement shall be construed to give to any person or corporation, other than the Company and the Investor and any other registered holder or holders of the Warrant Certificate or the Warrant Shares, any legal or equitable right, remedy or claim under this Agreement; and this Agreement shall be for the sole and exclusive benefit of the Company and the Investor and any other holder or holders of the Warrant Certificate or the Warrant Shares.

 

18.   Preservation of Rights.  The Company will not, by amendment of its articles of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement or the rights represented hereby or thereby, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Holder of the Warrant.

 

19.   Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

  

5

  

IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to be duly executed, as of the day and year first above written.

 

 

	 	LIVE CURRENT MEDIA INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ C. Geoffrey Hampson	 
	 	 	Name: C. Geoffrey Hampson	 
	 	 	Title: President	 
	 	 	 	 

 

  

6

  

 

ATTACHMENT A

 

NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN EXEMPTION THEREFROM.  ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE STATE SECURITIES LAWS.

 

THIS CERTIFICATE IS ISSUED SUBJECT TO THE PROVISIONS OF A WARRANT AGREEMENT DATED AS OF _______________, 2010, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND ANY TRANSFEREE OF THIS CERTIFICATE OR OF THE SHARES ISSUABLE UPON EXERCISE OF IT SHALL BE BOUND BY THE PROVISIONS OF SAID AGREEMENT, A COPY OF WHICH IS ON FILE WITH, AND AVAILABLE FROM, THE SECRETARY OF THE COMPANY.

 

EXERCISABLE ON OR BEFORE

5:00 P.M., PACIFIC TIME, __________, 2012

    

	No. LCM-1	______________ Warrant Shares

   

WARRANT CERTIFICATE

 

This Warrant Certificate certifies that ________________ or registered assigns is the registered holder of the right to purchase, at any time from ______________, 2010 until 5:00 p.m. Pacific time on ____________, 2012 (“Expiration Date”) up to _____________________ (___________) shares (“Warrant Shares”) of fully-paid and nonassessable common stock, par value $0.001 per share (“Common Stock”), of Live Current Media Inc., a Nevada corporation (the “Company”), at the initial exercise price, subject to adjustment in certain events (the “Exercise Price”), of $0.15 per Warrant Share upon surrender of this Warrant Certificate and payment of the Exercise Price at the office of the Company, but subject to the conditions set forth herein and in the Warrant Agreement dated as of ___________, 2010 (“Warrant Agreement”) between the Company and _______________.  Payment of the Exercise Price may be made in cash or check payable to the order of the Company, or any combination of cash or check.

 

Neither this Warrant nor any portion of it may be exercised after 5:00 p.m., Pacific time, on the Expiration Date, at which time the rights evidenced hereby, unless exercised prior thereto, shall thereafter be void.

 

The Warrant Shares evidenced by this Warrant Certificate are duly authorized and will be issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to as a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Company and the Holders (the words “Holders” or “Holder” meaning the registered holders or registered holder) of the Warrant.

  

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The Warrant Agreement provides that upon the occurrence of certain events, the Exercise Price and/or number of Warrant Shares issuable thereupon may, subject to certain conditions, be adjusted.  In such event, the Company will, at the request of the Holder, issue a new Warrant Certificate evidencing the adjustment in the Exercise Price and the number and/or type of securities issuable upon the exercise of the Warrant; provided, however, that the failure of the Company to issue such new Warrant Certificates shall not in any way change, alter, or otherwise impair, the rights of the Holder as set forth in the Warrant Agreement.

 

Upon due presentment for registration of transfer of this Warrant Certificate at an office of the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrant Shares shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided herein and in the Warrant Agreement, without any charge except for any tax or other governmental charge imposed in connection therewith.

 

Upon the exercise of the Warrant for less than all of the Warrant Shares evidenced by this Certificate, the Company shall forthwith issue to the Holder hereof a new Warrant Certificate representing such number of unexercised Warrant Shares.

 

The Company may deem and treat the registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, and of any distribution to the Holder(s) hereof, and for all other purposes.

 

All terms used in this Warrant Certificate which are defined in the Warrant Agreement shall have the meanings assigned to them in the Warrant Agreement.

 

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed.

	 	LIVE CURRENT MEDIA INC.	 
	 	 	 	 
	
Dated:  ___________, 2010

	
By: 

	/s/ C. Geoffrey Hampson	 
	 	 	Name: C. Geoffrey Hampson	 
	 	 	Title: President	 
	 	 	 	 

   

  

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ATTACHMENT B

 

FORM OF ELECTION TO PURCHASE

 

The undersigned registered owner of the attached Warrant Certificate hereby irrevocably elects to exercise the right, represented by such Warrant Certificate, to purchase _______ Warrant Shares and herewith tenders in payment for such Warrant Shares cash or check to the order of Live Current Media Inc. in the amount of $_______ all in accordance with Section 3 of the Warrant Agreement.

 

	
Dated:

	
____________________________________

Name of Registered Owner

 

 

____________________________________

Signature of Registered Owner

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant Certificate.)

 

____________________________________

Street Address

 

____________________________________

City, State, Zip

 

____________________________________

IRS Identification Number/Social Security Number

  

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ATTACHMENT C

 

FORM OF ASSIGNMENT

 

(To be executed by the registered Holder if such Holder desires to transfer the Warrant Certificate.)

 

FOR VALUE RECEIVED, the undersigned registered owner of the attached Warrant Certificate hereby sells, assigns and transfers unto the Assignee named below all of the rights, title and interest therein of the undersigned under the within Warrant, with respect to the number of shares of Common stock set forth below:

 

	
NAME OF ASSIGNEE

	
ADDRESS

	
NUMBER OF SHARES

	  	  	  

   

and does hereby irrevocably constitute and appoint __________________________, Attorney, to transfer the within Warrant on the books of Live Current Media Inc., maintained for the purpose, with full power of substitution in the premises.  The undersigned understand that compliance with the provisions of the Warrant is necessary to effect any assignment or transfer.

	
Dated:

	
____________________________________

Signature of Registered Owner

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant Certificate.)

 

____________________________________

Name of Registered Owner

 

____________________________________

IRS Identification Number/Social Security Number

	  	  

 

 

 

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